Buffalo Wild Wings Q4 Profit Tops Vies, But Revenues Miss; Gives Weak Outlook

(RTTNews) - Restaurant operator Buffalo Wild Wings, Inc. (BWLD) reported Tuesday a profit for the quarter that grew 25 percent from last year, reflecting double-digit revenue growth and improved operating margins amid lower expenses.

Earnings per share topped analysts' expectations, while quarterly revenues missed their estimates. The company also provided earnings guidance for the full-year 2013, well below Street view.

The Minneapolis, Minnesota-based operator and franchisor of Buffalo Wild Wings Grill & Bar restaurants reported net income of $20.82 million or $1.10 per share for the fourth quarter, higher than $16.66 million or $0.89 per share for the year-ago quarter.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $1.07 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter grew 12.4 percent to $341.55 million from $303.3 million in the same quarter last year, but missed twenty Wall Street analysts' consensus estimate of $346.88 million by a whisker.

Same-store sales increased 5.2 percent at company-owned restaurants and 3.1 percent at franchised restaurants.

The company noted that same-store sales for the first five weeks of 2014 were 4.8 percent at company-owned restaurants and 2.1 percent at franchised locations.

Company-owned restaurant sales grew 13.1 percent to $319.83 million, reflecting same-store sales increase and 53 additional restaurants at the end of the quarter compared to the year ago.

Franchise royalties and fees edged up 2.7 percent to $21.72 million, reflecting franchise same-store sales increase and 49 additional franchised restaurants at the end of the quarter compared to the year ago.

Average weekly sales for company-owned restaurants were $58,204, up 4.7 percent from the year-ago quarter. Franchised restaurants averaged $61,167, representing a 4.6 percent increase from last year.

Operating margin for the quarter improved 100 basis points to 8.7 percent as total costs and expenses, as a percentage of total sales, declined 100 basis points from last year.

"In 2013 we continued to build the brand for future success by focusing on several key initiatives, including selling chicken wings by portion, our new Stadia restaurant design, continued rollout of our guest experience model, launch of Game Changer beer brewed by Redhook, continued international expansion, and a minority investment in PizzaRev," President and CEO Sally Smith said in a statement.

For fiscal 2013, the company reported net income of $71.55 million or $3.79 per share, higher than $57.28 million or $3.06 per share for the year ago.

Total revenue for the full year grew to $1.27 billion from $1.04 billion in the previous year.

Street was looking for full-year 2013 earnings of $3.76 per share on annual revenues of $1.27 billion.

Looking ahead to fiscal 2014, Buffalo Wild Wings continues to anticipate net earnings growth of 20 percent, implying earnings of $4.55 per share, based on earnings of $3.79 per share reported in 2013. Analysts currently expect earnings of $4.75 per share for the year.

Meanwhile, the company said it expects to open nine company-owned restaurants, 13 franchised restaurants in the first quarter. The company added that its international franchisees in Mexico have already opened two restaurants.

The company currently operates 993 Buffalo Wild Wings locations across 49 states across the U.S., Canada and Mexico.

BWLD closed Tuesday's regular trading session at $140.75, up $4.71 or 3.46% on a volume of 1.02 million shares. The stock gained a further $1.80 or 1.28% in the after-hours trading.