Sacked: Buffalo Wild Wings Downgraded After Super Bowl
By: John Melloy
The New England Patriots aren’t the only ones walking away losers after Sunday’s Super Bowl. Buffalo Wild Wings , a restaurant chain that gears a large portion of its marketing toward football and saw its locations packed for the big game last night, is also in for a rough summer, according to Miller Tabak & Co.
Post-football wing withdraw by restaurant goers is not to blame this time, but rather that rising wing costs this year will weigh on margins, the analyst said.
“We downgrade shares of Buffalo Wild Wings to Hold (from Buy) ahead of tomorrow’s 4Q11 earnings report amid our heightened concern about stubbornly high bone-in wing costs,” wrote Stephen Anderson, in a note to clients Monday. “Chicken supplies now are likely to be down for all of 2012, which we now think will lessen any post-Super Bowl downside in wing costs.”
Wing costs have more than doubled from their low last May as the number of so-called chick placements decreased and feed costs increased. Bone-in wings account for a fifth of the restaurant’s costs, according to Miller Tabak.
Buffalo Wild Wings fell Monday following the downgrade, but the shares are still up 46 percent in the last 12 months and are near an all-time high. The stock rose last year after an NFL lockout was avoided and the company expanded its mid-scale sports bar concept around the country.
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