Buffalo Wild Wings Inc. posted a 67 percent increase in third-quarter profits, blowing past Wall Street’s expectations with strong sales growth and lower chicken wing costs.
“We’re proud to share these quarterly results as we approach our 10th anniversary as a public company,” Wild Wings CEO Sally Smith told stock analysts during a conference call. The Golden Valley-based chain, known for its wings, beer and sports motif, is still one of the fastest-growing U.S. restaurant companies, closing in on 1,000 outlets.
Its stock closed Tuesday at $129.51, an all-time high and well above its 52-week low of $69.72. Wild Wings earnings were released after the market closed but in after-hours trading its shares were at $143.75, soaring about 11 percent.
Third-quarter net earnings of $17.9 million, or 95 cents per share, topped Wall Street analysts’ expectation of 85 cents per share. Sales of $315.8 million were also comfortably above estimates of $311.5 million, and were up 28 percent over a year ago.
“The quarter was really pretty great,” said Mark Smith, a stock analyst at Feltl & Co. “They had a pretty good beat on the top line and a fantastic beat on the bottom line.” Same-store sales growth also exceeded expectations, Smith said.
Same-store sales rose 4.8 percent over a year ago at company-owned stores and 3.9 percent at franchised locations. Same-store sales, which account for recently opened or closed stores, are a closely watched gauge. They’ve been relatively strong for the first four weeks of the fourth quarter, too.
Meanwhile, chicken wing costs on average were down by about 15 percent during the quarter.
“Wings are still cheap” in the fourth quarter, Smith said. The longer-term outlook should be good, too, as lower corn prices are leading to lower feed costs for poultry, he said.