Buffalo Wild Wings Earnings Just Served Up Some Great News

Buffalo Wild Wings just beat expectations on both sales and revenue, but the report also contained some other welcome news for leery investors.

Apr 28, 2014 at 7:00PM


It's time to loosen your belts, Buffalo Wild Wings (NASDAQ:BWLD) investors, because your favorite beer-and-wings specialist just reported solid first quarter results.

I wouldn't blame you if you were on the edge of your seat this afternoon going into Buffalo Wild Wings' report. After all, shares fell more than 10% in February when Q4 earnings came in ahead of expectations, but revenue fell just short. In addition, investors revolted following cautious comments from management regarding rising wing costs, which could possibly suppress earnings growth for the remainder of 2014.

Even so, I still went out on a (chicken) limb at the time to suggest B-Dubs' earnings had plenty to like, in part because its new volume-based pricing structure would go a long way toward helping it manage such cost increases.

Delicious results
But b
efore we get to today's really good news, let's get the usual headline figures out of the way for Q1: Total revenue rose 20.9% to $367.9 million, driven by impressive same-store sales growth of 6.6% at company-owned restaurants and 5% at franchised locations. This translated to an impressive 71.3% increase in net earnings per diluted share to $1.49.

Analysts, on average, were looking earnings of just $1.34 per share on sales of $362.96 million, which makes this a solid quarterly beat by any measure. Sure enough, shares are up more than 5% right now in after-hours trading.

About that great news
Better yet, investors need worry no more about pesky food costs keeping a lid on net income growth. Buffalo Wild Wings CEO Sally Smith weighed in, "Based on our first quarter results, second quarter trends in same-store sales, and anticipated food costs, we believe we will achieve net earnings growth of 25% for 2014, an increase from our previous goal for the year."

Buffalo Wild Wings' old goal called for 20% net earnings growth in 2014, so this is a welcome bump which brings it more inline with the premium investors are paying for its shares. 

Better better yet, Smith concluded by reminding investors of Buffalo Wild Wings recently unveiled vision of "being a company of 3,000 restaurants worldwide creating the ultimate experience for our guests, and providing sustained growth for our shareholders." To be sure, that's a huge increase over the 1,010 Buffalo Wild Wings locations currently in the U.S., Canada, and Mexico.

What's a growth-hungry investor to do?
Don't get me wrong. I don't think investors should be willing to buy any company whatever the cost, and shares of Buffalo Wild Wings don't look particularly cheap trading around 35 times last year's earnings and 24 times next year's estimates.

However, I've already made clear my preference for investing in high-quality businesses at a reasonable premium, and Buffalo Wild Wings fits that bill to a T. Even after this pop, that's why I'm still convinced Buffalo Wild Wings stock remains a bargain for patient, long-term investors.

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Steve Symington owns shares of Buffalo Wild Wings. The Motley Fool recommends Buffalo Wild Wings. The Motley Fool owns shares of Buffalo Wild Wings. 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. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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