Restaurant chain Buffalo Wild Wings Inc. (BWLD), Monday reported a drop in profit for the first quarter, on increased expenses due primarily to the high price of chicken wings and escalating labor costs.
Revenues for the quarter grew 21 percent, on strong same-store sales growth. Earnings for the quarter missed analysts' estimates, but revenues trumped Wall Street expectations.
The Minnesota-based owner of Buffalo Wild Wings Grill & Bar restaurants reported first-quarter profit of $16.3 million or $0.87 per share, down from $18.2 million or $0.98 per share last year. On average, 21 analysts polled by Thomson Reuters expected earnings of $0.99 per share for the quarter. Analysts' estimates typically exclude special items.
Profit for the quarter was weighed down by higher expenses, with total costs and expenses rising to $282.4 million from $224.3 million a year agp.
Chief Executive Sally Smith said, "We continued investing capital and labor for our future success, even though we faced the challenge of high wing costs and fluctuating wing yields."
"We're excited about our Guest Experience business model as it further enhances our brand and we've seen this strategy build incremental sales. In the first quarter, this model incurred higher labor costs than we had last year when it was not in place," Smith added.
Total revenue for the first quarter rose 21.2 percent to $304.4 million from $251.1 million last year. Analysts, on a consensus, expected revenues of $302.96 million for the quarter.
Same-store sales, or sales from stores open at least a year, increased 1.4 percent at company-owned restaurants and 2.2 percent at franchised restaurants.
BWLD closed Monday's trading at $94.33, down $0.72 or 0.76%, on the Nasdaq. The stock gained $0.55 or 0.58% in after-hours trade.
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