Chicken Wing Algorithm Pays Off At Buffalo Wild Wings (BWLD)
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Price: $156.95 --0%
Rating Summary:
7 Buy, 23 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 9 | New: 21
Rating Summary:
7 Buy, 23 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 9 | New: 21
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A first glance, pricing a plate of chicken wings is pretty straightforward business. However, when you get down to the nuts and bolts of it, and when you consider the size of the wing, not just the number of wings, the situation becomes more complicated. Restaurant chain Buffalo Wild Wings (Nasdaq: BWLD) is attempting to manage chicken wing prices by adjusting prices based on wing size, as opposed to simply looking at wing count.
"BWLD is currently testing a new ordering system for wings that is based on portion sizes ("snack", "meal", "platter") vs. specific wing counts (6, 12, 18). We conducted some checks to get a sense of the early customer reaction to the new wing ordering system," said Deutsch Bank analyst Jason West.
West said most stores in test markets reported no complaints or push-back from customers. Additionally, most store expect the changes to be permanent, and all stores were tracking at or above plan on sales for the quarter.
"If the new ordering system works, it could be a powerful tool to help manage wing costs and could drive some upside to our 2013 estimates given the incremental margin on wings. Separately, our analysis of the wing market suggests wholesale wing prices are more likely to come down rather than go up again next yr," concluded West.
Deutsche Bank has a Buy rating on Buffalo Wild Wings, Inc. (NASDAQ: BWLD) with a price target of $85.00.
For an analyst ratings summary and ratings history on Buffalo Wild Wings, Inc. click here. For more ratings news on Buffalo Wild Wings, Inc. click here.
Shares of Buffalo Wild Wings, Inc. closed at $72.73 yesterday.
"BWLD is currently testing a new ordering system for wings that is based on portion sizes ("snack", "meal", "platter") vs. specific wing counts (6, 12, 18). We conducted some checks to get a sense of the early customer reaction to the new wing ordering system," said Deutsch Bank analyst Jason West.
West said most stores in test markets reported no complaints or push-back from customers. Additionally, most store expect the changes to be permanent, and all stores were tracking at or above plan on sales for the quarter.
"If the new ordering system works, it could be a powerful tool to help manage wing costs and could drive some upside to our 2013 estimates given the incremental margin on wings. Separately, our analysis of the wing market suggests wholesale wing prices are more likely to come down rather than go up again next yr," concluded West.
Deutsche Bank has a Buy rating on Buffalo Wild Wings, Inc. (NASDAQ: BWLD) with a price target of $85.00.
For an analyst ratings summary and ratings history on Buffalo Wild Wings, Inc. click here. For more ratings news on Buffalo Wild Wings, Inc. click here.
Shares of Buffalo Wild Wings, Inc. closed at $72.73 yesterday.
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