B-Dubs Earns Some Respect

Investors have been flapping their chicken wings over Buffalo Wild Wings' (Nasdaq: BWLD  ) spicy first-quarter results. With investors slowly regaining an appetite for restaurant stocks, the company's 22% jump in price today makes it appear that B-Dubs is finally getting the respect it deserves.

In the midst of a soggy casual-dining climate, along with inflationary pressures eating away at profits, B-Dubs posted a saucy 21.7% increase in sales and a 16% boost in earnings per share. The robust top-line trend was helped by the rapid opening of new establishments, in keeping with the company's long-term plan to grow units by 15% annually. More importantly, existing restaurants are proving to be increasingly popular with customers, as same-store sales increased 4.1% at company-owned restaurants and 2.1% at franchised restaurants.

Tasty and affordable food, along with the sports-bar theme, attracts a steady stream of loyal sports fans on both weeknights and weekends. During the conference call, management boasted of selling 4 million buffalo wings on Super Bowl Sunday and said the company also saw strong guest growth during NCAA basketball's March Madness.

What I found most impressive during the quarter was management's ability to contain costs. A wide array of restaurants -- from Darden Restaurants' (NYSE: DRI  ) Red Lobster and other chains, to Brinker's (NYSE: EAT  ) Chili's franchises, to the more moderately priced Steak n Shake (NYSE: SNS  ) -- continue to struggle as food and energy inflation pinch consumer pocketbooks and increase raw-material costs. B-Dubs had it slightly easier than the competition, as fresh wing prices fell $0.07 to $1.33 per pound from last year. It has also been proactive in increasing menu prices and making other modifications, such as charging extra for side items like french fries.

The company stated that it is on track to maintain its long-term 25% earnings growth this year. Even with the big jump in the share price today, B-dubs is still trading well below its 52-week high, meaning it has plenty of potential upside given the strong growth trends it is posting. 

Related Foolishness:

Read/Post Comments (0) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 634011, ~/Articles/ArticleHandler.aspx, 5/24/2016 8:00:00 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 10 hours ago Sponsored by:
DOW 17,492.93 -8.01 -0.05%
S&P 500 2,048.04 -4.28 -0.21%
NASD 4,765.78 -3.78 -0.08%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

5/23/2016 3:59 PM
BWLD $139.55 Down -0.81 -0.58%
Buffalo Wild Wings CAPS Rating: *****
BH $366.15 Up +3.35 +0.92%
Biglari Holdings CAPS Rating: ***
DRI $65.00 Down -1.15 -1.74%
Darden Restaurants… CAPS Rating: ***
EAT $43.83 Down -0.57 -1.28%
Brinker Internatio… CAPS Rating: ****