Buffalo Wild Wings' Management Taking A Long, Hard Look At The Company After A Trying Year

Deutsche Bank reiterated its Hold rating on Buffalo Wild Wings BWLD after the restaurant operator ended a tough 2016 on soft note as fourth quarter comps declined about 4 percent across its company- and franchise-operated units.

The brokerage was “astonished” with 2017 outlook, which is roughly in-line with its prior guidance as the company’s 2017 model calls for EPS of $5.60 - $6.00 versus the pre- 4Q16 2016 forecast was for EPS of “slightly below” $5.65 - $5.85.

“With softer sales trends, higher labor expenses, ongoing operational issues and its incremental investments planned for 2017, we continue to question when and how meaningful its recovery will be near-term,” analyst Brett Levy wrote in a note.

Levy says the company may adopt a more capital focused approach with slower company-unit growth, revisiting its portfolio and its ownership mix.

However, the analyst said several factors, including sales initiatives and corporate investments, that may weigh on earnings outlook beyond still a slower-than-hoped-for same-store sales range of +1-2 percent.

“With a sluggish macro-environment, ongoing SSS declines, margin pressure and strategic uncertainty, we are maintaining our Hold rating,” Levy added.

At last check, shares of Buffalo Wild Wings rose 2.57 percent to $153.65. Levy has a price target of $155.