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Buffalo Wild Wings Falters While Panera Dominates Again

In the latest head-to-head match-up between Panera Bread and Buffalo Wild Wings, the bakery beat the sports bar once again.

The two restaurant chains have now reported quarterly results on the same afternoon for two straight quarters. Panera (PNRA) outperformed Buffalo Wild Wings (BWLD) when the companies reported their first quarter results in late April. And it came out on top again on Tuesday.

Second quarter sales at Panera’s company-owned cafes rose 4.2% on a comparable basis, a metric that indicates a restaurant’s health by excluding any gains from new store openings. That growth was better than a 4.1% estimate.

Meanwhile, total revenue and profit increases for the quarter also exceeded Wall Street’s expectations. Total revenue grew 3% to $698.9 million, slightly better than the $696 million estimate. Net earnings were $1.78 per share, exceeding the $1.74 forecast.

“At a time when other restaurant companies are feeling the impact of a slowing consumer environment, we are maintaining our momentum,” said Panera CEO Ron Shaich. Panera will host a conference call with analysts on Wednesday morning.

While Buffalo Wild Wings reported impressive revenue growth—up 15% to $490.2 million, it was partially offset by a 2.1% drop in same-store sales at companyowned restaurants. Wall Street had projected $498 million in sales and a 0.5% drop in same-store sales. Net earnings, however, totaled $1.27 per share vs. $1.25 projected by analysts.

Chief Executive Sally Smith says same-store sales would also decline in the third quarter before improving in the final three months of the year.

On a conference call with analysts, Buffalo Wild Wings executives were asked what went wrong for the chain, which has now reported two straight quarters of same-store sales weaknesses. It last reported declines in 2010. The issues are so vexing that an activist investor plans to push for changes at Buffalo Wild Wings.

“We feel really good about the brand,” said chief operating officer James Schmidt.

The issue, according to Buffalo Wild Wings, is not so much the core customer—who comes to the chain to watch big sports events and enjoy wings and beers for hours while the game unfolds. Instead, the problem is more about convincing casual guests who aren’t as loyal to the concept to stop by for wings when they have a lot of restaurant options in their neighborhood.

“We feel comfortable if we regain momentum that we will be able to once again outperform the casual dining industry,” said Schmidt.

Panera, meanwhile, has worked hard to stand out from the crowd by promising diners that the chain’s food uses “cleaner” ingredients, a move that it feels makes it more on trend with prevailing trends today as consumers—in particular millennials—want better quality foods. The chain is also likely benefiting from the struggles of close peer Chipotle Mexican Grill (CMG), which has struggled in the wake of a food-safety crisis that started last year.

Investors have picked a winner, as the stocks for both restaurant chains have also flowed in different directions. Over the past year, Panera’s shares have risen 13%, while the Buffalo Wild Wings’ stock slipped 13%. In after-hours trading on Tuesday, Panera’s shares rose about 4%, while Buffalo’s grew 5.3%, as that stock continues to benefit from a jolt in the wake of interest from an activist investor.