Rising food, labor costs the culprits in Buffalo Wild Wings Q2 earnings loss

Net earnings at Buffalo Wild Wings fell by 9.3 percent year over year in the quarter ended June 28, a result of rising food and labor costs, the company said Tuesday.

Although net income slid to $21.5 million, from $23.7 million during the same period last year, Buffalo Wild Wings’ total revenue increased 16 percent during Q2, to $426.4 million. Same-store sales saw a boost as well, increasing 4.2 percent at company-owned restaurants and 2.5 percent at franchised locations.

The sales gains made in Q2 were tempered by a “challenging cost environment,” Buffalo Wild Wings CEO Sally Smith said in a statement. Operational costs were particularly impacted by a 26 percent rise in the per-pound price of traditional chicken wings over last year, rising wage and benefits rates, and the addition of a “Guest Experience Captain” at all company-owned restaurants. 

“Investments in Buffalo Wild Wings, including the Guest Experience Business Model and Stadia restaurant design, further strengthen our brand,” Smith said. “Same-store sales at Buffalo Wild Wings are strong and we have long-term opportunities that will continue to drive restaurant sales and net earnings growth.”

Still, net earnings may see continued declines throughout this fiscal year, she noted, as the company this month finalized an agreement to buy back 41 franchised Buffalo Wild Wings locations in Texas, New Mexico and Hawaii. 

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