NEW YORK (TheStreet) -- Investing is a journey, not a sprint.
Buffalo Wild Wings (BWLD) long-term financials exemplify why patience in the investing process pays dividends.
Led by long-time President and CEO Sally J. Smith, Buffalo Wild Wings, the beer, wings and sports-watching outfit, has grown to more than 1,030 owned and franchised locations in the U.S., Canada and Mexico. Through new introductions to the menu such as limited-time wing sauces, and restaurant remodels that project a stadium-viewing experience, "B-Dubs" as it's affectionately referred to by regulars, has served up a sizzling financial track record.
Buffalo Wild Wings' gross profit margin has trended higher from 71.97% in fiscal 2005 to 73.54% in the current stub period. Operating profit margins during that timeframe have tacked on 279 basis points to 9.91%. Both are impressive achievements in the ultra-competitive restaurant business, and a clear sign that Buffalo Wild Wings' concept is differentiated enough, and with its loyal following can push through price increases when required (usually amid wing price inflation).
Buffalo Wild Wings' same-restaurant sales for company-owned locations have experienced an accelerated growth rate for five straight quarters, according to Bloomberg, and two consecutive quarters for franchised locations. At a 7.7% increase in the second quarter for company-owned restaurants, Buffalo Wild Wings' same-restaurant sales meaningfully outperformed McDonald's (MCD) U.S. sales -- which declined 1.5% -- and Panera Bread (PNRA) -- which posted an unchanged metric year over year.
The market didn't gobble up Buffalo Wild Wings shares following the second-quarter earnings release last month as analysts questioned the expense outlook for the remainder of 2014 and the subsequent possibility of moderating earnings growth.
"We anticipate higher labor costs as a percentage of restaurant sales compared to the prior year and the second quarter. We are adding guest experience captains at nearly 80 additional company-owned restaurants in the third quarter, and in California and Minnesota minimum wage increases go into effect this quarter," noted head of investor relations Heather Pribyl on the company's earnings call. Pribyl added that " with these increases in hourly labor, we estimate that labor could increase 50 basis points sequentially over last quarter."
On the particular topic of guest experience captains, which hold such duties as managing audio and visual equipment and reaching out to the local community, Chief Operating Officer James Schmidt remarked on the call: "I'd say it takes us at least a few months to really get efficient with the guest experience model. So I would expect the inefficiencies to continue through the third quarter and fourth quarter."