Shares of Buffalo Wild Wings plummeted more than 5 percent after the company posted earnings that missed analyst expectations.
The chicken wing chain posted earnings per share of 87 cents on revenue of $494.2 million. Wall Street had expected the company to report $1.27 per share on $514.3 million in revenue, according to Thomson Reuters.
"The challenging restaurant environment continued in the fourth quarter and culminated with a difficult December," Sally Smith, CEO of Buffalo Wild Wings, said in a statement Tuesday.
The company saw same-store sales fall 4 percent in the fourth quarter at its company-owned chains and 3.9 percent at its franchised restaurants. Analysts had anticipated same-store sales to be down 1.7 percent for both company and franchised chains during the quarter, according to FactSet.
Buffalo Wild Wings noted that already slow traffic worsened in December and costs for wings and labor both rose.
Traditional wings, which were on average $1.81 per pound last year, were $1.99 pound in the fourth quarter. The company also noted that cost of labor for the quarter was 31.8 percent of restaurant sales, about 90 basis points higher than fourth quarter 2016.
During a conference call, Buffalo Wild Wings said the chain will begin to better leverage third-party delivery services, as delivery order checks are 30 percent higher than that of takeout orders. Currently, 100 of the company's stores use a third-party delivery service.
The company said that it expects same-store sales growth to be between 1 percent to 2 percent in 2017. It also anticipates that chicken wing inflation will range from 3.5 percent to 4.5 percent during the year.
Buffalo Wild Wings has felt pressure from Marcato Capital Management, which owns a 5.2 percent stake in the company. In October, the wing chain said that it would two of its board members would step down immediately and disclosed three new board members.
On Monday, Marcato nominated four more candidates for the board. Buffalo Wild Wings said that it would evaluate the nominees independently.