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Buffalo Wild Wings, Inc. is still struggling to find itself after a tough 2016. This Zacks Rank #5 (Strong Sell) recently guided below the consensus estimate for 2017.
Buffalo Wild Wings operates more than 1,220 restaurants around the world selling Buffalo, New York-style chicken wings. It specializes in 21 different varieties.
The restaurants also operate extensive multi-media systems where customers can watch their favorite sporting events.
Big Miss in the Fourth Quarter of 2016
On Feb 7, Buffalo Wild Wings reported its fourth quarter and full year 2016 results. It missed on the Zacks Consensus Estimate by 29%. Earnings were just $0.87 versus the consensus of $1.23.
Revenue rose just 0.8% to $494.2 million.
Same-store sales followed a pattern that was common throughout 2016 as they fell 4% at company-owned restaurants and 3.9% at franchised restaurants.
For the full year, while revenue jumped 9.6% to $2 billion, same-store sales finished down 2.4% at company-owned and down 2.7% at franchised restaurants.
Guided Under Consensus for 2017
Buffalo Wild Wings guided the full year earnings in the range of $5.60 to $6.00 per share.
That was significantly under the analysts' consensus estimate of $6.53.
As a result, 12 analysts have cut their estimates, pushing the Zacks Consensus Estimate down to $5.75, which is towards the lower end of the company's guidance range.
Analysts also lowered estimates for 2018, with the Zacks Consensus falling to $6.77 from $7.66 in the last month.
Are Shares Cheap?
Buffalo Wild Wings shares have dropped since their 2016 highs and are now down about 20% over the last 2 years.
But even with the shares falling, they still aren't cheap.
The company trades with a forward P/E of 27. For a growth stock, that might not be so bad but with the lower earnings guidance, Buffalo Wild Wings is now expected to grow earnings by only 12% in 2017.
This has left some shareholders to call for action. Marcato Capital Management, which owns about 5.6% of outstanding shares, has called for immediate change among management to get the company growing at a faster pace again.
If you want to avoid all this drama but still want to invest in a restaurant chain, you might want to consider Darden Restaurants, Inc. (DRI - Free Report) , which operates the Olive Garden. It's a Zacks Rank #2 (Buy) stock.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop.
Image: Bigstock
Bear of the Day: Buffalo Wild Wings (BWLD)
Buffalo Wild Wings, Inc. is still struggling to find itself after a tough 2016. This Zacks Rank #5 (Strong Sell) recently guided below the consensus estimate for 2017.
Buffalo Wild Wings operates more than 1,220 restaurants around the world selling Buffalo, New York-style chicken wings. It specializes in 21 different varieties.
The restaurants also operate extensive multi-media systems where customers can watch their favorite sporting events.
Big Miss in the Fourth Quarter of 2016
On Feb 7, Buffalo Wild Wings reported its fourth quarter and full year 2016 results. It missed on the Zacks Consensus Estimate by 29%. Earnings were just $0.87 versus the consensus of $1.23.
Revenue rose just 0.8% to $494.2 million.
Same-store sales followed a pattern that was common throughout 2016 as they fell 4% at company-owned restaurants and 3.9% at franchised restaurants.
For the full year, while revenue jumped 9.6% to $2 billion, same-store sales finished down 2.4% at company-owned and down 2.7% at franchised restaurants.
Guided Under Consensus for 2017
Buffalo Wild Wings guided the full year earnings in the range of $5.60 to $6.00 per share.
That was significantly under the analysts' consensus estimate of $6.53.
As a result, 12 analysts have cut their estimates, pushing the Zacks Consensus Estimate down to $5.75, which is towards the lower end of the company's guidance range.
Analysts also lowered estimates for 2018, with the Zacks Consensus falling to $6.77 from $7.66 in the last month.
Are Shares Cheap?
Buffalo Wild Wings shares have dropped since their 2016 highs and are now down about 20% over the last 2 years.
But even with the shares falling, they still aren't cheap.
The company trades with a forward P/E of 27. For a growth stock, that might not be so bad but with the lower earnings guidance, Buffalo Wild Wings is now expected to grow earnings by only 12% in 2017.
This has left some shareholders to call for action. Marcato Capital Management, which owns about 5.6% of outstanding shares, has called for immediate change among management to get the company growing at a faster pace again.
If you want to avoid all this drama but still want to invest in a restaurant chain, you might want to consider Darden Restaurants, Inc. (DRI - Free Report) , which operates the Olive Garden. It's a Zacks Rank #2 (Buy) stock.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop.
Download this IPO Watch List today for free >>