Buffalo Wild Wings’ Profits Leap But Stock Falls
Buffalo Wild Wings, Inc., reported a huge jump in profits for its second quarter—which was packed with major sporting events—but its stock fell more than 11 percent, due partly to a lower-than-expected 2014 forecast.
The Golden Valley-based restaurant chain announced Tuesday that net earnings for the second quarter, which ended June 29, totaled $23.7 million, or $1.25 per share, up 44 percent from $16.5 million, or $0.88 per share, during the same period in 2013. Earnings per share were $0.05 higher than what analysts polled by Thomson Reuters had expected.
Revenue, meanwhile, totaled $366 million, up 20 percent from $305 million in the second quarter of 2013. Second-quarter revenue was above analysts’ projections of $360 million.
President and CEO Sally Smith said the company’s same-store sales increased by 7.7 percent and were especially strong during the Final Four tournament and through the NBA and NHL playoffs.
Smith also said the World Cup allowed the company to capture sales from the growing U.S. soccer audience and that sales during the contest were “robust.” Smith added that a decrease in the price of chicken also helped boost sales.
Shares of Buffalo Wild Wings’ stock were trading down about 11.7 percent at $110 per share during late Wednesday morning.
According to Smith, the company’s earnings would grow by 25 percent and “could reach” 30 percent by the end of 2014. However, analysts reportedly expected growth closer to 35 percent for the year. Additionally, analysts said an increase in labor costs and the price of chicken may hurt the company later in the year—input that may have caused the stock to tumble.
Buffalo Wild Wings currently operates more than 1,025 locations in the United States, Canada, and Mexico. It also has plans to expand into the Middle East, Puerto Rico, and the Philippines.
Buffalo Wild Wings is among Minnesota’s 30 largest public companies based on revenue, which totaled $1.27 billion in 2013.