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What’s Really Driving Buffalo Wild Wings’ Revenues?

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Overall revenue growth

To get an idea of how Buffalo Wild Wings’ (BWLD) business is doing, we’ll consider the company’s revenue over the past five years. From 2011 to 2015, the company’s revenues increased from $784 million to $1.8 billion—a rise of over 131%.

Specifically, BWLD, which forms 0.2% of the holdings of the iShares Core S&P Mid-Cap ETF (IJH), derives its revenue from company-operated restaurant sales and royalties collected from franchise-operated restaurant sales. In company-owned restaurants, the company itself is responsible for the day-to-day operations of the restaurants, bears all the costs involved in operations, and gets all the revenue generated by the restaurant.

What's Really Driving Buffalo Wild Wings' Revenues?

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Company-owned restaurants’ revenue growth

In 2011, the contribution of revenue from BWLD’s company-owned restaurants was 91.4%. But this rose to 94.6% in 2015. Between 2011 and 2015, the company-owned restaurant unit count grew from 319 to 590—an increase of 277 units. This led to an increase in revenue from company-owned restaurants sales, from $717 million in 2011 to $1.7 billion in 2015—an increase of over 139%.

By improving the customer experience at restaurants and by introducing new menu items, BWLD was able to achieve positive same-store sales growth over the past five years, which has also contributed to the higher revenues generated from this segment.

During the same period, BWLD peers Texas Roadhouse (TXRH), Chili’s Grill & Bar of Brinker International (EAT), and Outback Steakhouse of Bloomin’ Brands (BLMN) have registered revenue growths of 62.9%, 11.6%, and 6.2%, respectively, from company-owned restaurants.

In the next part, we’ll analyze unit growth from BWLD’s franchised restaurants.

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