| SAN FRANCISCO
SAN FRANCISCO Feb 8 Buffalo Wild Wings'
shares rose on Wednesday as some investors bet that its
dismal quarterly results have strengthened the hand of an
activist hedge fund in a proxy fight aimed at turning around the
struggling restaurant chain.
Hedge fund manager Mick McGuire this week nominated himself
and three other people to serve on the board of the company,
which late on Tuesday reported quarterly earnings and sales
significantly below analysts' expectations.
Hurt by rising wages and higher chicken wings prices, the
restaurant chain's earnings per share have missed analysts'
average expectations in six of the past eight quarters.
Lackluster interest in watching professional sports may also
be hurting sports bars and restaurants, with ratings for the
National Football League's most recent season down 9 percent.
Several analysts lowered their price targets and future
earnings estimates for Buffalo Wild Wings following the report,
and its stock opened 5 percent lower on Wednesday. But it
quickly rebounded and traded up 2 percent at $152.80 at mid-day.
McGuire's San Francisco-based hedge fund owns about 5.2
percent of Buffalo Wild's shares and has asked for management to
overhaul how it allocates capital and add people with relevant
restaurant and finance experience to its management and board
Maxim Group analyst Stephen Anderson cut his price target
for Buffalo Wild Wings to $145 from $155, and he said he would
have cut it further, if not for McGuire's fight for seats on the
"It's only four people on a nine-person board. So even if
everyone were to gain a seat on the board, it would not
constitute a majority. But they could exercise some outsized
influence," Anderson said.
Turning more of the eatery's restaurants over to franchisees
is a central component of McGuire's plan for change at Buffalo
Wild Wings and instrumental in his statement that the company's
share price could triple if a number of changes were made.
The stock is down about 1 percent in 2017, compared with the
S&P 500's 2-percent rise.
(Reporting by Noel Randewich; Editing by Marguerita Choy)