Buffalo Wild Wings Meets Earnings Target

For a second consecutive quarter, Buffalo Wild Wings Inc. posted a quarterly drop in same-store sales, though the decline was offset by a rise in revenue propelled by the opening of new locations.

The boost from the new storefronts helped the chain meet earnings expectations, though it missed the estimate drawn up by Wall Street analysts for revenue.

Shares of the company rose 2.4% to $150.50 after hours.

Same-store sales at company-owned branches fell 2.1% while franchised restaurants had same-store sales fall 2.6%. In the prior quarter, same-store sales fell 1.7% and 2.4% respectively.

At the same time however, overall revenue for company-owned restaurants, the bulk of the company's sales, climbed 16%, propelled by the addition of some 89 locations.

Overall for the quarter, net income rose to $23.7 million, or $1.27 a share, from $21.5 million, or $1.12 a share, a year earlier. Revenue increased 15% to $490.2 million.

Analysts told Thomson Reuters that they expected earnings of $1.25 a share on revenue of $498 million.

Average weekly sales for company-owned Buffalo Wild Wings restaurants decreased 3.3% to $59,894 from $61,960 a year ago.

The restaurant chain, which has faced some struggles this year, could be in for more pressure. Activist investor Marcato Capital Management LP disclosed Monday it had acquired a 5.1% stake in Buffalo Wild Wings Inc.

The move, unveiled in a regulatory filing, made the San Francisco-based fund one of the top five stakeholders of Buffalo Wild Wings. The stake was purchased on July 22, according to the filing. A calling seeking comment from Marcato wasn't immediately returned.

Previously this year, health officials investigated one of the chain's stores in Overland Park, Kan. for possible links to an outbreak of gastrointestinal illnesses.

Write to Ezequiel Minaya at [e-mail]

(END) Dow Jones Newswires

July 26, 2016 17:55 ET (21:55 GMT)

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