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Buffalo Wild Wings, Inc. (BWLD)
F4Q09 (Qtr End 12/27/09) Earnings Call
February 11, 2010 5:00 pm ET
Mary J. Twinem – Executive Vice President, Chief Financial Officer & Treasurer
Sally J. Smith - President, Chief Executive Officer & Director
Jeff Farmer – Jefferies & Co.
Matthew Difrisco – Oppenheimer & Co.
Bryan Elliott – Raymond James
Dustin Tompkins - Morgan Keegan
Jon Comp – Robert W. Baird
Gregory Mckinley – Dougherty & Company
Stephen Anderson – MKM Partners LLC
Brad Ludington – KeyBanc Capital Market
Mark Smith – Feltl & Company
Joshua Long – Stephens & Co.
Greg Schroeder – Jesup & Lamont
Previous Statements by BWLD
» Buffalo Wild Wings Q3 2009 Earnings Call Transcript
» Buffalo Wild Wings Q2 2009 Earnings Call Transcript
» Buffalo Wild Wings, Inc. Q1 2009 Earnings Call Transcript
I would like to remind everyone that this conference call is being recorded. I will now turn the call over to Mary Twinem, Chief Financial Officer and Executive Vice President of Buffalo Wild Wings. Please go ahead ma'am.
Mary J. Twinem
Good afternoon and thank you for joining us as we review our 2009 results. I am Mary Twinem, Chief Financial Officer and Executive Vice President of Buffalo Wild Wings. Joining me today is Sally Smith, our President and Chief Executive Officer.
By now, everyone should have access to our fourth quarter earnings release, which went out after the market closed today. If you have not received the release, it is available on the Investor Relations section of our website at buffalowildwings.com. A script of our prepared remarks will also be posted on our website after the call.
Before we get started, I want to remind you that during the course of today’s call, various remarks we make about future expectations, plans, and prospects for the company constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.
Actual results may vary materially from those contained in forward-looking statements based on a number of factors, including without limitation our ability to achieve and manage our planned expansions, the number of locations opening during 2010 and beyond, the sales at these and our other company-owned and franchised locations, our ability to successfully operate in new markets, unforeseen obstacles in developing sites, the costs of commodities, such as chicken wings, the success of our marketing initiative, our ability to control restaurant labor and other restaurant operating costs, economic conditions, including changes in consumer preferences or consumer discretionary spending, and other factors disclosed from time-to-time in our filings with the U.S. Securities and Exchange Commission.
On today's call, Sally will provide an overview of the fourth quarter and full year 2009. After that, I will provide further detail on our recent financial performance and comment on trends in 2010. Finally, Sally will share some additional thoughts about the current year. We will then answer questions.
So with that, I’ll turn things over to Sally.
Sally J. Smith
Good afternoon, everyone. The fourth quarter capped off another successful year that exceeded all of our annual growth goals. Our fast-paced unit growth continued to position us as a leader in the industry as we built on our established success in existing markets, and opened our second airport location. Our 2009 expansion exceeded our 15% growth goal with 92 additional locations and we entered four new states, to give us a presence in 42 states.
Our restaurant team members maintained remained dedicated to creating a unique and exciting game day experience that continues to bring Guests to our restaurants. Our 2009 revenue increase of nearly 28% is testimony to those efforts. The ongoing training and refinement of systems devoted to product management, including our theoretical cost system, along with our labor management program, are validated by impressive annual net earnings of over 25%. Thank you to the entire Buffalo Wild Wings Team for your continued passion for our brand and dedication throughout the year to deliver these great results.
We are pleased with our fourth quarter results, which achieved strong top-line performance as revenue increased 20%, impacted by solid operations and same-store sales that countered the negative trends of our category. Net earnings growth increased 7.9% for the quarter, yet didn’t hamper our ability to exceed our annual net earnings goal even though we experienced a quarterly increase in insurance costs and stock compensation expense. Earnings per diluted share are $0.46 for the quarter.
Our unique You Have to Be Here TM dining experience continued to draw Guests and produce strong year-over-year sales results. Our ability to consistently provide our Guests with great food and a fun dining experience was evident in our fourth quarter same-store sales, which increased 2.6% at company-owned restaurants and 2% at franchised locations. Our multi-layered marketing strategy proved to be successful during the football season. We had a strong start with our fantasy football draft program, which married the in-restaurant draft party experience with a season-long fantasy PR campaign, and was augmented with an exclusive Football Challenge promotion and our Secret Agent website feature that extended the theme of our TV commercials. All were unique and engaging programs that enhanced the Buffalo Wild Wings brand experience.
Coupled with our increased TV presence in NFL and college football games, and our unique media integrations, we reminded hundreds of millions of sports fans that Buffalo Wild Wings is the best place to enjoy the football action. We continued to provide our Guests with new and flavorful menu options to enhance their dining experience.
In the fourth quarter, our limited time offer menu featured three new Flatbread Flips with steak chicken or Barbecue pork that saw strong results, and a tasty new dessert, Sweet Cinnamon Bites. We offset much of the impact of high wing prices with strong sales of other products with more favorable margins and realized improvements in numerous product costs through the diligence of our Purchasing group.