Company Update (NASDAQ:BWLD): Buffalo Wild Wings Announces 2Q Earnings Per Share of $1.12

Buffalo Wild Wings (NASDAQ:BWLD) announced financial results for the second quarter ended June 28, 2015. Highlights for the second quarter versus the same period a year ago were:

  • Total revenue increased 16.5% to $426.4 million
  • Company-owned restaurant sales increased 17.1% to $401.9 million
  • Same-store sales increased 4.2% at company-owned restaurants and 2.5% at franchised restaurants
  • Net earnings decreased 9.3% to $21.5 million from $23.7 million, and earnings per diluted share decreased 9.9% to $1.12 from $1.25

Sally Smith, President and Chief Executive Officer, commented, “Solid sales performance in the second quarter was offset by a challenging cost environment.  Our second quarter same-store sales were 4.2% at company-owned restaurants and 2.5% at franchised locations.  This spring we created World of Sports, which highlighted the playoffs, women’s World Cup, and unique sports from around the globe to help drive sales over our strong same-store sales last year. We also launched B-Dubs® Fast Break, a system-wide lunch program, and supported the campaign with national and local advertising.”

Ms. Smith continued, “We earned $1.12 per diluted share in the second quarter, a decline from 2014 primarily from increased food and labor costs.  The price per pound for traditional chicken wings was 26% higher than the prior year.  Labor as a percentage of sales increased due to higher wage rates and benefits costs and the addition of Guest Experience Captains at all company-owned restaurants that was completed in fourth quarter last year.”

Total revenue increased 16.5% to $426.4 million in the second quarter compared to $366.0 million in the second quarter of 2014. Company-owned restaurant sales for the quarter increased 17.1% over the same period in 2014, to $401.9 million, driven by a same-store sales increase at company-owned Buffalo Wild Wings restaurants of 4.2% and 64 additional Buffalo Wild Wings restaurants at the end of the second quarter of 2015. Franchise royalties and fees increased 7.3% to $24.5 million for the quarter versus $22.9 million in the second quarter of 2014. This increase is attributed to a same-store sales increase at franchised Buffalo Wild Wings locations of 2.5% and 8 additional franchised Buffalo Wild Wings restaurants at the end of the period versus a year ago.

Average weekly sales for company-owned Buffalo Wild Wings restaurants were $61,960 for the second quarter of 2015 compared to $59,403 for the same quarter last year, a 4.3% increase. FranchisedBuffalo Wild Wings restaurants in the United States averaged $63,904 for the period versus $61,845 in the second quarter a year ago, a 3.3% increase.

For the second quarter, net earnings decreased 9.3% to $21.5 million versus $23.7 million in the second quarter of 2014. Earnings per diluted share were $1.12, as compared to second quarter 2014 earnings per diluted share of $1.25.

2015 Outlook

Ms. Smith remarked, “Same-store sales increased 4.8% at company-owned restaurants and 2.0% at franchised locations for the first four weeks of the third quarter of 2015 compared to 8.2% and 7.4%, respectively, for the same period last year, which included the men’s World Cup finals. We’re excited for the start of the football season and our restaurant teams are getting ready to host fantasy football draft parties. Buffalo Wild Wings remains the place to watch all the gridiron action and we will air new advertising focusing on the great football environment our restaurants offer.”

Ms. Smith continued, “In July, we finalized a purchase agreement to acquire 41 franchised Buffalo Wild Wings locations in Texas, New Mexico, and Hawaii and we anticipate the transaction closing in August.  This acquisition is expected to decrease net earnings in 2015 due to the timing of the closing, increased depreciation and amortization of reacquired franchise rights, and $5 million in transition costs.”

Ms. Smith concluded, “Investments in Buffalo Wild Wings, including the Guest Experience Business Model and Stadia restaurant design, further strengthen our brand. Same-store sales at Buffalo Wild Wings are strong and we have long-term opportunities that will continue to drive restaurant sales and net earnings growth. As a result of the near-term expenses from the integration of the franchise acquisition, we are revising our net earnings growth goal for 2015 to 13%.” (Original Source)

Following earnings, shares of Buffalo Wild Wings are up 7.36% to $180.98 in after-hours trading. BWLD has a 1-year high of $195.83 and a 1-year low of $122.15. The stock’s 50-day moving average is $162.55 and its 200-day moving average is $173.20.

On the ratings front, Buffalo Wild Wings has been the subject of a number of recent research reports. In a report issued on July 14, Raymond James analyst Brian Vaccaro upgraded BWLD to Buy, with a price target of $195, which represents a potential upside of 14.9% from where the stock is currently trading. Separately, on July 1, Goldman Sachs’ Karen Holthouse initiated coverage with a Buy rating on the stock and has a price target of $195.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Brian Vaccaro and Karen Holthouse have a total average return of 2.7% and 13.3% respectively. Vaccaro has a success rate of 68.8% and is ranked #1899 out of 3717 analysts, while Holthouse has a success rate of 75.0% and is ranked #988.

Overall, one research analyst has rated the stock with a Sell rating, 2 research analysts have assigned a Hold rating and 6 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $194.00 which is 14.4% above where the stock opened today.

Buffalo Wild Wings Inc and itssubsidiaries operatesrestaurants as well as selling Buffalo Wild Wings and Rusty Taco restaurant franchises. The Company offersoffers dining and bar areas that provide distinct seating choices for sports fans and families.

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