News

Buffalo Wild Wings in heated debate over financials

April 25, 2017

Buffalo Wild Wings and CEO Sally Smith have been catching some heat over the past couple weeks from Marcato Capital Management, a San Francisco-based investment firm that owns 6.1 of the chain's stock.

In company press releases, Marcato has publicly claimed that the chain gave inaccurate information in its definitive proxy materials filed on April 21. Marcato is specifically questioning the chain's claim (found in the Total Return Comparison Graph) that it has outperformed the S&P 600 Restaurant Index over the past five years.

Buffalo Wild Wings, however, denied the accusation today in its own statement saying that a third party — Research Data Group —  calculated the TRCG using the same methodology it has used since it began working with the chain in 2006.

"Buffalo Wild Wings believes the TRCG accurately represents the blended, market-capitalization weighted returns generated by companies that were constituents of the S&P 600 Restaurant Index as of the end of its last fiscal year," according to the statement from Buffalo Wild Wings. "Buffalo Wild Wings' total return outperformed this index over the last five years."

In the statement from Marcato, Managing Partner Mick McGuire called the analysis "sloppy and self-serving."

"This is an astronomical error and the fact that we need to point it out should make all shareholders question many arguments management has put forth," he said.

Today's statement from Buffalo Wild Wings, however, pointed out that it has "generated industry-leading total shareholder returns since its IPO in 2003. Over shorter periods (such as one and three years) and longer periods (such as ten years), the company has delivered a total return exceeding the median return generated by other casual dining restaurant companies."