College Kids love good food, that one think is well known. Among the options, Buffalo Wild Wings Inc. is a perennial favorite with this demographic, and one way it is pursuing to turn around its struggling business is expanded delivery service. Now you can have your wings delivered to your home or dorm if you don’t feel like making a trip to the restaurant!
Recognizing a shift in consumer behavior, Buffalo Wild Wings BWLD, -3.69% Chief Executive Sally Smith said on the company’s Wednesday earnings call that it’s ramping up delivery at its company-owned locations.
“Delivery is an addressable opportunity for Buffalo Wild Wings as more consumers are eating at home. You’re really seeing a decline on in-restaurant traffic in the casual dining restaurants, the whole restaurant industry. You’re seeing a shift from in-restaurant dining to take-out & delivery, and that drop has been more severe than we were anticipating in the industry as we came into the year.
In the most recent quarter, the company saw sales during the March Madness college basketball tournament slip, which company executives attributed to increased competition and more home viewing of the games. The company focused on take-out and delivery in order to claim some of those sales.
Third-party delivery from 180 locations added $2.7 million in company-owned sales for the first quarter. The company aims to have delivery in 250 company-owned restaurants by year’s end. It’s also looking to add delivery to local apps and websites in order to cut down on third-party-provider commissions, and exploring ways to increase profitability, including the addition of beverages, where possible. Buffalo Wild Wings serves beer and other alcoholic drinks.
Buffalo Wild Wings reported overall sales of $534.8 million for the first quarter, up from $508.3 million last year, but below the $536.0 million FactSet consensus. Same-store sales at company-owned restaurants were up 0.5%. With that, adjusted earnings were $1.44 per share, also below the consensus of $1.66 per share.
Trading at $156, BWLD seems to be trying to change things to earn your money as an investor. Has it worked?