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Buffalo Wild Wings Is Hot-n-Spicy on Profit, Mild on Revenue (Update 1)

This story has been updated from 4:36 pm EST to include comments from the company's conference call.

NEW YORK (TheStreet) - Buffalo Wild Wings' (BWLD) fourth-quarter results blew past consensus estimates for earnings and same-store sales growth, yet came up short on total revenue.

The Minneapolis-based wing and sports bar restaurant chain reported net income of $20.8 million, up 25% from a year earlier. The company earned $1.10 per share for the final quarter of the year. Analysts, according to Thomson Reuters, expected the company to post earnings of $1.06 a share, up 20% year over year.


WATCH: Buffalo Wild Wings Beats on Bottom Line, Light on Revenue

Same store sales rose 5.2% at company-owned stores, beating sales growth estimates of 4.2%, according to Consensus Metrix. Sales growth at franchised locations rose 3.1%, besting estimates of 2.9%.


Yet overall revenue fell short of estimates. Total revenue rose 12.4% to $341.5 million, with company-owned restaurant sales rising 13.1% to $319.8 million. Analysts had expected Buffalo Wild Wings to post revenue of $347 million.

"With our wall-to-wall televisions and big screens, Buffalo Wild Wings was the place for our guests to Tablegate and watch football - from NCAA bowl games to the NFL playoffs culminating with the Super Bowl," CEO Sally Smith said in the earnings statement. "The excitement of March Madness is just around the corner and we'll launch our Blazin' Bracket Challenge to engage guests online and in restaurant."

Smith said that same-store sales for the first five weeks of 2014 rose 4.8% at company-owned restaurants and 2.1% at franchised locations compared to a decline of 0.2% and 1.0%, respectively, for the same period last year.

Buffalo Wild Wings expects to open nine company-owned restaurants and 13 franchised locations in the first quarter. The company just surpassed its one thousandth location.

"We continue to evolve Buffalo Wild Wings as a vibrant and strong brand. We recently achieved a significant milestone with the opening of our 1,000 location. We are rolling out new guest-facing technologies, including tabletop tablets and proprietary TV content, to further enhance guest engagement," Smith says. "In addition to continued unit growth, net earnings will be driven by same-store sales momentum and continued operational diligence. We reaffirm our 20% net earnings growth goal for 2014."

Buffalo Wild Wings became a minority investor in PizzaRev, a small artisan pizza concept based in Los Angeles, in March 2013.

Smith said on the conference call that the chain is actively looking at "potential investments in additional concepts that will help fuel long term growth."

When asked by an analyst what those investments could look like, Smith said:

"Our criteria for that small emerging brands really hasn't changed. We would like it to be in the fast casual perhaps casual dining sector, the ability to have locations across the country. It's franchise, it's simple operations and anywhere from a couple of units to maybe a dozen or more. There's a lot of interesting things out there and we are actively looking and talking with different founders and talking about their goals."

She added that the company could add "one or two small concepts by the end of the year."

Shares were up 1.7% in after-hours trading to $143.10.

--Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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