Transcript for Buffalo Wild Wings Not Hot Enough
It's. Everyone I'm down Cutler -- new York and as a financial markets to a close on Wall Street where this Wednesday July 30 -- -- story stock. And once stuck with -- story today Buffalo Wild Wings apparently the wings of the restaurant chain. Not hot enough at least not for investors shares from Buffalo Wild Wings falling sharply today sort -- explain why. -- until -- -- -- joins us on this so might what went wrong here. You know it's not so much anything that has really gone wrong in terms of how the company has performed I think one of the issues is that that the expectations were very very high. From Buffalo Wild Wings coming into this report the stock was at an all time high added more than doubled is about 130%. In the prior year. Coming into the news so while the the actual earnings were better than expected. Probably not by a wide enough margin. If you really -- Wall Street these prices and also the company did somewhat temper its outlook for profits for the remainder of the year. Basically saying that -- still gonna grow very strong -- 12530%. Problem is the published. Forecasts by Wall Street analysts were looking for something closer to 35%. Earnings growth so that's basically the -- I say OK and then this is the result of that -- -- -- to date chart -- outlooks that numbers that we see here. Yes and the stock obviously -- the report was before the start of of trading. Actually last night down some 13% of what this means -- this one -- move down in the stock has sort of essentially made all the gains year to date evaporate for Buffalo Wild Wings which really has become. Our favorite consumer play -- growth stock investors out there it doesn't mean this growth stories over at all but I do you think that people got way too aggressive. In bidding up the stock heading into the numbers now we have a gut check now it's a matter. You know does Wall Street ultimately by this -- -- say the long term growth story still looks good. How does it look comparable to some of the other restaurant chains that are out there as far as shares -- What's -- -- -- is that the overall casual restaurant chain. Sector has been a pretty lousy performer as a matter of fact if you look at -- you know companies like. Darden and Brinker they've actually had a tough time in the last let's say year year and a half. Because -- -- Everett rebounded nicely off the recession to think couldn't really sustain. Much growth -- very little pricing power. Buffalo Wild Wings is one of a huge standouts in that respect. As being a very positive performer -- they're growing very rapidly from their roots in the midwest they've really had this great national advertising. I think branding franchise which basically says this is the place to come watch a game. And they've really capitalized on that whole. That whole motif. And so they along with politics -- pole and a couple of other ones have really been the exceptions. On the upside down that sort of stand out from a generally -- casual restaurant business. Well speaking of that would this be considered a seasonal stock knowing that spot that we've got football season right around the corner and we look at those advertisers those commercials there. And there's football plastered all over the place so clearly there is a game association there is an event association with this particular. It and by the way I should point out that one of the reasons expectations were so high coming into this report is that -- Buffalo wild -- is a great beneficiary of people watching a lot of World Cup soccer. And in fact the company said and added one percentage point to its sales. In that period which is a really big number so obviously people are expecting it they got it here's the problem with saying okay they've college and pro football season's coming up won't that be great news. -- -- -- Problem is we all know that right I mean it's no secret when the games are so secret that this happens every year so that already kinda gets incorporated into the forecasts and everybody so it's a matter of not just is are things going to be better after this summer it's are things going to be better than we already expect him to get. After the summer and that sort of remains to be seen I don't think there's really a way. To handicap that right now. I do know that you know any time people have said you know what maybe football mania has -- they've been wrong so who knows maybe in fact. They will get a little more momentum going into the fall. Well -- perhaps it's always that root for the home team mentality of there's always next year and so that's why they keep that from what. You that you bring up just -- -- and -- that you bring up the World Cup again and it really especially because obviously with rotating through every four years. To see how something like that can still have this kind of an impact. Yeah and it really this is new in the United States right -- -- -- obviously has been the world game forever in the cop has been tremendous everywhere but the fact. That this Minneapolis based company who concentrated in the midwest actually had. You know their profit need to -- a lot by the fact before gathering in public. To drink -- and watch soccer games was was something I don't think you could've really bad on a couple of years ago it. There instincts say we'll have to wait and see how buffalo while it's gonna play out -- going into. Policies and -- and took -- -- of finance Mike thank you have a wet Saturday at banks that. You watch a story stock you stay with abcnews.com. Latest headlines I'm -- -- New York.
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