Buffalo Wild Wings Earnings: Margins Shrink, Profit Drops

Rising costs hurt Buffalo Wild Wings Inc. (NASDAQ:BWLD) in the third quarter as profit dropped from a year earlier. Buffalo Wild Wings is an owner, operator, and franchiser of restaurants.

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Buffalo Wild Wings Inc. Earnings Cheat Sheet

Results: Net income for Buffalo Wild Wings Inc. fell to $10.7 million (57 cents per share) vs. $11.3 million (61 cents per share) a year earlier. This is a decline of 5% from the year-earlier quarter.

Revenue: Rose 24.8% to $246.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Buffalo Wild Wings Inc. fell short of the mean analyst estimate of 68 cents per share. It beat the average revenue estimate of $240.3 million.

Quoting Management: Sally Smith, President and Chief Executive Officer, commented, “We’re pleased with our strong top-line growth of nearly 25% in the third quarter. We focused on operational excellence at the restaurant level and our teams delivered strong same-store sales. In addition, we leveraged on labor, operating, and occupancy expenses. High cost of sales and incremental preopening expenses moderated our bottom-line expansion, producing earnings per diluted share of $0.57 compared to $0.61 in 2011.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 31.5%, with the biggest boost coming in the first quarter when revenue rose 37.9% from the year earlier quarter.

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the second quarter, net income rose 9.3% from the year earlier, while the figure increased 22.8% in the first quarter, 34% in the fourth quarter of the last fiscal year and 32.5% in the third quarter of the last fiscal year.

After beating analyst estimates for the two previous quarters, the company fell short of forecasts. In the second quarter, it topped the mark by 3 cents, and in the first quarter, it was ahead by 6 cents.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 63 cents per share, down from 68 cents ninety days ago. The average estimate for the fiscal year is $3.27 per share, down from $3.28 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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