Buffalo Wild Wings Q3 Profit Up 22%, Results Beat Estimates

(RTTNews) - Shares of Buffalo Wild Wings, Inc. (BWLD) gained more than 6 percent in extended trades Monday after the restaurant operator reported financial results for the third quarter that beat analysts' expectations.

The company reported a 22 percent increase in profit for the third quarter from last year, reflecting strong double-digit revenue growth, improved same-store sales and lower food costs.

Sally Smith, President and Chief Executive Officer of Buffalo Wild Wings, said, "Our strong sales growth, lower food costs, and a lower effective tax rate more than offset the increased labor cost of the Guest Experience Captains, producing net earnings growth of 21.7% and earnings per diluted share of $1.14 in the third quarter."

The Minneapolis, Minnesota-based operator and franchisor of Buffalo Wild Wings Grill & Bar restaurants reported net income for the third quarter of $21.75 million or $1.14 per share, up from $17.87 million or $0.95 per share in 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 18.3 percent to $373.46 million from $315.80 million in the same quarter last year. Analysts' had a consensus revenue estimate of $373.26 million.

Same-store sales increased 6.0 percent at company-owned restaurants and 5.7 percent at franchised restaurants.

Company-owned restaurant sales grew 18.5 percent to $350.5 million, reflecting same-store sales increase at company-owned Buffalo Wild Wings restaurants of 6.0 percent and 44 additional restaurants at the end of the quarter compared to the year ago.

Franchise royalties and fees increased 14.1 percent to $22.9 million, reflecting franchise same-store sales increase of 5.7 percent and 47 additional franchised restaurants at the end of the quarter compared to the year ago.

Average weekly sales for company-owned restaurants were $59,643, up 7.3 percent from the year-ago quarter. Franchised restaurants in the U.S. averaged $61,586, representing a 4.5 percent increase from last year.

"Same-store sales increased about 5.4% at company-owned restaurants and 5.1% at franchised locations for the first four weeks of the fourth quarter compared to 5.3% and 3.0%, respectively, for the same period last year," Smith noted.

Looking ahead to fiscal 2014, Buffalo Wild Wings now forecasts net earnings growth to exceed 28 percent, compared to the prior outlook for growth to exceed 25 percent to reach 30 percent. Analysts currently expect earnings of $4.99 per share for the year.

Smith said, "Current costs for traditional chicken wings of $1.98 per pound are 30% higher than our third quarter average cost. Given this trend and known raises in certain minimum wage rates, we are increasing menu prices an average of 3.0% at the end of November."

Buffalo Wild Wings said it continues to expand toward its goal of 1,700 restaurants in the U.S. and Canada. In 2015, the company plans to open about 50 company-owned Buffalo Wild Wings restaurants and expect its franchisees in the U.S. to add 40 franchised locations.

BWLD closed Monday's regular trading session at $133.82, down $1.58 or 1.17 percent on a volume of 1.55 million shares. However, the stock gained $8.48 or 6.34 percent in the after-hours trading to $142.30.