Buffalo Wild Wings Shares Soar 11% As Q3 Results Top View, Boosts 2013 Outlook

(RTTNews) - Shares of Buffalo Wild Wings, Inc. (BWLD) soared more than 11 percent in extended trading on Tuesday after the restaurant operator reported results for the third quarter that topped analysts' expectations.

The company also reported a profit for the quarter that surged 67 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 2013.

"Revenue increased 27.9%, which helped fuel impressive net earnings growth. We increased the number of company-owned restaurants by 21% with continued new unit growth and franchise acquisitions compared to third quarter last year, and same-store sales increased 4.8% at company-owned restaurants and 3.9% at franchised locations," President and CEO Sally Smith said in a statement.

Smith added that the cost per pound for traditional chicken wings was lower than last year and cost of sales percentage was 30.0 percent, the lowest percentage since fourth quarter of 2011.

The Minneapolis, Minnesota-based operator and franchisor of Buffalo Wild Wings Grill & Bar restaurants reported net income of $17.87 million or $0.95 per share for the third quarter, higher than $10.71 million or $0.57 per share for the year-ago quarter.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $0.85 per share for the third quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter grew 27.9 percent to $315.80 million from $246.86 million in the same quarter last year, and topped twenty Wall Street analysts' consensus estimate of $311.60 million by a whisker.

Same-store sales increased 4.8 percent at company-owned restaurants and 3.9 percent at franchised restaurants.

Company-owned restaurant sales grew 29.5 percent to $295.69 million, reflecting same-store sales increase and 72 additional restaurants at the end of the quarter compared to the year ago.

Franchise royalties and fees increased 9.0 percent to $20.11 million, reflecting franchise same-store sales increase and 23 additional franchised restaurants at the end of the quarter compared to the year ago.

Average weekly sales for company-owned restaurants were $55,592, up 5.8 percent from the year-ago quarter. Franchised restaurants averaged $58,926, representing a 6.0 percent increase from last year.

Operating margin for the quarter improved 200 basis points to 8.0 percent as total costs and expenses, as a percentage of total sales, declined 200 basis points from last year.

"With the excitement of football season, we are focused on driving sales. Same-store sales are about 5.3% at company-owned restaurants and 3.0% at franchised locations for the first four weeks of the fourth quarter compared to 3.8% and 5.6%, respectively, for the same period last year," Smith noted.

Looking ahead to fiscal 2013, Buffalo Wild Wings now anticipates net earnings growth of 20 percent, equating to 28 percent on a 52-week basis. Analysts currently expect earnings of $3.64 per share for the year.

Previously, the company projected a goal to achieve 17 percent net earnings growth for 2013, equating to 25 percent on a 52-week basis.

The company expects to open 22 new company-owned and 22 new franchised restaurants in the fourth quarter as well as 45 new company-owned and 40 new franchised restaurants in the U.S. and Canada. It also projects the opening of at least 10 restaurants across the globe by its international franchisees.

The company plans to hit the milestone of 1,000 Buffalo Wild Wings restaurants in the first quarter of 2014.

"As we look beyond 2014, we will continue to build Buffalo Wild Wings into an even stronger brand. We are committed to opening 1,700 Buffalo Wild Wings locations in the United States and Canada, and believe that we will achieve this goal within the next ten years," Smith stated.

The company currently operates in 930 Buffalo Wild Wings locations across 49 states across the U.S., as well as in Canada.

BWLD closed Tuesday's regular trading session at $129.51, up $3.15 or 2.49% on a volume of 1.03 million shares. The stock soared a further $14.49 or 11.19% in the after-hours trading.