MINNEAPOLIS Citing unit growth and same-store sales improvements, Buffalo Wild Wings reported Monday a 24.2-percent increase in second-quarter net earnings, continuing the 601-unit chain’s anomalous momentum within the casual-dining sector.
Net earnings for the quarter ended June 28 were $7.0 million, or 39 cents per diluted share, compared to $5.6 million, or 31 cents per diluted share, in the same year-earlier quarter, the company said.
Same-store sales rose 2.8 percent at company restaurants and 3.7 percent at franchised locations during the second quarter, and officials noted that upward trend was continuing. During a conference call with analysts, officials of the Minneapolis-based sports bar concept said that for the first four weeks of the current third quarter same-store sales were up 1.2 percent and about 1.8 percent at company and franchised restaurants, respectively.
Buffalo Wild Wings president and chief executive Sally J. Smith said during the call that the chain’s second-quarter performance resulted from, among other things, a focus on “building key sales opportunities, like the ‘night hunger’ daypart, where we provide a gathering spot for friends and have delicious, shareable food available later at night than the majority of our casual-dining competitors.”
She also pointed to continued menu innovation, such as a limited-time offers of chicken tender “slammers” and a “twisted chicken” salad, as well as the return of proven sales builders, such as the chain’s “Margarita Mayhem” promotion.
“We continue on pace to meet each of our 2009 annual goals of 15 percent unit, 25 percent revenue, and 20 to 25 percent net earnings growth,” Smith said in a statement about quarterly results for the chain, which has thus far steered clear of the doldrums that have snagged most of its casual-dining competitors during the past year.
Smith noted also that the chain’s ongoing investments in “enhanced facilities, craveable new products and expanded national media campaigns” would serve it well as it heads into one of its busiest periods – football season.
Buffalo Wild Wings’ second-quarter revenue climbed 32.4 percent to $129.6 million, in a year-over-year comparison, company officials said. That gain was driven in large part by a 34.6-percent hike in corporate restaurant sales fueled by higher same-store sales and the contributions of 46 additional company restaurants in operation at the end of the quarter.
Also a factor in revenue growth, officials said, was a 14.0-percent increase in franchise fees and royalties to $11.9 million tied to higher same-store sales and the contributions of 37 additional franchised locations compared with the 2008 quarter.
Margins have been helped by the chain’s menu-diversification program and the shift among consumers from bone-in wings to the boneless variety, Mary J. Twinem, the company’s chief financial officer, executive vice president and treasurer, told analysts during the conference call.
Traditional wings accounted for 20 percent of sales in the second quarter, down from 22 percent a year ago, she said, adding that the sales-mix share for boneless wings, which had better margins than the bone-in variety, was 19 percent, up from 16 percent the 2008 quarter. Limited-time offers, such as flatbreads, and alcohol-free beverages also provide better margins, Twinem said.
Contact Alan J. Liddle at [email protected]
