Buffalo Wild Wings, Inc. (NASDAQ: BWLD)
On Wednesday Buffalo Wild Wings gave a good example of the instability in the current equity markets. After the market closed BWLD reported sales and profits for the fourth quarter that came in below both the company’s projections and analyst’s consensus estimates. Adding to the dour news, the company lowered guidance for fiscal 2016. During the most recent few months the market has been very harsh to stocks that miss earnings or guide lower. But not on Thursday. Instead traders rallied BWLD up 8% on five times average volume.
Even though forecasts and estimates were missed, BWLD is growing at an impressive pace. Fourth quarter revenue increased 20% year over year from $409 to $490 million, while earnings climbed 24% from $20.3 million to $25.3 million. Going forward the company still expects 2016 earnings growth to $5.95 – $6.20 per share, a 20% to 35% increase over 2015. There is dissent among analyst, but many seem to place trust in BWLD’s long-term plan and see the recent misses as both a forecasting error and a transformative event. Zacks
Buffalo Wild Wings CEO Comments
Sally Smith, President and Chief Executive Officer, commented, “Our 2015 same-store sales increased 4.2% at company-owned restaurants and 2.5% at franchised locations. Same-store sales growth in the fourth quarter of 1.9% at company-owned restaurants and 0.1% at franchised locations did not meet our expectations, although they continued to outpace the casual dining industry. The Buffalo Wild Wings brand is strong and vibrant and we continue to invest to drive sales and deliver earnings growth for our shareholders. With our ongoing unit growth and operational diligence, our earnings per share goal for 2016 is $5.95 to $6.20, representing 20% to 25% growth over fiscal 2015.” Yahoo Finance
BWLD Technical Analysis
BWLD hit all-time highs of $205.83 during 2015 but closed the year down 11% at $159.65. For the past seven quarters BWLD opened a big gap on earnings reports and kept that gap open at least until the next quarter. There was not a gap on Thursday but the stock could be in play for days. On a bullish move the first level of resistance is Thursday’s high near $155. Next is the 50-day moving average at $156.07, then $157.26 and $158.90. If the market remains strong there is more resistance near $160, and a move beyond that could see $165.90. On the other hand if the market does continue to sell, BWLD has plenty of price action near $154 and $153. Below those levels on volume or market weakness could move the stock toward recent lows near $140.
Buffalo Wild Wings Company Profile
Buffalo Wild Wings, Inc. is an owner, operator, and franchisor of restaurants featuring a variety of menu items, including its Buffalo, New York-style chicken wings. The Company operates Buffalo Wild Wings and Emerging brands (PizzaRev and Rusty Taco) restaurants, as well as selling Buffalo Wild Wings and Rusty Taco restaurant franchises. It offers a variety of sauces and seasonings, which include Sweet BBQ, Teriyaki, Mild, Medium, Honey BBQ, Spicy Garlic, Buffalo, Desert Heat, Chipotle BBQ, Lemon Pepper and Salt & Vinegar, among others. Its menu includes a variety of food items, including Sharables, Wild Flatbreads, specialty hamburgers and sandwiches, wraps, Buffalito soft tacos and salads. Its restaurants offer domestic and imported beers on tap, including craft brews and a selection of bottled beers, wines, and liquor. It owned and operated approximately 490 company-owned restaurants. Google Finance