Times have changed for women in America. Just ask my mom.
She constantly reminds me of it -- she says I'm luckier than she was to be in a world where females have numberless options for careers. Women are working their way up the corporate ladder, and in the case of the Motley Fool Hidden Gems recommendation Buffalo Wild Wings
Boys, move over
In the early '90s, the founders of this bar and restaurant franchise, Jim Disbrow and Scott Lowery, had no growth strategy and were in dire need of financial help. Sally Smith (now CEO) and Mary Twinem (CFO) stepped in to dig the company out of trouble. It emerged from its financial mess and in 2003 issued an IPO. The chain now boasts 465 locations and has grown its revenue and profits 27.1% and 57.1%, respectively, over the past two years.
There's a common stereotype that women are too soft or emotional to run successful businesses. But the performance from Buffalo Wild Wings shows the folly of this assumption. Forbes recently ranked Buffalo Wild Wings the 27th best small company of 2007. I think the fact that five out of six higher-ups are women actually helped the company accomplish this. Why?
Cartoons at a bar?
The women have successfully morphed a masculine sports bar into a family-friendly food chain. It's a place where beer, wings, and big-screen TVs attract more than just male sports fanatics because management understands what parents look for in an ideal place to eat out. Rather than offer only football and hockey games, the restaurants offer everything from cartoons to trivia games to videos of local youth sports teams.
If you're thinking an episode of SpongeBob on the video would kill the atmosphere of a sports bar, think again. Offering child-friendly entertainment keeps kids occupied so parents can socialize. As a result, more alcoholic beverages are sold -- which are typically high-margin menu items and account for 29% of the company's overall sales.
|
12/29/2002 |
12/25/2003 |
12/26/2004 |
12/25/2005 |
12/31/2006 |
|
|---|---|---|---|---|---|
|
Gross Margin % |
42.4% |
40.0% |
38.3% |
38.8% |
40.1% |
|
EBIT Margin % |
7.0% |
6.3% |
6.6% |
7.1% |
8.1% |
|
Net Income Margin % |
3.2% |
2.8% |
4.2% |
4.2% |
5.8% |
While the gross margin has been pressured by the rising cost of chicken, operating and net margins have both improved over the years. By accommodating their customers, the company has found that letting patrons stay as long as they like and attracting large groups actually leads to larger bills and thus enhances margins.
Are women more powerful than you think?
With 80% of consumer decisions made by women, it's optimal for businesses to fill some upper-management positions with females. Some studies show that women are good at making decisions for the long term, and men are speedy decision makers who focus on the present. Additionally, women tend to ask more questions than men, who typically try to answer questions.
These characteristics are apparent in the management team at Buffalo Wild Wings. The top women spend time personally interviewing and interacting with customers to find out what their patrons really want. They engage in food preparation in the kitchens and sample menu items at locations across the nation. CEO Smith is open to change and implements many improvements that franchisees suggest rather than making all the decisions on her own.
Management kicks it up a notch
These management strategies have allowed the franchise to flourish in an intense bar and grill industry. We've seen unappetizing performance among rivals like Applebee's
Management is a major factor when analyzing stocks. While women executives are still fairly rare in the restaurant industry, this team certainly knows how to get things done right. Restaurant concepts that differentiate themselves, like Chipotle
Spice up on Buffalo Wild Wings' performance:
