Total Revenue Up, Same-Store Sales Down at Buffalo Wild Wings
Buffalo Wild Wings, Inc. announced financial results for the first quarter ended March 27. Highlights for the first quarter vs. the same period a year ago were:
- Total revenue increased 15.4 percent to $508.3 million
- Company-owned restaurant sales increased 16.6 percent to $483.9 million
- Same-store sales decreased 1.7 percent at company-owned restaurants and 2.4 percent at franchised restaurants
- Net earnings increased 12.8 percent to $32.8 million from $29 million, and earnings per diluted share increased 13.5 percent to $1.73 from $1.52
Sally Smith, president and chief executive officer, says, “Our total revenue in the first quarter increased 15.4 percent, when compared to the prior year, resulting from continued unit development and franchise acquisitions over the last 12 months. We are dissatisfied to report a same-store sales decline and we're undertaking several sales-driving initiatives to regain momentum. We were able to manage costs and improve our restaurant-level margin, and earnings per diluted share increased 13.5 percent year-over-year to $1.73.”
Total revenue increased 15.4 percent to $508.3 million in the first quarter, compared to $440.6 million in the first quarter of 2015. Company-owned restaurant sales for the quarter increased 16.6 percent over the same period in 2015, to $483.9 million, driven by 100 additional Buffalo Wild Wings restaurants at the end of the first quarter of 2016, partially offset by a same-store sales decrease of 1.7 percent. Franchise royalties and fees decreased 5 percent to $24.3 million for the quarter, versus $25.6 million in the first quarter of 2015. This decrease is attributed to seven fewer franchised Buffalo Wild Wings locations and a same-store sales decrease of 2.4 percent at franchised Buffalo Wild Wings restaurants in operation at the end of the period, compared to the same period in 2015.
Average weekly sales for company-owned Buffalo Wild Wings restaurants were $62,829 for the first quarter of 2016, compared to $64,851 for the same quarter last year, a 3.1 percent decrease. Franchised Buffalo Wild Wings restaurants in the U.S. averaged $65,636 for the period, versus $67,075 in the first quarter a year ago, a 2.1 percent decrease.
Other income in 2016 consisted primarily of a gain related to the valuation of contingent consideration for a franchise acquisition of $1.1 million, partially offset by interest expense of $0.9 million.
Smith remarks, "We are focused on sales-driving initiatives to regain momentum in 2016. To strengthen our FastBreak lunch program, we're piloting a speed of service guarantee. We're promoting Wing Tuesdays while evaluating different pricing and bundling options for this value day. Soccer is a growing sport in the United States and we'll be the place to watch all the action on the pitch for the major tournaments this summer."
Smith concludes, "The Buffalo Wild Wings brand remains strong and poised to deliver long-term earnings growth. In 2016, we're continuing our development of new company-owned and franchised Buffalo Wild Wings restaurants in the United States and we are aggressively remodeling locations. Given our recent sales trends and an increasing outlook for the cost of traditional chicken wings, we believe earnings per diluted share in 2016 should be $5.65 to $5.85.”
For 2016, the company expects the following new unit development:
- Approximately 40 company-owned Buffalo Wild Wings restaurants
- Thirty to 35 franchised Buffalo Wild Wings locations in the U.S.
- Twelve to 15 franchised Buffalo Wild Wing locations internationally
- Six company-owned and 4 franchised R Taco restaurants
- Continued unit expansion by PizzaRev
For 2016, the company expects the following:
- Improving same-store sales
- Deflationary food costs, excluding traditional chicken wings
- Depreciation and amortization expense of $150 to $155 million
- Share repurchase activity of approximately $100 million
- Capital expenditures of approximately $190 million, excluding additional franchise acquisitions or emerging brand investments