Sally Smith is deploying a steady hand and 20 years as Buffalo Wild Wings Inc. CEO to guide the 1,200-unit casual-dining chain through a challenging sales environment and pressure from an activist investor.
“This is a pivotal time in Buffalo Wild Wings’ history,” said Smith in a fall earnings call.
The Minneapolis-based company had just reported that same-store sales for the third quarter ended Sept. 25 had decreased 1.8 percent at company-owned restaurants and 1.6 percent at franchised Buffalo Wild Wings units, capping the longest period of sales challenges since the company went public in 2003.
The consecutive quarters of negative sales comparisons led one of Buffalo Wild Wing’s largest shareholders, Marcato Capital Management LP with 5.2 percent of the company’s stock, in December to step up its pressure for the restaurant brand to focus more aggressively on franchising.
Buffalo Wild Wings operates 608 of its 1,203 restaurants. Marcato wants the company to sell most of those locations to become a system that is 90 percent franchised.
But Smith said she was waiting for the recently appointed chief financial officer to analyze the company’s strategic initiatives, including refranchising.
That cool reserve and considered decision-making are hallmarks for Smith, who is the former chairman of the National Restaurant Association.
Before joining Buffalo Wild Wings, she was a CFO at a hearing aid company. She joined the restaurant company when it was at 35 units and worked her way up to chief financial officer.
She was named the 2016 Nation’s Restaurant News Norman Award honoree, which is named for casual-dining pioneer Norman Brinker and honors a restaurant executive who mentors and inspires future leaders. “She’s a force,” said Phil Hickey, a longtime restaurateur and the 2011 Norman Award winner. “She is one of the premier leaders in our industry.”
“I’m passionate about this company,” Smith said at the time. “I’m excited about the opportunities we have ahead of us, as much as we’ve had behind us.”
Under Smith’s tenure, Buffalo Wild Wings has added an average of 51 locations a year for 22 years, and, according to Nation’s Restaurant News Top 100 data, U.S. systemwide sales for the past four years have increased 45 percent.
While same-store sales have been down for three quarters, the company has been looking at take-out and other initiatives, like a delivery test at 90 company-owned locations, to increase transactions.
The company also has a majority investment in Dallas-based R Taco and a minority stake in Los Angeles-based PizzaRev, a fast-casual pizza concept.
And Smith still thinks about the front-line employees.
“There may be a lot of pressure on me from Wall Street, or shareholders, or whatever,” Smith said. “But my job is to make sure that pressure doesn’t get to the server on the floor.”
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