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Shares in Buffalo Wild Wings plunge nearly 10% after 1Q earnings miss
© Reuters. Buffalo Wild Wings shares dropped more than 9% after missing analysts' forecasts with its 1Q earnings
Investing.com -- Shares in Buffalo Wild Wings Inc (NASDAQ:BWLD) plunged nearly 10% in after-hours trading, after the Minneapolis-based chain restaurant and sports bar franchise failed to meet forecasts with its first quarter earnings released on Tuesday.
While company revenues soared 20% to $445 million from $368 million during the same period last year, Buffalo Wild Wings still fell short of analysts' expectations for quarterly earnings of $452 million. Earnings per share, meanwhile, rose to $1.52 above $1.49 during the first quarter of 2014, but below forecasts of per share estimates of $1.63.
"We're pleased with our first quarter same-store sales of 7.0% at company-owned restaurants and 6.0% at franchised locations. Sales were exceptionally strong during the college football bowl games as well as the NFL playoffs," CEO Sally Smith said in a statement. "Buffalo Wild Wings really came alive during March Madness® and we launched a new advertising campaign with unique commercials for each round of the tournament."
Analysts expected same-store sales to increase by 8.6% at Buffalo Wild Wings' company-owned restaurants and 7.9% at its franchises nationwide.
The company was not helped by a 41% spike in the cost of poultry per pound, which hurt its margin.
"Our sales growth leveraged operating, occupancy, and general and administrative costs. As anticipated, cost of sales and labor as a percentage of restaurant sales were higher than the prior year, which tempered our net earnings growth," Smith added.
Moving forward, the company will keep its net earnings growth goal for fiscal year 2015 constant at 18%.
"We're bringing the World of Sports to Buffalo Wild Wings beginning in June, highlighting fun and unique sports from the U.S. and around the world. To further engage Guests, we'll have new in-restaurant games to play during the World of Sports promotion with prizes awarded daily and weekly," Smith said.
"Our focus remains on creating an engaging sports-viewing experience with great food and beverage offerings for our Guests and we continue to make progress in guest experience technology initiatives."
Shares in Buffalo Wild Wings fell 18.20 or 9.91% in after-hours to 183.70.
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