Buffalo Wild Wings Shares Plunge 10% As Q2 Results Miss View

(RTTNews) - Shares of Buffalo Wild Wings, Inc. (BWLD) plunged more than 10 percent in extended trading on Tuesday after the restaurant operator reported results for the second quarter that topped analysts' expectations.

The company also reported a profit for the quarter that surged 44 percent from last year, reflecting strong double-digit revenue growth and improved operating margins amid lower expenses. The company also raised its earnings growth guidance for the full-year 2014.

"We're pleased with our strong results in the second quarter. Same-store sales increased 7.7% at company-owned restaurants and 6.5% at franchised locations. Same-store sales were strong during the Final Four and continued through the NBA and NHL playoffs," President and CEO Sally Smith said in a statement.

The Minneapolis, Minnesota-based operator and franchisor of Buffalo Wild Wings Grill & Bar restaurants reported net income of $23.70 million or $1.25 per share for the second quarter, higher than $16.49 million or $0.88 per share for the year-ago quarter.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $1.20 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter grew 20.0 percent to $365.99 million from $305.01 million in the same quarter last year, and topped seventeen Wall Street analysts' consensus estimate of $359.50 million.

Same-store sales increased 7.7 percent at company-owned restaurants and 6.5 percent at franchised restaurants. The company noted that same-store sales were strong during the Final Four and continued through the NBA and NHL playoffs.

Company-owned restaurant sales grew 20.2 percent to $343.14 million, reflecting same-store sales increase and 41 additional restaurants at the end of the quarter compared to the year ago.

Franchise royalties and fees increased 16.6 percent to $22.85 million, reflecting franchise same-store sales increase and 54 additional franchised restaurants at the end of the quarter compared to the year ago.

Average weekly sales for company-owned restaurants were $59,403, up 8.6 percent from the year-ago quarter. Franchised restaurants averaged $61,845, representing a 6.3 percent increase from last year.

Operating margin for the quarter improved 170 basis points to 9.6 percent as total costs and expenses, as a percentage of total sales, declined 170 basis points from last year.

"Our same-store sales for the first four weeks of the third quarter were 8.2% at company-owned restaurants and 7.4% at franchised locations. Company-owned same-store sales include a benefit of 330 basis points from the World Cup," Smith noted.

Looking ahead to fiscal 2014, citing year-to-date performance, current same-store sales trends, and anticipated food costs and labor expense, Buffalo Wild Wings now anticipates net earnings growth exceed the prior guidance of 25 percent to reach 30 percent. Analysts currently expect earnings of $5.09 per share for the year.

"We're very pleased with our sales momentum in the first seven months of 2014. We are investing for long-term growth and delivering impressive net earnings growth to Buffalo Wild Wings shareholders," Smith stated.

The company currently operates in more than 1,025 Buffalo Wild Wings locations across the U.S., Canada and Mexico.

BWLD closed Tuesday's regular trading session at $167.15, up $2.42 or 1.47% on a volume of 1.64 million shares. However, the stock plunged $17.35 or 10.38% in the after-hours trading.