Buffalo Wild Wings Earnings: Profit and Revenue Rise, Yet SHORT of Estimates

Buffalo Wild Wings Inc. (NASDAQ:BWLD) reported higher profit for the second quarter as revenue showed growth. 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. rose to $11.7 million (62 cents per share) vs. $10.7 million (58 cents per share) in the same quarter a year earlier. This marks a rise of 9.3% from the year-earlier quarter.

Revenue: Rose 29.7% to $238.7 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. Analysts were expecting revenue of $240.3 million.

Quoting Management: Sally Smith, President and Chief Executive Officer, commented, “We are very pleased with our strong sales and our ongoing ability to drive revenue increases. We continue to outpace the casual dining category with same-store sales increases of 5.3% at company-owned restaurants and 5.5% at franchised locations for the second quarter. The combination of strong same-store sales, new restaurant performance, and franchised restaurants acquired in 2011 fueled our substantial revenue increase of nearly 30%. We managed controllable costs, but the higher year-over-year wing costs in the second quarter moderated our net earnings to a 9.3% increase over the same quarter last year, providing earnings per diluted share of $0.62 compared to $0.58 a year ago.”

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 31.8%, with the biggest boost coming in the first quarter when revenue rose 37.9% from the year earlier quarter.

The company has now seen its net income rise for three quarters in a row. In the first quarter, net income rose 22.8% and in the fourth quarter of the last fiscal year, the figure rose 34%.

The company fell short of forecasts after beating estimates in the previous two quarters. In the first quarter, it topped the mark by 3 cents, and in the fourth quarter of the last fiscal year, it was ahead by 6 cents.

Margins increased in the first quarter after dropping the quarter before. Gross margins grew to 70.8%, up 42.9 percentage points from the year-earlier quarter. In the fourth quarter of the last fiscal year, the figure rose 2.7 percentage points to 25.9% from the year earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from 68 cents per share to 63 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $3.28 a share to $3.27 over the last ninety days.

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

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