News

Buffalo Wild Wings suffers declining same-store sales

April 28, 2016

Same-store sales were down during Q1, according to Buffalo Wild Wings, which hosted its earnings call Wednesday. While total revenue increased 15.4 percent, to $508.3 million, and company-owned restaurant sales increased 16.6 percent to $483.9 million, same-store sales decreased 1.7 percent at company-owned restaurants and 2.4 percent at franchised restaurants.

"We are dissatisfied to report a same-store sales decline and we're undertaking several sales-driving initiatives to regain momentum. We were able to manage costs and improve our restaurant-level margin, and earnings per diluted share increased 13.5 percent year-over-year to $1.73 from $1.52," said Sally Smith, president and CEO.

2016 Outlook

The chain is focusing on sales driving initiatives to regain momentum in 2016.

"To strengthen our FastBreak lunch program, we're piloting a speed-of-service guarantee," Smith said. "We're promoting Wing Tuesdays while evaluating different pricing and bundling options for this value day. Soccer is a growing sport in the United States, and we'll be the place to watch all the action on the pitch for the major tournaments this summer."

Smith concluded the brand remains strong and poised to deliver long-term earnings growth.

"In 2016, we're continuing our development of new company-owned and franchised Buffalo Wild Wings restaurants in the U.S. and aggressively remodeling locations," she said. "Given our recent sales trends and an increasing outlook for the cost of traditional chicken wings, we believe earnings per diluted share in 2016 should be $5.65 to $5.85."

For 2016, the company expects the following new unit development:

• Approximately 40 company-owned Buffalo Wild Wings restaurants.
• 30 to 35 franchised Buffalo Wild Wings locations in the U.S.
• 12 to 15 franchised Buffalo Wild Wing locations internationally.
• Six company-owned and four franchised R Taco restaurants.
• Continued unit expansion by PizzaRev.

For 2016, the company expects the following:

• Improving same-store sales.
• Deflationary food costs, excluding traditional chicken wings.
• Depreciation and amortization expense of $150 to $155 million.
• Share repurchase activity of approximately $100 million.
• Earnings per diluted share of $5.65 to $5.85
• Capital expenditures of approximately $190 million, excluding additional franchise acquisitions or emerging brand investments