Buffalo Wild Wings BWLD has a lot on its plate. In the latest edition of Deutsche Bank’s Bull-Bear debate note, analyst Brett Levy discussed the challenges B-Dubs faces moving past its tumultuous June 2 annual shareholder meeting.
The analyst rates Buffalo Wild Wings a Buy with a $180 price target.
At the meeting, activist investor Marcato Capital Management succeeded in getting its recommended directors on the board and began seriously pushing for strategic reforms.
CEO Sally Smith also announced that she will step down by the end of 2017.
Related Link: For a recap of the Buffalo Wild Wings-Marcato Proxy War, click here.
The shakeup leaves the door wide open for change at the company, and the 13.2-percent decline in share price since the meeting indicates that much work is still needed to turn investor sentiment positive.
That said, Levy noted that over half of investors hold a neutral outlook, with several feeling bullish and only one considered bearish.
The obvious focus of the debate was over the question, “Who will lead the company?” A replacement for Smith still has to be found, and the company will also have to consider making other executive moves.
The company will also need to seriously rework its in-store operations to see positive momentum return to same-store sales and margins, which are down hundreds of basis points over the past few years.
Expectations for changes include cost cutting measures and greater technology integration. Of major significance though is Marcato’s push to develop a re-franchising model that will find common growth between the company operations and franchisee community.
In the near term, investors are primarily looking for management to provide guidance updates and progress on the search for a new CEO.
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