We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Buffalo Wild Wings (BWLD) Misses on Q1 Earnings & Revenues
Read MoreHide Full Article
Shares of Buffalo Wild Wings Inc. lost nearly 2% in after-hours trading on Apr 26, after the company reported lower-than-expected first-quarter 2017 results. This bleak performance was mainly due to the increased costs of traditional chicken wings coupled with higher promotional activity as well as labor and operating expenses.
Quarter Highlights
Adjusted earnings of $1.44 per share plunged 16.8% year over year and missed the Zacks Consensus Estimate of $1.68 by 14.3%.
Total revenue increased 5.2% to $534.8 million on the back of higher restaurant sales as well as franchise royalties and fees. However, revenues missed the consensus mark of $536 million by 0.2%.
Performance in Detail
During the quarter, company-owned restaurant sales increased 5.2% year over year to $509.2 million. The upside was driven by the opening of 31 additional Buffalo Wild Wings outlets and marginal comps growth.
Company-owned comps inched up 0.5% comparing favorably with the comps decline of 4% in the previous quarter. In the year-ago quarter, company-owned comps had declined 1.7%.
Franchise royalties and fees increased 5.0% year over year to $25.6 million owing to additional franchised restaurants and marginal comps growth. Comps inched up 0.6% and compared favorably with the last quarter’s decline of 3.9%. The company had registered comps decline of 2.4% in the year-ago quarter.
Buffalo Wild Wings' cost of sales, as a percentage of restaurant sales, increased 170 basis points (bps) to 31.4%. This rise in cost was a result of a 4.1% year-over-year increase in traditional wing pricing coupled with higher promotional activity and a change in sales mix. Additionally, the company’s cost of labor, as a percentage of restaurant sales, increased 80 bps to 31.6%.
Moreover, restaurant operating expenses, as a percentage of restaurant sales, were 15.2%. This reflects an 80 bps increase from the prior-year quarter due to rise in repairs and maintenance costs, third-party delivery commissions and the timing of sports programming expenses.
Buffalo Wild Wings, Inc. Price, Consensus and EPS Surprise
Menu price increases and adjustments made in the last 12 months are expected to add 0.7% to the pricing in the second quarter. The company plans to open three company-owned Buffalo Wild Wings restaurants in the quarter, along with five more franchised locations.
Meanwhile, cost for traditional chicken wings for the first two months of first quarter remains elevated and is at an average of $2.02 per pound. The average cost in second-quarter 2016 was $1.94 per pound.
2017 View
For 2017, the company anticipates earnings per share to be in the range of $5.45 to $5.90 (lower than the previous expectation of $5.60 to $6.00). The Zacks Consensus Estimate for 2017 earnings is currently pegged at $5.74. Meanwhile, comps are projected to grow approximately 1% (previously expected to grow in the band of 1–2%).
Furthermore, Buffalo Wild Wings continues to foresee opening of approximately 15 company-owned Buffalo Wild Wings restaurants in the U.S. along with 15 franchised Buffalo Wild Wings locations in the same region. In addition, it aims to launch 20 franchised Buffalo Wild Wing locations internationally and two company-owned as well as 12 to 15 franchised R Taco restaurants.
Further, the company expects traditional chicken wing prices to rise in the range of 8% to 10% (previous range 3.5% to 4.5%). Also, it continues to expect to incur capital expenditure of approximately $100 million during the year.
Zacks Rank & Stocks to Consider
Buffalo Wild Wings carries a Zacks Rank #3 (Hold). Better-ranked stocks in the restaurants space include:
Papa Murphy’s Holdings, Inc. (FRSH - Free Report) is another Zacks Rank #1 company. It has seen current year and next year earnings estimates rise 50% and 500%, respectively, in the past two months.
Darden Restaurants, Inc.’s (DRI - Free Report) earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 3.35%. It currently holds a Zacks Rank #2 (Buy).
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Buffalo Wild Wings (BWLD) Misses on Q1 Earnings & Revenues
Shares of Buffalo Wild Wings Inc. lost nearly 2% in after-hours trading on Apr 26, after the company reported lower-than-expected first-quarter 2017 results. This bleak performance was mainly due to the increased costs of traditional chicken wings coupled with higher promotional activity as well as labor and operating expenses.
Quarter Highlights
Adjusted earnings of $1.44 per share plunged 16.8% year over year and missed the Zacks Consensus Estimate of $1.68 by 14.3%.
Total revenue increased 5.2% to $534.8 million on the back of higher restaurant sales as well as franchise royalties and fees. However, revenues missed the consensus mark of $536 million by 0.2%.
Performance in Detail
During the quarter, company-owned restaurant sales increased 5.2% year over year to $509.2 million. The upside was driven by the opening of 31 additional Buffalo Wild Wings outlets and marginal comps growth.
Company-owned comps inched up 0.5% comparing favorably with the comps decline of 4% in the previous quarter. In the year-ago quarter, company-owned comps had declined 1.7%.
Franchise royalties and fees increased 5.0% year over year to $25.6 million owing to additional franchised restaurants and marginal comps growth. Comps inched up 0.6% and compared favorably with the last quarter’s decline of 3.9%. The company had registered comps decline of 2.4% in the year-ago quarter.
Buffalo Wild Wings' cost of sales, as a percentage of restaurant sales, increased 170 basis points (bps) to 31.4%. This rise in cost was a result of a 4.1% year-over-year increase in traditional wing pricing coupled with higher promotional activity and a change in sales mix. Additionally, the company’s cost of labor, as a percentage of restaurant sales, increased 80 bps to 31.6%.
Moreover, restaurant operating expenses, as a percentage of restaurant sales, were 15.2%. This reflects an 80 bps increase from the prior-year quarter due to rise in repairs and maintenance costs, third-party delivery commissions and the timing of sports programming expenses.
Buffalo Wild Wings, Inc. Price, Consensus and EPS Surprise
Buffalo Wild Wings, Inc. Price, Consensus and EPS Surprise | Buffalo Wild Wings, Inc. Quote
A Peek into the Second Quarter of 2017
Menu price increases and adjustments made in the last 12 months are expected to add 0.7% to the pricing in the second quarter. The company plans to open three company-owned Buffalo Wild Wings restaurants in the quarter, along with five more franchised locations.
Meanwhile, cost for traditional chicken wings for the first two months of first quarter remains elevated and is at an average of $2.02 per pound. The average cost in second-quarter 2016 was $1.94 per pound.
2017 View
For 2017, the company anticipates earnings per share to be in the range of $5.45 to $5.90 (lower than the previous expectation of $5.60 to $6.00). The Zacks Consensus Estimate for 2017 earnings is currently pegged at $5.74. Meanwhile, comps are projected to grow approximately 1% (previously expected to grow in the band of 1–2%).
Furthermore, Buffalo Wild Wings continues to foresee opening of approximately 15 company-owned Buffalo Wild Wings restaurants in the U.S. along with 15 franchised Buffalo Wild Wings locations in the same region. In addition, it aims to launch 20 franchised Buffalo Wild Wing locations internationally and two company-owned as well as 12 to 15 franchised R Taco restaurants.
Further, the company expects traditional chicken wing prices to rise in the range of 8% to 10% (previous range 3.5% to 4.5%). Also, it continues to expect to incur capital expenditure of approximately $100 million during the year.
Zacks Rank & Stocks to Consider
Buffalo Wild Wings carries a Zacks Rank #3 (Hold). Better-ranked stocks in the restaurants space include:
YUM! China Holdings, Inc. (YUMC - Free Report) has seen current quarter and current year earnings estimates rise 4.5% and 5.2%, respectively, over the last 60 days. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Papa Murphy’s Holdings, Inc. (FRSH - Free Report) is another Zacks Rank #1 company. It has seen current year and next year earnings estimates rise 50% and 500%, respectively, in the past two months.
Darden Restaurants, Inc.’s (DRI - Free Report) earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 3.35%. It currently holds a Zacks Rank #2 (Buy).
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>