Buffalo Wild Wings 3Q profit drops 5 percent
MINNEAPOLIS (AP) — Buffalo Wild Wings Inc.'s shares fell in after-hours trading Tuesday after the restaurant chain reported a 5 percent decline in its fiscal third-quarter profit, which missed market expectations. The company is dealing with added expenses for expanding its chain and higher costs for chicken wings.
The restaurant operator said that it earned $10.7 million, or 57 cents per share, for the period that ended Sept. 23. That's down from $11.3 million, or 61 cents per share, in the same quarter last year.
Revenue increased nearly 25 percent to $246.9 million from $197.8 million.
That falls short of the 61 cents per share and revenue of $254.2 million that analysts polled by FactSet were expecting.
Shares of the Minneapolis-based company fell $10.91, about 13 percent, to $72.50 in after-hours trading. The company's shares fell 5 cents to close regular trading at $83.41.
Buffalo Wild Wings has been increasing in popularity with consumers, and has rapidly added new restaurants. However, the costs of opening these new sites weighed on its profitability. The company ran 854 restaurants across North America as of the end of the quarter, up nearly 9 percent from a year ago. Buffalo Wild Wings plans to open 24 new company restaurants and 20 franchised restaurants before the end of the year.
It's also coping with higher prices for chicken wings.
Revenue from company-owned stores open at least a year increased 6.2 percent. This is considered a key measure of financial performance as it strips away the impact of recently opened or closed stores. The same measure increased 5.8 percent at franchised restaurants.
Buffalo Wild Wings also benefited from a more than 10 percent gain in franchise royalties and other fees.
The company said that sales are off to a strong start in the fourth quarter thanks to the football season.
Buffalo Wild Wings expects its earnings for the full year will be up 15 percent compared with 2011, and up another 20 percent in 2013 as it adds more locations.
It's planning to add more than 60 company-owned stores and 45 franchised restaurants next year.