The World Cup and an overall busy sports season boosted Buffalo Wild Wings’ second-quarter results, which once again beat analysts’ expectations.
“Same-store sales were strong during the Final Four and continued through the NBA and NHL playoffs,” said Sally Smith, the company’s CEO. “We love it when playoff series have more games and extend into overtime.”
The World Cup provided the restaurant chain with an opportunity to showcase its brand before a growing U.S. soccer fan base, Smith said. Sales during the World Cup lifted same-store sales in the quarter, she said.
While the Golden-Valley based firm said it now expects to exceed its earnings forecast of 25 percent year-over-year growth, its notoriously volatile stock dropped 10.3 percent in after-hours trading Tuesday, even though second-quarter sales and earnings came in above estimates.
Analysts raised concerns about softening growth in the second half of the year as the company expects to pay more for labor costs and for chicken.
Company executives told analysts that expenses will jump in the third quarter as the company rolls out having “guest experience captains” (hosts) at more restaurants. Execs also said the company will be affected by minimum-wage increases going into effect in states including Minnesota and California.
The company also will continue to roll out tabletop tablets to more locations. And in the Twin Cities area, it will begin testing a service that allows customers to order food and drinks from those tablets. In September, it will launch a gaming platform accessible from those tablets as well as on the Web and through a smartphone app.
Buffalo Wild Wings has been one of the restaurant industry’s hottest concepts in recent years. It opened its 1,000th restaurant this year and has a long-term goal of 3,000 worldwide.
It is looking to expand through franchises abroad, including locations in the Middle East that won’t sell beer. It is also an investor in a fast-casual pizza concept called PizzaRev, which will open its second location in the Twin Cities area in the third quarter.
For the second quarter, profits rose 44 percent to $23.7 million, or $1.25 a share. Analysts had been expecting $1.20 a share. And revenue in the quarter jumped 20 percent to $366 million, up from $305 million. Analysts had forecast $360 million.
Buffalo Wild Wings had 95 more restaurants at the end of the second quarter than it did in the same quarter a year ago.
In the second quarter, same-store sales at company-owned stores rose 7.7 percent, while those at franchised locations grew more slowly at 6.5 percent.
Looking ahead, Smith noted that the upcoming football season is a busy time for the chain. She said the company will roll out more promotions related to fantasy draft parties as well as a “beer-mosa,” a twist on the mimosa.