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How Saucy Will Buffalo Wild Wings Q4 Earnings Be?


The "Wings. Beer. Sports." chain is expecting 20% net earnings growth in 2014.

Investors will get a look at how the public's appetite for beer and wings during the early part of football season impacted Buffalo Wild Wings (NASDAQ:BWLD) today, as the company weighs in with its fourth-quarter earnings.

Shares of the Minneapolis-headquartered chicken-wing chain have soared more than 83%over the past year, with the company continuing to expand throughout North America and enjoying lower chicken-wing prices, compared to this time one year ago.

According to the US Department of Agriculture's Agricultural Marketing Service, wholesale chicken wings in the Northeast are currently priced just at over $1.33 per pound, compared to more than $2.00 per pound in January 2013.

Mid-year, the company announced that it had begun selling wings by the portion, rather than providing a fixed number on every plate. This move, said the company, was expected to improve cost of sales percentage when combined with the lower wing costs.

Indeed, last quarter, Buffalo Wild Wings reported a 27.9% jump in revenue and 66.9% growth in net earnings, thanks in part to a lower cost per pound for traditional chicken wings and the lowest cost of sales percentage since late 2011.

The chicken-wing chain has already weighed in with numbers from the first four weeks of Q4, reporting that same-store sales reached 5.3% at company-owned restaurants and 3% at franchised locations, compared to 3.8% and 5.6% for the same period last year. The company said it was expecting to achieve 20% net earnings growth for 2013, or 28% on a 52-week basis.

Analysts are reportedly expecting earnings per share for the full Q4 to come in at $1.06 on average, up from $0.89 in the same quarter last year.

For 2014, Buffalo Wild Wings is forecasting 20% net earnings growth, as a result of "planned unit growth and ongoing operational diligence," President and Chief Executive Officer Sally Smith said in a statement.

This year has already proved to be eventful for the "Wings. Beer. Sports." chain, as it announced the opening of its 1,000th restaurant -- in Mexico -- last month. Ultimately, the company says it is aiming for 1,700 locations in the US and Canada within the next decade, and has announced plans to expand internationally through franchising -- in Mexico as well as in the Philippines and the Middle East.

The company also outlined plans for new technology in its restaurants last quarter; tabletop tablets will be rolled out in company stores throughout 2014, for example. While the initial rollout will provide customers with the chance to play games like trivia and poker, company COO James Schmidt said in last quarter's earnings conference call that the chain plans to add features like a music app and ultimately the ability to order and pay at the table.

What can we expect from Q1 demand in general? We know sports fans reportedly gobbled up an estimated 1.25 billion wings during last weekend's Super Bowl, according to the National Chicken Council's 2014 Wing Report, and as many as 75% of those consumers choose to get their wings from a food service outlet.

Twitter: @helenbnichols
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