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On Aug 29, we issued an updated research report on casual dining restaurant chain, Buffalo Wild Wings Inc. .
The company posted mixed second-quarter results on Jul 26. Though the bottom line surpassed the Zacks Consensus Estimate, the top line lagged the same.
Prospects
Buffalo Wild Wings is famous for its bar concept as well as the ‘dine and watch game’ facility. It offers a full bar and numerous television sets per outlet.
Notably, Buffalo Wild Wings remains better positioned than many of its peers on the back of menu innovation, remodeling its existing locations, investing in Guest Experience along with better food presentation and operational efficiency. The company also stresses on advertising initiatives, installing point-of-sales programs, and improving supply-chain management.
Moreover, marketing and activation rights for major sporting events along with the company’s association with popular beverage chains have been expanding its brand portfolio.
Interestingly, apart from sales initiatives, the acquisition of franchised restaurants is also contributing to revenues. Unlike most of its peers, Buffalo Wild Wings remains focused on company-owned restaurants that allows it to have full control over operations and also keep profits.
Concerns
However, Buffalo Wild Wings’ earnings and revenues have missed the Zacks Consensus Estimate in five of the past six quarters owing to higher costs and soft comps, respectively. Moreover, the company’s comps have declined in the past two quarters due to lower traffic trends.
Though in the long-term, the company’s strong market standing along with various innovative initiatives should aid in reviving comps growth, it remains a concern for the near term.
Meanwhile, fluctuation in chicken prices – a key ingredient for the company – might hurt the company’s profitability. Also, the costs related to the company’s sales-boosting initiatives and higher labor costs will to continue to dent profits in the near term.
Zacks Rank & Stocks to Consider
Buffalo Wild Wings currently has a Zacks Rank #3 (Hold). Better-ranked stocks in this sector include Papa John's International Inc. (PZZA - Free Report) , Del Taco Restaurants, Inc. and Restaurant Brands International Inc. (QSR - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy).
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Buffalo Wild Wings Eyes Long-Term Growth Despite Risks
On Aug 29, we issued an updated research report on casual dining restaurant chain, Buffalo Wild Wings Inc. .
The company posted mixed second-quarter results on Jul 26. Though the bottom line surpassed the Zacks Consensus Estimate, the top line lagged the same.
Prospects
Buffalo Wild Wings is famous for its bar concept as well as the ‘dine and watch game’ facility. It offers a full bar and numerous television sets per outlet.
Notably, Buffalo Wild Wings remains better positioned than many of its peers on the back of menu innovation, remodeling its existing locations, investing in Guest Experience along with better food presentation and operational efficiency. The company also stresses on advertising initiatives, installing point-of-sales programs, and improving supply-chain management.
Moreover, marketing and activation rights for major sporting events along with the company’s association with popular beverage chains have been expanding its brand portfolio.
Interestingly, apart from sales initiatives, the acquisition of franchised restaurants is also contributing to revenues. Unlike most of its peers, Buffalo Wild Wings remains focused on company-owned restaurants that allows it to have full control over operations and also keep profits.
Concerns
However, Buffalo Wild Wings’ earnings and revenues have missed the Zacks Consensus Estimate in five of the past six quarters owing to higher costs and soft comps, respectively. Moreover, the company’s comps have declined in the past two quarters due to lower traffic trends.
Though in the long-term, the company’s strong market standing along with various innovative initiatives should aid in reviving comps growth, it remains a concern for the near term.
Meanwhile, fluctuation in chicken prices – a key ingredient for the company – might hurt the company’s profitability. Also, the costs related to the company’s sales-boosting initiatives and higher labor costs will to continue to dent profits in the near term.
Zacks Rank & Stocks to Consider
Buffalo Wild Wings currently has a Zacks Rank #3 (Hold). Better-ranked stocks in this sector include Papa John's International Inc. (PZZA - Free Report) , Del Taco Restaurants, Inc. and Restaurant Brands International Inc. (QSR - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>