Buffalo Wild Wings, Inc. (BWLD)
Q1 2009 Earnings Call Transcript
April 28, 2009 at 5:00 pm ET
Mary Twinem - Chief Financial Officer
Sally Smith - President and Chief Executive Officer
Jeff Farmer – Jefferies & Company
Bryan Elliott - Raymond James
Destin Tompkins - Morgan Keegan
David Tarantino - Robert W. Baird
Paul Westra - Cowen & Company
Larry Miller – RBC Capital Markets
Nicole Miller - Piper Jaffray
Brad Levington - KeyBanc Capital Markets
Matt DiFrisco – Oppenheimer & Co.
Will Hamilton - SMH Capital
Greg McKinley - Doherty Company
Previous Statements by BWLD
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This conference is being recorded today, Tuesday, April 28, 2009. I would now like to turn the conference over to Mary Twinem, Chief Financial Officer and Executive Vice President.
Good afternoon and thank you for joining us as we review our first quarter 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 first 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, the number of locations opening during 2009 and beyond, the sales at these and our other company-owned and franchised locations, our ability to successfully operate a new market, the cost of commodities, such as fresh chicken wings, the success of our marketing initiatives, our ability to control restaurant labor, and other restaurant operating costs, 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 first quarter. After that, I will provide further detail on our recent financial performance and comment on trends in the second quarter. Finally, Sally will share some thoughts about the second quarter and the remainder of 2009. We will then answer questions.
So, with that, I will turn things over to Sally.
Good afternoon, everyone. I’m excited to be here today to share the continued strength and momentum of our results. Our outstanding first quarter revenue growth of 35.3% translated to net earnings growth of 30.1% and earnings per diluted share of $0.47, an impressive 30.6% increase.
Our performance demonstrates the stability and strength of the Buffalo Wild Wings brand and the ongoing commitment to exceptional execution by our Franchisees and Team Members. I applaud the entire Buffalo Wild Wings Team. They are thrilled to be part of a winning team and it shows in our results.
The first quarter significantly outpaced our 25% annual revenue goal. And that was over strong revenue growth of first quarter 2008. We have an intense focus on providing our guests with a compelling experience, and our Guest Experience Management program indicates that our guests are rating their experience higher than in prior periods. Loyalty scores increased in the first quarter 2009 over 2008 and we believe this is a leading indicator of future sales performance. A significant factor in our revenue growth is our continued ability to sustain our growth rate moving forward.
Our New Restaurant Opening Team, along with our Development Team, continues to streamline and improve our processes to ensure we’re opening strong and on time. We’ve opened more restaurants earlier in the year, and see ongoing sales growth in our new units as shown in the increase in our average weekly volumes at company-owned and franchised locations.
Our ability to provide a great guest experience is also evident in our first quarter same store sales, which increased 6.4% at company-owned locations and 6.0% at franchised locations compared to last year.
The combination of focusing on key execution fundamentals like hot wings hot and cold beer cold, along with an increased media presence and the launch of our new basketball TV spot that you couldn’t miss during the tournaments, provided a powerful foundation.
And, we added a high-profile sponsorship layer on ESPN TV, Top 30 Basketball Plays of the Past 30 Years that captured the attention of viewers across the country during the college basketball tournaments.
We also continued to build upon the success of key sales opportunities like take out and our signature Boneless Thursday promotion. Buffalo Wild Wings is the perfect place to start the weekend and we reminded our guests of that with our Weekends Start on Thursday promotion.
We’re keeping the experience in our restaurants fresh and new. Our flatbreads, which became part of our core menu in February, along with our signature alcohol-free lemonades, had very strong sales. We also launched three exciting new menu items in the first quarter: Twisted Chicken, Pepperoni Kickers and BBQ Nachos. All three are flavorful, shareable ways to start a meal, and are boosting sales in our appetizer category.