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Buffalo Wild Wings CEO Sally Smith on the impact on the company of the costs of chicken wings.
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Well investors flocked out of Buffalo Wild Wings the stock company reported earnings that missed estimates.
As record high chicken wing costs continue to weigh on results -- -- they did well with the revenues but the costs were so high.
Cannot company prove to investors it has the recipe it needs to whether these high prices.
With us now -- -- first on Fox Business interview Sally Smith buffalo wildly CEO and president good to see you -- they get I'd like to stress your profits were up 22%.
It's just that these chicken wing prices continued to rise.
Let's get guidance right away for 2013 on what you continue to see chicken wing prices -- as much as they did last year.
Well thanks -- for having me as we look at 2013.
We set out our earnings call that we can expect to to.
Achieve earnings growth of about 25%.
On a 52 week like basis over this past year.
We're already starting to see chicken wings moderates.
Over that just -- super -- They're down now of close to twenty sounds.
In just the last seven -- days so.
2012 certainly some some of the highest when prices we've ever seen.
I think what exacerbates -- in 2011 when prices were some of the lowest we've ever seen in we -- very pleased with our with our revenue growth and we really dead leverage on all almost all other items.
All other lines on our.
But for cost of sales so.
We were able to mitigate the impact of the high chicken wing prices.
Not only -- high chicken wing prices but also the larger winds and so a loss in yield.
By that high revenue growth I don't know I think we've got -- -- -- let's put that out add to the winds have gotten larger.
Because chicken companies are feeding their chickens that making -- So it seems a little complicated but the -- bigger chickens because of the feed costs -- that way.
You've got a bigger weighing in so single wing is if you're doing that to the -- -- ten it's it's more of a wait they're so so how do you then figure that out so that your bottom line number.
Sally comes in matching what analysts really hope it does.
Sure is we look at 2013 I think -- We're right on track for what we said last year that we could do and 20:13 -- I think there's a couple of things around the men you know and it's always taking a look at re engineering the menu.
We have a test out right now in for thirty years we've sold wins by the -- -- 61218.
We've got a test in about 6065.
Of our markets.
Testing -- by a portion size so because the winds have gotten larger.
Targeting a certain ounce per serving.
And and be able to provide the guest with that rather than account.
Coming -- -- ever got smaller we want to make sure that that guests to still get in that great value as well.
We now know so much about chicken wings and -- want to know how Super -- what because the Super -- numbers were not included in this last quarter's numbers how to do.
We had a great -- -- We serve over eight and a half million -- -- Super Bowl Sunday alone.
Both in restaurant and take out and on a year over year basis our sales -- Super Bowl Sunday.
We're somewhere in the 7%.
Increase and concert sales over prior -- -- People are still coming to us for really great wins -- that that.
Probably is -- part of the reason I think the -- -- bank and Barclays have both raised their price targets in fact Barclays on -- doesn't overweight rating for you.
This is obviously a company where analysts love to believe that it's going to do well I think the disappointment of three quarters of -- EPS.
That they get a little anxious so.
Can you say that you will expect higher profits and therefore you can figure -- the cost -- -- already saying that chicken wing prices -- by about as you -- twenty cents in the past couple of days.
And about the past week or so almost twenty cents and you know just as rapidly as they rose -- 2012 they could fall just as rapidly as they did in 2011.
Certainly there's you know we tried it.
Focus on the things we can control and we have some great fundamentals so operationally very -- on.
We have a strong menu we're in the process of of re modeling and unveiling a whole new.
Restaurant design great getting great feedback on that so as long as revenue stays strong and and our that's our goal is to drive revenue over.
We can control other things on the income statement let's just put this into perspective while the stock is down 10% year over year.
Over the past five years this stock is up 223%.
Sally thanks very much for coming first on Fox Business.
List thank you so much for the opportunity any time Sally Smith is the CEO of buffalo wildly actually.
