April 27, 2010 / 8:44 PM / 9 years ago

UPDATE 2-Buffalo Wild Wings gives weak April comp sales

* Q1 EPS $0.58 vs est $0.57

* Revenue trails estimates

* Sees softness in April same-store sales

* Shares plunge 21 pct in extended trade (Adds analyst comments, conference call details)

BANGALORE, April 27 (Reuters) - Buffalo Wild Wings Inc’s BWLD.O quarterly profit edged past analysts’ estimates, but the restaurant operator said it experienced softness in April same-store sales, sending its shares down 21 percent. The company said same-store sales at company-owned restaurants fell 3.7 percent and 2.4 percent at franchised locations for April.

On a conference call with analysts, Chief Executive Sally Smith said lower alcohol sales in April hurt same-store sales, as competitors aggressively discounted to woo more customers.

“While we believe that our previously announced net earnings growth goal for 2010 of 20 percent may be achievable, improvement in same-store sales and moderate wing costs are key to meeting this goal,” CEO Smith said.

Nobody expected a negative same-store sales for April and this could send out signals that the company might not hit its earnings outlook for 2010, KeyBanc Capital Markets analyst Brad Ludington said.

Ludington said that second-quarter would very likely be weaker than expected. CEO Smith added the company has identified about a dozen restaurants that were not meeting sales expectations and the locations would have focused attention going ahead.

The company, however, said lower year-over-year chicken wing prices would have a positive impact on restaurant-level profitability in the second quarter. For the first quarter, the Minneapolis-based sports-themed restaurant chain earned $10.6 million, or 58 cents a share, compared with $8.5 million, or 47 cents a share, a year ago.

Analysts on average were expecting earnings of 57 cents a share, according to Thomson Reuters I/B/E/S.

Revenue surged nearly 16 percent to $152.3 million, but fell short of analysts’ consensus view of $154.4 million.

Same-store sales rose 0.1 percent at company-owned restaurants and 0.7 percent at franchised restaurants in the first quarter.

“Earnings quality could be a concern as sales were soft in the quarter and operating expenses came in higher than expected,” RBC Capital Markets analyst Larry Miller wrote in a note.

Total costs rose 15 percent to $136.4 million in the quarter.

Buffalo Wild Wings shares fell $10.62 to $40.32 in trading after the bell. They closed at $51.01 Tuesday on Nasdaq. (Reporting by Renju Jose in Bangalore; Editing by Gopakumar Warrier)

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