Buffalo Wild Wings Ups Profits, Plans Pizza Chain In Mpls.
Buffalo Wild Wings recently announced that its second-quarter profits climbed 41 percent and that it’s searching for locations in Minneapolis for PizzaRev, a make-your-own pizza chain the company invested in earlier this year.
In March, Golden Valley-based Buffalo Wild Wings invested in the Los Angeles-based chain of pizza restaurants, which bills its offerings as “fast-casual, artisan pizza.” Buffalo Wild Wings acquired a minority stake in the company and has helped it grow throughout Los Angeles.
During a Tuesday conference call, Buffalo Wild Wings CEO Sally Smith said the company plans to have PizzaRev open a Minneapolis location by the first quarter of 2014.
“We are pursuing different sites as part of our agreement,” Smith said. “We have the opportunity to open locations in Minneapolis, partly as a test of the concept and partly because this is our home territory, so it’s a great opportunity for us to take a look at how it functions and the upside potential to it.”
When asked whether Buffalo Wild Wings was considering any acquisitions—of PizzaRev, for example—Smith responded, “We would like it to be franchise-able. We want it to be something small that has passionate founders that want to grow the brand.”
“It needs to work as well in Los Angeles as it does in Minneapolis, as it does in Des Moines, Iowa. So we want it to have the possibility to be a nationwide concept . . . most likely in [the] fast-casual, possibly casual dining sector,” Smith added.
The company also discussed the success of its first in-house craft beer, Game Changer, which it released July 15. Since then, the drink has become the fourth-most popular draft beer at company-owned locations, Smith said. Buffalo Wild Wings teamed with Seattle-based brewer Redhook to develop the new beverage.
“What we like about Game Changer is that it is a premium beer that fits really nicely between domestics and craft and at a nice value for our guests, so they get a craft quality beer at a mid-price,” Smith said. “We think [this] will drive back some of the margin dollars that we have lost in the last couple of years due to price increases that some of the large brewers have taken.”
The company also announced Tuesday that net earnings for its second quarter, which ended June 30, totaled $16.5 million, or $0.88 per share, up from $11.7 million, or $0.62 per share, during the same period in 2012. Earnings per share were $0.09 higher than what analysts polled by Thomson Reuters had expected.
Revenue, meanwhile, totaled $305 million, up 27.8 percent from $238.7 million in the second quarter of 2012. Second-quarter revenue was slightly above analysts’ projections of $304.2 million.
According to the company, the positive sales were due partly to the lower price of traditional chicken wings, which were $1.61 per pound during the second quarter, down 15 percent from last year’s average of $1.90, according to Chief Financial Officer Mary Twinem.
Buffalo Wild Wings opened 10 new company-owned restaurants in North America during the second quarter, compared to four during the same period in 2012.
The company also plans to open locations in the Hartsfield-Jackson airport in Atlanta and in New York City’s Times Square. It hopes to unveil its 1,000th Buffalo Wild Wings restaurant early next year.