Buffalo Wild Wings Inc. once again beat expectations with a 71 percent jump in first-quarter profit Monday, then surprised investors even more by raising its outlook for the rest of the year.
After the news, the company’s stock, which fell about 2 percent during regular trading, more than made that up with a 5 percent jump on the after-hours market.
While the company’s sports-themed restaurants have been a hot concept in recent years, its stock is notoriously volatile. Three months ago, when the company beat profit expectations for the last three months of 2013, its stock fell 10 percent the next day over concerns about revenue growth. Almost as quickly, its started climbing again and hit a record high last month.
On Monday, the Golden Valley-based firm said it earned $28.3 million, or $1.49 a share, for the first three months of the year. That beat analysts’ consensus forecast of $1.34 per share. Revenue rose 21 percent to $367.9 million, also above the $363 million expectation of analysts.
The company said its profit was shaped by rising revenue at existing company-owned and franchised restaurants, favorable market prices for chicken and the addition of 46 company-owned locations compared with a year ago. Same-store sales rose 5.7 percent at company-owned restaurants and 4.4 percent at franchised units.
Management also was upbeat about the prospects for the current quarter, saying the NBA and NHL playoffs and the FIFA World Cup in June would help attract customers.
“Based on our first-quarter results, second-quarter trends in same-store sales and anticipated food costs, we believe we will achieve net earnings growth of 25 percent for 2014, an increase from our previous goal for the year [20 percent],” CEO Sally Smith said.
She added, “We are building for long-term earnings growth by investing in Buffalo Wild Wings in the U.S. and Canada, international franchising and emerging brands. These investments will allow us to achieve our vision of being a company of 3,000 restaurants worldwide.”
That goal still lies in the future. Buffalo Wild Wings opened its 1,000th restaurant earlier this year.
In an effort to continue expanding once its namesake U.S. restaurants peak, Buffalo Wild Wings plans to open restaurants in the Middle East this year, and in the U.S. it will open a series of PizzaRev locations that offer fast-serve pizza.
Buffalo Wild Wings already has 14 locations in Canada and three in Mexico. It has signed a franchisee in the Philippines, and is working on a franchise in Mumbai, India. The Middle Eastern expansion could involve as many as 20 Buffalo Wild Wings outlets.