Buffalo Wild Wings Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of wing-slingin' restaurant Buffalo Wild Wings (Nasdaq: BWLD  ) were wild with excitement after fourth-quarter earnings were announced, jumping as much as 12% in intraday trading.

So what: Nothing seems to be able to stop this spicy Motley Fool Hidden Gems pick. For the fourth quarter, B-Wild reported $0.55 in earnings per share, easily above the $0.52 that Wall Street was expecting. Net earnings growth of 25% for the full year topped the company's own target. Interestingly, while other fast-food joints like McDonald's (NYSE: MCD  ) have been battling commodity costs, the cost of wings actually fell for B-Wild, which boosted the company's profitability.

Now what: If there was a smudge on the strong fourth-quarter results, it was that same-store sales declined 0.3% at company-owned restaurants and 1.1% at franchised locations. However, it appears that's reversing in the first quarter of this year as company-owned locations are thus far up 3.8%, and franchised same-store sales have gained 1.5%. Management sees 2011 earnings growth slowing from 2010, but still projects an enviable 18% increase. Buffalo Wild Wings has been a great growth company and a rewarding stock for investors, but currently priced at more than 21 times estimated 2011 earnings, shares don't come cheap.

Want to keep up to date on Buffalo Wild Wings? Add it to your watchlist.

Buffalo Wild Wings is a Motley Fool Hidden Gems pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.                                                    

Fool contributor Matt Koppenheffer owns shares of McDonalds, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.


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