Buffalo Wild Wings profit misses; sees comp sales slowing
(Reuters) - Buffalo Wild Wings Inc's (BWLD.O) profit missed analyst estimates as high costs pinched, and the casual dining chain disclosed slowing comparable sales in the beginning of the fourth quarter, sending its shares down 11 percent after market.
Buffalo Wild Wings, which operates more than 850 restaurants in the United States and Canada, said same-store sales for the four weeks ended October 21 were trending at about 3.8 percent at company-owned restaurants compared with 6.6 percent last year.
The company forecast earnings growth of 15 percent for 2012 and said it will continue to raise menu prices to offset high chicken wing costs.
Buffalo Wild Wings has been steadily increasing prices and trying to cut expenses at its restaurants to protect margins as the cost of chicken wings climbs.
The poultry industry has been strained by historically high feed prices as this summer's drought led to a disappointing corn harvest.
Poultry producers have moved production to larger bird, resulting in lower wing per pound yield, pushing up cost per wing by the end of the third quarter 90 percent higher than last year, the company said.
Third-quarter profit fell to $10.7 million, or 57 cents per share, from $11.3 million, or 61 cents per share, a year earlier.
Sales rose 25 percent to $246.9 million.
Analysts on average expected earnings of 60 cents per share on revenue of $253.9 million, according to Thomson Reuters I/B/E/S.
Same-store sales rose 6.2 percent at company-owned restaurants and 5.8 percent at franchised restaurants in the third quarter.
The company expects to open at least 24 new company-owned and 20 new franchised restaurants before the end of the year.
Shares of the Minneapolis, Minnesota-based company fell 11 percent to $74.47 in extended trade after closing at $83.46 on Tuesday on the Nasdaq.
(Reporting by Chris Jonathan Peters and Aditi Shrivastava in Bangalore; Editing by Saumyadeb Chakrabarty and Roshni Menon)