As I write this shares of one of my top holdings, BWLD, are being knocked down by 20% due to an earnings miss after last night's market close. I have owned shares of Buffalo Wild Wings for over a year and have bought once again to lower my average cost.
The earnings came in last night around 5pm at 25 cents per share vs. a consensus of 31 cents per share. The company earned $4.6 million, up from $4.3 million in the same period last year. Revenue was up 29% versus last year. Same store sales in company owned stores were up almost 7%. Same store sales in franchised stores were up over 2%.
Buffalo Wild Wings opened 12 company owned restaurants and 12 franchised stores in this quarter. The company also completed the acquistion of nine franchised stores in Las Vegas.
The company said growth for the year should be in the 20-25% range rather than the 25% range that had been expected. The company also no longer has chicken prices locked in so it buys them on the open spot market.
Buffalo Wild Wings is one of the few restaurants posting positive same store sales during this cutback on spending economy. If you visit a Buffalo Wild Wings it is generally busy during any given sporting event with people playing poker or trivia games while enjoying wings and beer. The company offers specials on boneless wings two nights a week. Buffalo Wild Wings also has specials on regular wings one night a week. The company offers kids night one night a week as well.
The company has done well to weather this economic downturn. I fully expect shares to recover from this slaughter. I went ahead and reloaded by buying shares today, once again lowering my average cost paid per share.
I rate the shares a Buy and have a price target of $35 by 11/01/09.
Price Now: $24.03
Target Price: $35.00