- Buffalo Wild Wings won big after swapping traditional wings for boneless wings.
- Chicken wing costs have increased substantially over the past year.
- Buffalo Wild Wings’ new boneless wings deal was able to drive traffic to the chain without cutting into profit margins.
Investing in boneless chicken wings is paying off for Buffalo Wild Wings.
On Wednesday, the company reported earnings per share in the third quarter reached $US1.36, crushing analysts’ estimate of $US0.79. Sales at stores open for at least one year fell by 2.3% at company-owned restaurants.
Buffalo Wild Wings shares soared nearly 22% in extended trading, after the company raised its forecast for full-year earnings.
One major reason for Buffalo Wild Wing’s newfound optimism is the chain’s switch to boneless wings.
“The recent Tuesday promotion shift from traditional to boneless wings at company-owned restaurants will continue to improve cost of sales while traditional wing prices remain elevated,” CEO Sally Smith said in a statement.
In September, Buffalo Wild Wings cancelled its popular Tuesday wings deal in favour of a boneless wings “buy-one, get-one” offer.
Customers’ love for half-priced wings had been hurting Buffalo Wild Wings because of “historically high” wing costs. Chicken wings cost $US2.16 per pound on average in the third quarter. One year ago, the average cost was $US1.72.
While the wings deal boosted same-store sales, using traditional wings cut into restaurants’ margins.
Basically, while the deal was bringing in customers, it was costing restaurants too much money. Now that the chain has switched to boneless wings, the deal has the power to attract customers without cutting into Buffalo Wild Wings’ bottom line.
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