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BWLD shares drop 4% as sales fail to take wing
Buffalo Wild Wings earnings report gets cools reception.
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Profits were up 50 percent and yet third-quarter sales still missed expectations at Buffalo Wild Wings, the company said Tuesday, unleashing a sell-off that pushed the stock down 4 percent in after-hours markets.
Earnings of $6.9 million, or 38 cents a diluted share, were up 50.4 percent from the same period one year ago. Sales climbed 25 percent to $132.7 million. Analysts polled by Thomson First Call expected earnings of 38 cents per share on revenue of $136.5 million.
Even more worrying for the company may be the price of chicken, which has soared 43 percent in the past year.
Chicken prices averaged $1.67 a pound in the third quarter this year, up from $1.17 last year, the company reported. And company CFO Mary Twinem told analysts on Tuesday's earnings call that chicken prices have climbed even higher, averaging $1.77 a pound so far in the fourth quarter.
Selling more drinks, sandwiches and desserts to offset the blow to the company's bottom line, Buffalo Wild Wings has mitigated some of that rise, said one analyst.
"The wings become less and less of their food costs as they evolve and grow the menu," said Nicole Miller Regan, an analyst at Piper Jaffray in Minneapolis.
Same-store sales for company owned restaurants grew 0.8 percent in the third quarter; franchise stores saw same-store sales growth of 1.9 percent. Five company stores and 17 franchise outlets opened in the quarter, pushing total locations to 220 and 400, respectively.
Despite the disappointing revenue report, CEO Sally Smith said her goal remains 15 percent unit growth, 25 percent revenue growth and 20 to 25 percent earnings growth. The company's fourth quarter typically comes in stronger than the summer months, with football games drawing more customers into the sports-theme bar and restaurant.
Matt McKinney • 612-673-7329
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