“Cost of sales and labor as a percentage of restaurant sales were higher compared to the prior year and, with the additional depreciation, amortization and other expenses related to the recently completed franchisee acquisition, our earnings per diluted share decreased year-over-year to $1”, Buffalo Wild Wings CEO Sally Smith said in a statement.
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The comparable stores sales at company-owned restaurants increased by a mere 3.9%, while the same stores sales at franchisee-owned restaurants rose by 1.2%.
The headline numbersQuarterly revenue rose 22% year over year to $455.5 million, including a 3.6% increase in franchise and royalty fees to $23.8 million, and a 23.2% increase in sales from company-owned restaurants to $431.8 million. But in after-hours trading, Wild Wings’ shares were down about 15 percent.
To their credit, Buffalo Wild Wings did offer a light at the end of the tunnel with a preliminary look at 2016.
The company lowered its earnings growth goal, saying it’s now anticipating single digit earnings growth for the year.
On the basis of the business’s expansion plans and operational initiatives, company believes that in 2016 it will be able to achieve profits more than 20%. He found the guidance puzzling because NXP Semi is “an excellent company” that operates in growth markets like the Internet of Things, vehicle connectivity and mobile devices, most- notably in Apple (AAPL – Get Report) products.
Sporting events, especially football games, drive much of Buffalo Wild Wings sales, as sports fans flock to locations to watch the game or order out for home viewing parties. Twinem also elaborated “I think we are just entering our guidance for 2016 in a cautious mode based on where our same-store sales are to-date, and obviously we’ve heard comments in the industry overall”.
At present, Buffalo Wild Wings has around 1,140 stores and within these outlets, the restaurant is trying to bring technology, including tabletop tablets and handheld server ordering system.
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The article Why Buffalo Wild Wings Stock Dropped Today originally appeared on Fool.com. The Motley Fool has a disclosure policy.
