Buffalo Wild Wings Slashes Forecast As Q1 Earnings Miss Badly -

Buffalo Wild Wings Slashes Forecast As Q1 Earnings Miss Badly

Apr 26, 2017Jeremy ParkinsonFinance0

Written by StockNews.com

Buffalo Wild Wings (BWLD) Wednesday posted much worse than expected first quarter earnings results and cut its full-year profit outlook, as it looks to cut costs and sell some of its company-owned namesake restaurants.

The Minneapolis-based sports bar operator reported Q1:

earnings per share (EPS) of $1.44, which was $0.23 worse than the Wall Street consensus estimate of $1.67,

revenues rose 5.2% from last year to $534.8 million, also falling short of analysts’ view for $536.1 million.

Looking ahead, BWLD:

cut its full-year outlook. The company now expects 2017 EPS of $5.45 to $5.90, down from $5.60 to $6.00, but still in-line with Wall Street’s current $5.76 estimate,

lowered its comparable sales (“comps”) forecast to +1% from a prior +1 to +2% range,

unveiled a new cost-cutting program, and

plans to sell about 13% of company-owned Buffalo Wild Wings restaurants. It hired the Cypress Group to lead the sale process.

The company commented via press release:

“In order to improve margins and profitability, we’ve undertaken a thorough review of our restaurant operating practices, field organization, and third-party spend with a leading consulting firm who worked with our Team Members and franchisees.

We’ve identified areas to streamline work and improve efficiencies. As a result of these initiatives, we expect to realize $40 to $50 million in cost savings over the next two years.

Our team is focused, on track, and making the strategic changes to improve sales and profitability for the long run.”

Buffalo Wild Wings shares fell $4.40 (-2.71%) in after-hours trading Wednesday. Year-to-date, BWLD had gained 5.18% prior to today’s report, versus a 7.12% rise in the benchmark S&P 500 index during the same period.

BWLD currently has a StockNews.com POWR Rating of B (Buy), and is ranked #28 of 53 stocks in the Restaurants category.