Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of wing-slinging restaurant Buffalo Wild Wings (NAS: BWLD) were ice cold today, falling as much as 13% in intraday trading after the company announced second-quarter results.
So what: It's earnings season ,and that means that any company unfortunate enough to miss earnings expectations is bound to see its stock take a drubbing. And that's exactly what happened to Buffalo Wild Wings. Revenue for the second quarter increased 30% from last year, hitting $239 million. Earnings per share, meanwhile, clocked in at $0.62, up from $0.58 last year. Analysts, however, had been looking for per-share profit of $0.68 on revenue of $240 million.
Now what: Forget the rain: Blame it on the chicken wings. Prices for chicken wings -- not surprisingly a key input cost for B-Wild -- rose drastically from last year, putting pressure on the company's bottom line. Buffalo Wild Wings has tried to pass some of the costs through to customers with price increases, but that's a tough proposition when consumers aren't exactly feeling happy-go-lucky.
The good news here is that B-Wild's quarter showed that it's still a successful, growing restaurant chain despite the economy and its significant chicken challenges. On the other hand, unless the economy or chicken wing prices (or both) turn around soon, the headwinds could continue and may put more pressure on the stock.
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The article Why Buffalo Wild Wings' Shares Cooled Off originally appeared on Fool.com.
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