Sales disappoint during the key Super Bowl quarter.
Shares of Buffalo Wild Wings tumbled more than 12% on Tuesday afternoon after the restaurant chain reported disappointing quarterly results. Executives said they hoped to improve the chain’s performance by placing bigger bets on lunch and upcoming soccer tournaments.
A lot of the weakness in Buffalo Wild Wings’ bwld share price can be attributed to missing expectations. Total revenue for the first quarter actually jumped 15% to $508.3 million, while net earnings grew to $1.73 per share from $1.52 a year earlier. But Wall Street wanted more, calling for $530.8 million in revenue and $1.77 in profit.
The softness was partly due to a drop in same-store sales, down 1.7% at company-owned restaurants and falling 2.4% at franchised restaurants. Those declines were also worse than what analysts, surveyed by Consensus Metrix, had anticipated. Executives told analysts during a conference call that the weakness was broad, not pointing to any particular region or problematic menu initiative.
“We are focusing on sales-driving initiatives to regain momentum in 2016,” President and CEO Sally Smith said.
To strengthen results for later this year, Smith outlined a few key targeted plans. They include:
- A greater focus on soccer. “B-Dubs” is already closely associated with America’s most beloved sport–football–but the chain sees an opportunity to lure in diners interested in soccer too. It touted a few key high-profile tournaments, including the UEFA Champions League (which is underway) and the 2016 UEFA European Championship and the 2016 Centennial Copa America, both starting in June.
- Betting bigger on lunch. Buffalo Wild Wings acknowledged that price-sensitive customers are shifting away from casual dining and looking more toward fast-casual, delivery, and takeout options. To help address that shift, the wing-focused chain is focusing more on how it can best serve the lunch crowd. That’s always been a weakness for the chain: as Fortune has reported, only one out of every five meals sold at Buffalo Wild Wings occurs during lunch, and that’s when fast-casual is strongest.
- The promotion of “Wing Tuesday.” Buffalo Wild Wings is testing a few options this June, but hasn’t yet committed to a full strategy on how to implement that program. The hope is that they’ll have a clear advertising and promotional strategy in place in time for the football season.
Looking ahead, Buffalo Wild Wings projected per-share earnings for 2016 of $5.65 to $5.85 given recent sales trends and an increasing outlook for the cost of traditional chicken wings. Wall Street had projected a $6.10 profit for 2016.