Buffalo Wild Wings (NASDAQ:BWLD) is a big mover early in the trading day this morning, after the company reported poor first quarter earnings. The restaurant reported earnings per share of $1.52 on revenue of $440.6 million. Analysts were looking for earnings per share of $1.63 on revenue of $452.7 million. Not only did Buffalo Wild Wings (NASDAQ:BWLD) miss analysts’ estimates, but comparable same store sales came in at 7%, short of the 8.6% estimate. To make matters even worse, the company reported that chicken wing costs had jumped 41% during the quarter, which significantly cut into Buffalo Wild Wings’s profit margins. The stock is down -14% in early trading Wednesday.
Management happy with results, despite investor reaction
Buffalo Wild Wings CEO, Sally Smith, did not share the same disappointment that shareholders and analysts had about the earnings: “We’re pleased with our first quarter same-store sales of 7.0% at company-owned restaurants and 6.0% at franchised locations”. Smith went on to report that attendance during the college bowl games, NFL playoffs, and March Madness was very good. However, the party was short lived when Smith announced that same store sales so far in the second quarter have been weak: 4.2% at company owned and 1.8% at franchised. This is compared with second quarter 2014 same store sales of 5.7% at company owned and 4.4% at franchises. With costs rising in first quarter and dragging on results and now same store sales already weak in second quarter, investors quickly head for the exits.
Buffalo Wild Wings to charge cover for Mayweather-Pacquiao Fight
This Saturaday, May 2nd, the Mega-Fight between Floyd Mayweather and Manny Pacquiao is set to take place. Being that the fight costs $100 to watch on PayPerView at home, most people will most likely be heading out to sports bars to watch the highly anticipated fight. Buffalo Wild Wings is expected to be packed during the fight, but if you plan to go watch the big fight there, be sure to bring extra money. CNN Money reports that Buffalo Wild Wings (NASDAQ:BWLD) will be charging cover at the door on Saturday during the fight. It is unknown how much the cover is set to be or at which Buffalo Wild Wings restaurants the cover charges would apply to.
Overall, things look pretty ugly over at Buffalo Wild Wings. While the “surface” results from the earnings report missed both of the analysts’ estimates, the “under the surface” analysis of the earnings was very poor. Investors got spooked by the bearish news and that is why Buffalo Wild Wings (NASDAQ:BWLD) is down big today.