Buffalo Wild Wings has 21 sauce choices for its wings that run the gamut of heat levels. At one end of the spice spectrum are options like "Teriyaki" and "Honey BBQ," which aren't likely to burn anyone's tongue. But the hottest wing coating available comes with a warning to B-Dubs' customers: "keep away from eyes, pets, and children." The sauce is called "Blazin'."
That term also happens to be a good description of the stock's performance lately. B-Dubs' shares trounced the market in 2014 after doubling the prior year . Buffalo Wild Wings is up an astounding 355% since 2010.
Blazin' indeed.
Today I'm looking at a few ways that the stock could continue its winning streak and end up with strong price appreciation in 2015.
Better store experiences
Image source: Buffalo Wild Wings investor presentation.
A fast-growing store base can help sales keep growing at the 20% pace we've seen over the past few years even with modest revenue gains at existing locations.
Higher profits
Finally, a key reason why B-Dubs' was able to book its incredible 28% profit gain last year was the plunge in chicken wing prices. That swing helped push costs down from 31% of sales a year ago to 29% this past quarter. However, investors can't count on the same tailwind boosting 2015's earnings. Chicken wing prices are heading back up.
But the difference this year is that B-Dubs is in a stronger position to enact menu price changes to offset any rising costs. Chief Operating Officer James Schmidt said as much in a recent conference call with analysts: "We do think we can sustain [customer] traffic pretty well, even with this price increase. I mean, we've seen some very strong same-store sales, our guest satisfaction, our guest loyalty index is high right now."
In November the company implemented an average 3% menu price boost, which should help keep profits marching higher this year toward a targeted 18% earnings growth to roughly $5 per share. If comps hold up in the fourth quarter through that price increase, as management expects, then shareholders can have more confidence that B-Dubs will book yet another year of strong profit growth in 2015.
1 great stock to buy for 2015 and beyond
2015 is shaping up to be another great year for stocks. But if you want to make sure that 2015 is your best investing year ever, you need to know where to start. That's why The Motley Fool's chief investment officer just published a brand-new research report that reveals his top stock for the year ahead. To get the full story on this year's stock -- completely free -- simply click here .
The article 3 Reasons Buffalo Wild Wings Can Keep Soaring in 2015 originally appeared on Fool.com.
Demitrios Kalogeropoulos owns shares of Buffalo Wild Wings. The Motley Fool recommends Buffalo Wild Wings. The Motley Fool owns shares of Buffalo Wild Wings. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
