Buffalo Wild Still Flying on Profits

MINNEAPOLIS, Minn. ( TheStreet) -- Buffalo Wild Wings ( BWLD) shares continued to soar Monday nearly a week after the wing-and-beer purveyor topped quarterly profit expectations, posted strong sales and reaffirmed its 2011 outlook.

Following Buffalo Wild's stellar earnings report, analysts at Morgan Keenan raised their price target on the restaurant chain by $3 to $58 and reiterated an outperform rating on the stock.

Analyst Destin Tompkins said Buffalo Wild's strong same-store sales -- or sales at stores open at least one year, a key metric in the restaurant industry -- were boosted by the restaurateur's initiatives like the launch of "Happy Hour," gift card sales and successful marketing.

Buffalo Wild shares surged 6.5% Monday to $56.66. The stock continued to trade heavily as it did last week. Nearly 760,000 shares changed hands just over half way through the day's session, compared with their average daily volume of just 351,000.

Buffalo Wild said Tuesday it expected 2011 profits to grow more than 18%, and unit growth to grow 13%.

Same-store sales rose 3.8% at its company-owned stores and 1.5% at its franchised restaurants during the first six weeks of this year.

Buffalo Wild's fourth-quarter profit jumped 22.9% to $10.2 million, or 55 cents per share, beating analysts' consensus call by 3 cents per share. Quarterly revenue grew 13% to $163.9 million.

Ahead of the recent National Football League title game, the Minneapolis-based bar-and-grill chain predicted it would sell 6 million chicken wings as Super Bowl fans watched -- and ate through -- the big game, according to a Bloomberg report. That figure would have represented a 9% increase over last year's game.

"Takeout is huge for us on Super Bowl Sunday, but we're also seeing more dine-in guests," CEO Sally Smith told the news outlet. "We're seeing a bit of an improvement throughout the industry," she added, noting that people have "room in their budget for wings and a beer."

Smith added that she expected the big screen projections, plasma and LCD televisions Buffalo Wild has in most of its restaurants to help draw customers as they watched the sporting event.

Bar-and-grill rival Ruby Tuesday ( RT) recently posted better-than-expected quarterly earnings, topping estimates by more than 40%.

Ruby Tuesday earned $4.6 million , or 7 cents per share, in the three months ended Nov. 30, up from a year-earlier profit of $400,000, or a penny per share, and well ahead of analysts' consensus call for earnings of a 5 cents per share.

Total revenue rose 6.2% to $290.5 million in the November period, up from $273.5 million in the second quarter last year.

Ruby Tuesday's same-store sales rose 4.2% year-over-year, and its operating margin swelled to 15.1% in the latest quarter, from 13.7% last year.

Rival Applebee's, owned by DineEquity ( DIN), is set to report its quarterly results on March 3.

Analysts' consensus is for DineEquity, which also operates IHOP restaurants, to have booked a loss of $600,000, or 63 cents per share, in the recent quarter.

Revenue is expected to come in at $314.4 million.

Elsewhere in restaurant stocks, McDonald's ( MCD) reported strong January same-store sales on strength in China and Europe.

McDonald's grew comps 3.1% in the U.S. in January. Comps in Europe surged 7% while same-store sales in McDonald's Asia/Pacific, Middle East and Africa (APMEA) region rose 5.2%.

Systemwide sales in January increased 7.4%, or 6.7% in constant currencies, McDonald's said Tuesday.

In its recent quarter, McDonald's reported that global comps increased 5%, including 4.4% growth in the U.S., 3.4% in Europe and 5.5% in APMEA.

Yum! Brands ( YUM) topped quarterly expectations as well.

Taco Bell and KFC

Yum! said strength in China and other emerging markets helped it book a 26.9% rise in fourth-quarter profits to $274 million, or 56 cents per share.

Yum! said worldwide system sales grew 7% in the quarter, including 19% in China, 6% in its international division and 5% in the U.S.

Same-store sales grew 8% in China, 1% in international markets and 5% in the U.S.

"Our leadership and growth potential in China and other emerging markets, coupled with the strength of our brands around the world, lead us to believe we're on the ground floor of even more global growth," said CEO David C. Novak.

-- Written by Miriam Marcus Reimer in New York.

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