Buffalo Wild Wings Inc. on Tuesday posted a 22 percent increase in quarterly profits over a year ago, buoyed by a solid increase in sales, but missed Wall Street estimates as high chicken wing costs continued to eat at the bottom line.
Golden Valley-based Buffalo Wild Wings, known for its wings, beer and sports motif, recorded fourth-quarter earnings of $16.7 million, or 89 cents per share, up from $13.6 million or 74 cents from the same period in 2011.
Stock analysts polled by Thomson Reuters were on average expecting earnings of 96 cents per share.
Buffalo Wild Wings' fourth-quarter revenue hit $303.8 million, up 38 percent from a year earlier and above analysts' estimates of $292.4 million. The boost came from strong sales growth at existing restaurants, as well the addition of 62 new company outlets and incremental revenue from a "14th week" for financial reporting purposes.
Buffalo Wild Wings' annual revenue exceeded $1 billion for the first time last year. "We are very pleased with our results, and we continue to break sales records," CEO Sally Smith told analysts in a conference call.
During 2012, Buffalo Wild Wings had to cope with record high wholesale wing prices — after record lows just a year earlier.
During the fourth quarter, wings cost $2.07 per pound on average, up from $1.42 a year ago. Buffalo Wild Wings has been getting fewer wings per pound as producers breed bigger birds.
"We're not worried at all about [the company's] top line, it's just wing prices — they're killing them," said Mark Smith, a stock analyst at Feltl & Co. who has a "sell" rating on Wild Wings' stock.
