Nationwide sport bar operator and Motley Fool Hidden Gems recommendation Buffalo Wild Wings (NASDAQ:BWLD) is reporting earnings Thursday night. Will they be mild, spicy, or insanely hot? Let's dig in and find out.

What analysts say:

  • Buy, sell, or waffle? Fourteen analysts cover the company -- talk about fun field research! Nine think it's worthy of a buy rating, while five say its better to stay on the sidelines.
  • Revenues. Analysts agree that a 37% year-over-year boost to $81 million is a realistic goal.
  • Earnings. The analyst community has its sights set on $0.53 per share, up from $0.30 last year.

What management says:
CEO Sally Smith doesn't like to give out earnings guidance. "Buffalo Wild Wings is a growing and dynamic company, with myriad variables such as same-store sales, wing prices, self-insurance costs, and tax rates, making accurate guidance on a quarterly basis challenging," she says. However, management does have some goals, including 25% annual earnings growth, 20% revenue improvements, and 15% more stores every year for the next three years.

What management does:
These numbers tell the tale of a measured approach to growth. The company is exhibiting some very nice behavior, increasing return on equity (ROE) as it grows. That's happening thanks to improving margins and fiscal discipline. Free cash flow -- which includes the costs of building new stores -- has remained positive, meaning that the expansion is funded from operational cash flows rather than debt or share offerings. It's not a mad dash to build out the store network as quickly as possible (a phenomenon that has destroyed so many promising restaurant and retail chains).

Margins

6/2005

9/2005

12/2005

3/2006

6/2006

9/2006

Gross

38.4%

38.8%

38.8%

39.3%

39.5%

39.5%

Operating

7.2%

7.5%

7.9%

8.3%

8.1%

8.3%

Net

4.2%

4.4%

4.2%

4.5%

4.4%

4.8%

FCF/Revenue

1.7%

0.4%

1.3%

3.3%

1.9%

1.9%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
This company's earnings have been hit-and-miss as far as meeting analyst expectations, but it's doing great against its internal targets. More importantly, this wild buffalo isn't killing itself to get the job done. I argued against this company in a Duel last summer, but I wouldn't take that side of the argument again. This management team is working against a long-term timetable, and doing all the right things to grow the business in a sustainable manner. Congrats to Ryan Fuhrmann -- the right Fool won that fight.

Competitors:

  • CBRL Group (NASDAQ:CBRL)
  • Famous Dave's of America (NASDAQ:DAVE)
  • Texas Roadhouse (NASDAQ:TXRH)
  • Brinker International (NYSE:EAT)
  • Darden Restaurants (NYSE:DRI)
  • Yum! Brands (NYSE:YUM)

For more on Buffalo Wild Wings, check out:

Buffalo Wild Wings is a Motley Fool Hidden Gems selection, and you can learn much more about it with a free 30-day trial subscription.

Fool contributor Anders Bylund holds no position in any of the companies discussed here, and he still doesn't like chicken wings. You can check out Anders' holdings if you like, and Foolish disclosure comes smothered in Mango Habanero sauce.