Did Buffalo Wild Wings Management Restore Confidence?

Following an advisor call on Buffalo Wild Wings BWLD Monday, Wedbush’s Nick Setyan mentioned that there was a feeling that the company’s “value proposition has been lost, particularly on value days.”

Setyan continued, "While BWLD’s quality is much better, there is a sense this was not highlighted in the messaging, eroding the value proposition.”

The analyst maintains a Neutral rating on the company, with a price target of $150.

Value Proposition

Setyan believes Buffalo Wild Wings would need to return to lost “value proposition” in order to recapture traffic, given that the company’s historical record of sustaining transaction growth could to a large extent be attributed to its unique experience and value proposition.

The advisor stated that from a marketing perspective, the company might need to refocus on the sports aspect of the experience to a greater degree, since Buffalo Wild Wings is likely to have ignored this in trying to highlight different food options.

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

Strategic Improvements

“Testing, analyzing and implementing various strategic initiatives has been haphazard at times, in the opinion of our advisor. While the company has improved over the past ~5 years, there remains a sense that the company retains a “small-company” mentality that is lacking the structured corporate processes often found in larger companies,” Setyan went on to say.

Although there has been some improvement in recent years, the analyst believes better tools and a formalized structure more suited to a $3 billion market cap would be helpful.

Operational Improvement

“A refocus on operations in particular, especially when done by or in conjunction with franchisees, was something that rang true with most employees internally, our advisor believes. Increased franchisee ownership could also allow management to focus more closely on strategy, initiative implementation, and operational improvement,” Setyan noted.

Finally, the advisor suggested that bringing lower performer more in line with the rest of the system to drive operational improvement was possibly the biggest opportunity for the company in the near term.