Buffalo Wild Wings posted a weak fourth quarter, with its sales and profits falling well below expectations.
The Golden Valley-based restaurant chain on Wednesday said it had net earnings of $25.3 million, or $1.32 per share, for the quarter, up from $20.3 million, or $1.07 per share, in the same period a year ago. But analysts polled by Thomson Reuters on average were expecting profits of $1.48 per share.
Buffalo Wild Wings' sales of $490.2 million also fell short of analysts' estimates of $507 million, though they were up 20 percent over a year ago.
Same-store sales — a key financial gauge — were rather grim during the fourth quarter, up 1.9 percent at company-owned restaurants and only 0.1 percent at franchised outlets. Analysts were expecting increases of 3 percent and 1.6 percent respectively, according to Thomson Reuters.
Buffalo Wild Wings CEO Sally Smith told stock analysts in a conference call that same-store sales fell short of the company's expectations, though they continued to outpace the casual dining industry.
Smith remained optimistic. "We have confidence that Buffalo Wild Wings will gain sales momentum."
However, 2016's first quarter has not started out well. Same-store sales for the first four weeks of 2016 have increased only 0.3 percent at company-owned restaurants and declined 1.5 percent at franchised locations, both well below analysts' forecasts.
A stock analyst on Wednesday's earnings conference call asked Wild Wings executives whether customer traffic has been hurt by price increases, a concern that has been raised before.
Jim Schmidt, Buffalo Wild Wings' chief operating officer, said last year's price increases of 4 percent were on the "higher end" historically for Wild Wings. "We saw a slight dip" after prices increased, but not greater than expected, he said.
Wild Wings' fourth quarter included a $3.3 million charge on asset impairments, including for two company-owned PizzaRev restaurants. Buffalo Wild Wings in 2013 bought a stake in PizzaRev, a small, California-based fast-serve pizza company. Wild Wings, in turn, has been a franchisee of PizzaRev.
Wild Wings' results were released after the stock market closed Wednesday. Shares in after-hours trading were at $144.65, up $1.01.
The stock closed Wednesday down $6.36, or 4.3 percent, on the heels of a norovirus outbreak last weekend at one of its restaurants in suburban Kansas City. The incident, which sickened 10 people, appears to be isolated, but the stock market is jittery about food safety issues in the wake of Chipotle's string of foodborne illnesses.
Mike Hughlett • 612-673-7003
