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Buffalo Wild Wings: Stock Winners

Buffalo Wild Wings posts stronger-than-expected comps as the wing-and-beer chain picks up steam.



) -- Shares of

Buffalo Wild Wings


jumped 4.8% Wednesday afternoon after the wing-and-beer purveyor grew quarterly profits by 31%.

Shares changed hands at rapid speed with more than 1.7 million shares in play, compared with the 30-day trailing average volume of just 389,000 shares.

Buffalo Wild Wings said late Tuesday its comparable same-store sales, or sales at stores open at least one year,

declined 0.1% at company-owned restaurants last quarter

, and 0.7% at franchised locations. Restaurants' comps figures are closely watched by investors because they demonstrate the sustainability of store traffic and customer volume in well-established locations.

Reporting a decrease in comps would normally be viewed as a negative, especially in light of fellow restaurant chains' strong performance by that metric in recent months. But analysts expected a wider decline from Buffalo Wild Wings after the key metric fell 3.7% in April; comps were flat in June.

"We thought comps progressed, and the magnitude of improvement was better than expected," Lynne Collier, managing director at Sterne Agee, told


. She expected Buffalo Wild Wings to post a 2.5% decrease in comps for the recent quarter.

Panera Bread


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, which also reported stronger-than-expected financials after the closing bell Tuesday, said it

grew comps 9.9% in the second quarter

, year-over-year. Earlier Tuesday, pizza purveyor

Domino's Pizza


posted comps growth of 8.8%

, a strong number but disappointing to investors who were looking for the figure to come in around 10%.

Chipotle Mexican Grill



booked comps growth of 8.7%

year-over-year, putting the burrito chain "at the top of the pack in industry leading comps," according to Oppenheimer analyst Matthew J. DiFrisco.

Collier maintained a neutral rating on Buffalo Wild Wings shares. She said the stock will probably move a little higher on investor enthusiasm over the company's strengthening financials, but that it is unlikely in the near term to reach the $50-per-share price it garnered earlier this year. Buffalo Wild Wings shares last closed above that threshold on April 27.

Buffalo Wild Wings got a boost last quarter from the World Cup, the NHL and the NBA finals when it lured fans with its beer offerings and 3D viewings of certain sporting events.

"We have limited information that comps continued after those events were over," Collier said. "While we're encouraged, we'd like to see more evidence of a sustainable turnaround."

Buffalo Wild Wings seems on track to provide that evidence. It said same-store sales grew 2.2% at company-owned stores so far in July.

Buffalo Wild's earnings grew 31.4% last quarter to $9.2 million, or 50 cents per share, up from $7 million, or 39 cents per share, in the year-earlier period. Revenues increased 12.4% to $145.7 million. The company did not offer specific comps guidance but said it now expects unit growth at the low end of its previously offered outlook, or 13%.

With the economy still very much in recovery mode and the jobs market stubbornly weak, consumers continue to be choosy about how they spend their limited discretionary funds. For fast food and fast-casual restaurant chains, that means competition is stiffer than ever.

>> Consumer Confidence Swoons in Summer

Panera forecast EPS for the third and fourth quarters, and the full year, above Wall Street analysts' consensus call, a strong vote of self-confidence for the bakery-café chain. It also expects comps to grow as much as 6% in the current quarter and again in the fourth, and as much as 8% for 2010. That's higher than its previous outlook for full year comps growth up to 7.5%.

-- Reported by Miriam Marcus Reimer from New York.


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