Buffalo Wild Wings Is Spreading Its Wings

I think the odds are against you having had beef on weck. Weck is a roll with salt and caraway seeds, and beef on weck is a regional favorite -- or at least, it's regional -- around Western New York and into Ohio. Weck was also the third "W" in the name of the original "BW-3," which is now just Buffalo Wild Wings (NASDAQ: BWLD  ) . Beef on weck got the big ax from the menu lineup, but Buffalo Wild Wings lives on.

If weck devotees have been disappointed with the company's trajectory, investors certainly have not. Over the last year, Buffalo Wild Wings has outperformed the S&P 500 by over 30 percentage points, and by over 200 points over the last five years. Now that Buffalo Wild Wings is branching out, here's what investors have to look forward to.

Expanding the lineup at Buffalo Wild Wings
If you're familiar with the American food scene, you know it's impossible to sell wings without also selling pizza. Luckily, Buffalo Wild Wings is investing in a new venture to tap that saucy market. PizzaRev is an up-and-coming Chipotle-style pizza joint, and Buffalo Wild Wings has partnered with PizzaRev to open franchise locations. 

PizzaRev is seemingly the perfect mix of the Chipotle ordering style and pizza -- both hot topics in the restaurant business. For investors, the Chipotle operating system is hugely alluring. Chipotle turns in operating margins around 15% while last quarter, Buffalo Wild Wings hit just over 12%, and it's one of the better performers. Buffalo Wild Wings just opened its first PizzaRev. The franchise is going to focus on the Minneapolis market next (it already has several locations in California), and is planning to open at least two locations this year, as it starts to feel the business out. 

Buffalo Wild Wings' path to more growth
The PizzaRev concept is indicative of Buffalo Wild Wings' overall plan, but it's just a small part of that plan right now. The brand is trying to draw in new customers, and this week should be the beginning of a big push for the company as it's made a marketing blitz for the FIFA World Cup. Buffalo Wild Wings is hoping that the World Cup can be another March Madness or Super Bowl, in terms of traffic.

While it continues to push for a Chipotle-style operating system, Buffalo Wild Wings is still playing to its own strengths. The company is emphasizing its "guest experience model," which uses specialty employees in restaurants to help make sure guests' needs are being met. The company has seen increases in same-store sales in its managed locations. It's also rolling out tablets on tables, allowing customers to play trivia games, interact with the restaurants, and eventually, order from their tables.

The lineup of pizza, in-store expansion, and customer focus all give Buffalo Wild Wings a solid foundation for growth. The stock isn't cheap, but it's cheaper than Chipotle. I like the direction management is taking the company in, and I think that the World Cup offers the business a chance to get a solid increase in customers by focusing on a growing interest in America -- especially if the American team can do well. Which would be excellent.

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