Can Buffalo Wild Wings get any hotter?

 

The Minneapolis-based restaurant chain recently reported third-quarter same-store sales increased 11.8 percent at company-owned restaurants and 6.4 percent at franchised restaurants. Since going public in 2003, Buffalo Wild Wings has not had negative comps. In fact, company-owned stores have reported 24 positive same-store sales figures in the past 27 quarters.

 

"Buffalo Wild Wings is proving to be one of the most dynamic restaurant concepts with continued rapid growth potential," writes Ryan Fuhrmann of Motley Fool.

 

Buffalo Wild Wings' chief executive Sally Smith credits outstanding employees, good franchisees and strategic media buys for the company's success.

 

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In September, the brand unveiled its "you have to be here" message on ESPN and ESPN U. On radio, Buffalo Wild Wings promoted its ribs and combo platters. These advertising initiatives along with regional and local buys contributed to a total-revenue increase of 32.1 percent to $68.3 million.

 

"Obviously, we're pleased," Smith said of her 415-unit chain's stellar third quarter.

 

But the fourth-quarter figures may be even better.

 

Smith said the company will execute an even larger media spend starting in November. The brand will run new TV spots on ESPN, ESPNU, FOX Sports, ESPN Radio and local cable. These initiatives will be executed within the company's 3-percent of sales ad fund, Smith said.

 

"In late November, we'll hit the radio waves with a gift card message," Smith said. "We have redesigned the gift card with a holiday theme."

 

Shortly before Thanksgiving Day, Buffalo Wild Wings will sell apparel and glassware via the Internet and test stores.

 

But perhaps the best thing going for Buffalo Wild Wings is such strong penetration amongst its mostly male demographic.

 

"Many of their stores between one to three years are ramping up with good word of mouth," said Darren Tristano, vice president for Technomic Information Services, a foodservice research company. "Since they are expanding rapidly in new markets, it takes some time for their advertising and usage to work effectively. It doesn't take long for patrons to start frequenting BWW and making it their regular hang-out."

 

Tristano said Buffalo Wild Wings' positive trend will continue because of good management and quality takeout products.

 

"They are very kid friendly, especially with teenagers," Tristano said. "And this is a good time of year with football and baseball going strong."

 

Sports will be the main marketing venue for Buffalo Wild Wings in 2007, too. Smith said the company will run spots on the first two rounds of CBS' coverage of the NCAA Men's Basketball tournament. The wings chain will be the exclusive restaurant sponsor on Westwood One's coverage of the tournament.

 

Even with an outstanding marketing program, the company faces a myriad of variables, along with the rest of the industry: energy costs, rising wing prices, self-insurance costs and tax rates.  But Smith told investors they are prepared for the challenges that lay ahead. If after the elections, states like Colorado raise the minimum wage, Buffalo Wild Wings is prepared to raise menu prices in those regions.

 

To say the least, Smith and company are very strategic and thorough.

 

"Our annual goals for the next three years are to expand our unit base by over 15 percent, grow revenues by over 20 percent and leverage this growth to increase our bottom line by over 25 percent," Smith said. "And we expect to open our 500th store by the end of next year."

 

In February, Buffalo Wild Wings will move operations from its very first store (in Columbus, Ohio) to a newly built outfit decked out with plasma HDTV. The store opening will commemorate the brand's 25th anniversary. To celebrate the achievement, the company is throwing a "huge" party.

 

"It will be the hottest ticket in town," Smith said.