Buffalo Wild Wings Earnings: An Early Look

Earnings season is in full swing, and huge numbers of companies have already given their latest numbers to investors. The key to making smart investment decisions, with companies releasing their quarter reports, is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

Let's turn to Buffalo Wild Wings (NASDAQ: BWLD  ) . The restaurant chain has long been highly successful even during tough economic times, but higher food costs have caught up to the stock recently. Let's take an early look at what's been happening with Buffalo Wild Wings over the past quarter, and what we're likely to see in its quarterly report next Tuesday.

Stats on Buffalo Wild Wings

 

 

Analyst EPS Estimate

$0.95

Change From Year-Ago EPS

30%

Revenue Estimate

$292 million

Change From Year-Ago Revenue

32.4%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo Finance.

Will Buffalo Wild Wings keep spicing up its results?
Analysts have remained locked in on Buffalo Wild Wings over the past three months, not changing their earnings estimates by a single penny. Investors have been a bit more optimistic, though, with the shares rising about 4% since early November.

Restaurant chains have come a long way from the dark days of the recession four years ago. With consumers having more disposable income to spend, Buffalo Wild Wings has been able to rebound nicely from its big pullback in 2008, and post consistent growth ever since.

But Buffalo Wild Wings and its competitors have had to handle rising food costs. Chipotle Mexican Grill (NYSE: CMG  ) saw its shares crushed when it reined in growth projections due to the cost of its ingredients, and Buffalo Wild Wings has also cited food prices as a major source of uncertainty for its overall cost structure. Although Panera Bread (NASDAQ: PNRA  ) has managed to fight back by having internally owned and operated central bakeries produce dough for franchise locations throughout their respective regions, it would be challenging for Buffalo Wild Wings to take similar action by vertically integrating chicken farms into its restaurant business.

Still, the big advantage that Buffalo Wild Wings has over its competitors is a strong balance sheet. By contrast, recent IPOs from casual-dining restaurant chains Chuy's Holdings (NASDAQ: CHUY  ) and Bloomin' Brands (NASDAQ: BLMN  ) have involved huge amounts of debt, leaving Buffalo Wild Wings looking like a much safer bet.

One place on which to focus your attention in next week's report is how the company balances the huge demand for Buffalo Wild Wings' restaurant experience, especially in the aftermath of the Super Bowl, with the pressures on chicken-wing prices. Given the fundamental importance of both of those factors, how they balance out could give you insight about the company's future for years to come.

Can Chipotle beat out Buffalo Wild Wings?
In the fight for restaurant supremacy, the big question is whether Chipotle can grow fast enough to outpace Buffalo Wild Wings and their restaurant competitors. Let Fool analyst Jason Moser answer that question for you in his new premium research report on Chipotle, which looks at the burrito giant's competitive situation against Buffalo Wild Wings and others. Don't wait; click here now and get started! 

Click here to add Buffalo Wild Wings to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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