MINNEAPOLIS Bucking nearly every trend in the restaurant sector, Buffalo Wild Wings Inc. reported late Tuesday increased second quarter same-store sales and improved margins that led to a profit jump of 46 percent.
For the quarter ended June 29, the company earned $5.6 million, or 31 cents per share, compared with year-ago earnings of $3.8 million, or 22 cents per share.
Latest-quarter total revenue rose 28.8 percent to $97.9 million, and reflected 24 more restaurants than the same time last year and quarterly same-store sales increases of 8.3 percent at corporate locations and 4.5 percent at franchised restaurants.
Securities analyst Barry Stouffer at BB&T Capital Markets said Buffalo Wild Wings also benefited in the latest quarter from lower year-to-year chicken wing prices. He said the company’s cost for fresh chicken wings was $1.17 per pound, compared with $1.25 per pound last year. Buffalo Wild Wings had said in March it would not contract its chicken wing prices because the offered fixed prices were much higher than market prices. Stouffer said the move worked in the second quarter, but that the outlook for prices for the remainder of this year and next is “highly uncertain.”
The one-two punch of higher commodity costs and slowed sales have battered many restaurant chains so far this year, and only a handful of brands, including Buffalo Wild Wings, have been able to report positive trends and profit growth.
Sally Smith, president and chief executive of the Minneapolis-based company, said she was confident the 521-unit chain would achieve its growth goals this year, which include 15-percent unit expansion, 20-percent revenue growth and 25-percent net earnings growth. The company does not provide per-share earnings guidance.
July same-store sales have increased 6 percent at corporate locations and 2 percent at franchised locations, compared with last year, the company reported.
For the remainder of the year, Smith forecast positive results, mainly driven by the start of football season this fall, a redesigned menu introduced this week and the expected completion of HDTV and remodeling projects. Buffalo Wild Wings also cited new media and local marketing introductions and improved training for employees for its positive results.
Smith also said the purchase of nine Las Vegas franchised locations, which was announced last May and valued at about $26 million, is expected to close in late September.