Buffalo Wild Wings(NASDAQ: BWLD) stock rises post takeover bid from Roark Capital Group

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Buffalo Wild Wings (NASDAQ: BWLD) stock surged over 24% on November 14th, 2017 (as of 12:45PM EST; Source: Google finance) post the takeover bid from Roark Capital Group, leading to a total rally of over 42.2% in the last four weeks. Roark made an offer of more than $150 per share while the stock is currently trading at $145.55. Meanwhile, analysts from Wedbush enhanced their price target to $130 as compared to $115.

This news is a major boost for the firm which has been facing pressure in delivering a Company-owned restaurant sales growth. The group forecasted a Same-store sales rise of over -1.5% for 2017.

Analysts believe that Roark could strengthen their company-owned restaurant performance via the acquisition if executed properly. Roark could build a stable base of franchise income

Meanwhile, Buffalo Wild Wings generated a revenue rise of $2.5 million to $496.7 million in the third quarter of 2017 from $494.2 million in pcp. The Company-owned restaurant sales rose 0.5% during the quarter boosted by 21 additional company-owned restaurants. Franchise royalties and fees enhanced 1.0% to $23.7 million during the quarter, boosted by more 31 franchised restaurants.

The Adjusted income from operations reached $32.5 million during the third quarter of 2017, or 6.6% of total revenue, from $34.4 million and 7.0% in the same quarter of 2016. For the year to date period, adjusted income from operations fell to $88.5 million, or 5.8% of total revenue, as compared to $119.6 million and 8.0% in 2016.

Buffalo Wild Wings Net earnings also fell 19.7% to $18.2 million during the third quarter of 2017.

For 2017, the company planned for 14 company-owned Buffalo Wild Wings restaurants in the United States, with 5 in the fourth quarter. They expect 15 franchised Buffalo Wild Wings locations in the United States, with 3 in the fourth quarter and 20 franchised Buffalo Wild Wing locations internationally, with 10 in the fourth quarter

 

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