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Buffalo Wild Wings Management Discusses Q2 2012 Results - Earnings Call Transcript

On today's call, Sally will provide an overview of our performance for the second quarter. After that, I will provide further detail on the quarter and comment on trends to date in the third quarter. Finally, Sally will share some additional thoughts about the third quarter and remainder of this year. We will then answer questions.

So with that, I'll turn things over to Sally.

Sally J. Smith

Good afternoon, everyone. We're very pleased with our strong sales and our ongoing ability to drive revenue increases. We continue to outpace the casual dining category with second quarter same-store sales increases of 5.3% at company-owned restaurants. Our franchisees also outpaced the industry with a same-store sales increase of 5.5% for the quarter. The combination of strong same-store sales, new restaurant performance and franchised restaurants acquired in 2011 fueled our substantial revenue increase of nearly 30%.

For the second quarter, we managed controllable costs, but the combination of higher price per pound wing cost and the sharply lower wing per pound yield in the second quarter moderated our net earnings to a 9.3% increase over last year, providing earnings per diluted share of $0.62 compared to $0.58 in 2011.

The championship runs for college and pro basketball provided a strong foundation at the start of the quarter, and sports fans continue to gather in our restaurants to enjoy their favorite sporting events throughout the spring. Our new TV spot, called Best Friends, reminded viewers that Buffalo Wild Wings is a fun and social place where you can meet fellow sports fans and share the excitement of any game. It aired through the second quarter, including the NBA playoffs.

In the second quarter, we had 2 menu inserts to highlight the variety of our food and beverage offerings. The first insert featured Sharables, including our burger and pork slammers. Later in the quarter, a second insert showcased our flavorful signature sauces to create a custom burger experience. Both were successful, and same-store sales in our Sharables and burger categories each had double-digit sales increases for the quarter.

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