B-Dubs' Boardroom Brouhaha: What To Do With The Stock Now?

Buffalo Wild Wings BWLD CEO Sally Smith has announced her retirement following the company’s unsuccessful proxy battle with hostile activist investor Marcato Capital, which saw the firm take three board seats.

Analyst's Take Of Management Shakeup

With Smith set to retire by the end of 2017, Baird Equity Research suspects any changes in strategic direction that Marcato desperately opted for will take time to gain traction.

Smith, who has served as CEO since 1996, also withdrew her candidacy for election to the board of directors. It was up until 2015, when Buffalo Wild Wings started to face some internal and external headwinds, that Marcato Capital, which holds a 9.9 percent stake in the company, began calling for her removal.

Baird analyst David E. Tarantino believes changes in strategic direction at Buffalo Wild Wings could led the company toward a potential move to a more highly franchised model, which was previous proposed by Marcato.

The company currently operates 1,250 restaurants, with 616 being franchised locations. The board realignment could significantly shift those numbers.

“While we are optimistic that fresh perspective from new leadership could lead to some positive change over time, we hesitate to assume the path to value creation for BWLD will be straightforward, as efforts to transform the business model and strengthen core operating fundamentals could take time to gain traction,” said Tarantino.

Baird Equity Research maintains a Neutral rating and a $160 price target on the company.

Shares of Buffalo Wild Wings sank over 5 percent in early trading Monday.

Related Links:

What You Need To Know Ahead Of B-Dubs' Shareholder Meeting Showdown