UPDATE 2-Buffalo Wild Wings Q2 profit beats Street; shares rise
(Adds analyst and CEO comments, updates share movement)
By Dilipp S Nag
BANGALORE, July 29 (Reuters) - Restaurant operator Buffalo Wild Wings Inc (BWLD.O) posted a 46 percent rise in quarterly profit, beating market estimates, and said it was confident of achieving its targets for 2008, sending its shares up 13 percent.
Several initiatives like stores remodeling and marketing the company has taken appeared to be working and boosting sales, Morgan Keegan & Co Inc analyst Destin Tompkins said by phone.
The operator of Buffalo Wild Wings Grill and Bar restaurants earned $5.6 million, or 31 cents per share, for the second quarter ended June 29. It reported a profit of $3.8 million, or 22 cents per share, last year.
Total revenue rose 29 percent to $97.9 million, said the company, which competes with Red Robin Gourmet Burgers Inc (RRGB.O) and CBRL Group Inc (CBRL.O).
Analysts on average expected a profit of 27 cents per share, before exceptional items, on revenue of $94.5 million, for the quarter, according to Reuters Estimates.
Same-store sales increased 8.3 percent at company-owned restaurants and 4.5 percent at franchised restaurants. Buffalo Wild currently operates 521 restaurants in 37 states.
Average weekly sales for company-owned restaurants rose 10.7 percent to $40,572 for the second quarter, while franchised restaurants averaged $46,390, up 5.4 percent from the year-ago period.
"(Chicken) wing prices remained relatively low during the quarter and at least to date, have not increased. So, they continued to be favorable for the company," Tompkins said.
Tompkins, who has an "outperform" rating on the stock, said he does not own any shares in Buffalo Wild Wings.
For 2008, the Minneapolis-based company said it was confident of achieving its targets of net earnings growth of 25 percent, revenue growth of 20 percent, and unit growth of 15 percent.
"Same-store sales continue to be strong in July, with increases of over 6 percent at company-owned and over 2 percent at franchised restaurants," Chief Executive Officer Sally Smith said in a statement.
Shares of the company were up at $35 in trading after the bell, after closing at $31.04 Tuesday on Nasdaq. They have gained more than 65 percent since touching their 52-week low of $18.25 in January. (Editing by Deepak Kannan)
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