Friday, June 02, 2006

Holy macro

Handicapping a restaurant stock involves far more these days than merely understanding unit economics, if a recent analysis of Buffalo Wild Wings Inc. is any indication. In the widely reported assessment, Keystone Capital Markets stockpicker Conrad Lyon noted that the chicken-wing chain’s share price had slipped about 10% during May because of investors’ concerns about avian flu and gas prices. But Lyon is more than a little bullish on the stock, in large degree because of LeBron James and his winning teammates on the Cleveland Cavaliers. The NBA squad played 13 post-season games before it was eliminated by the Detroit Pistons in the playoffs, as opposed to none last year, and almost a fourth of Buffalo Wild Wings’ units are located in Ohio, where the concept was founded. Ergo, more time spent eating the chain’s chicken wings during games, and perhaps more celebrating in the outlets afterward, yielding what Lyon forecasts as a 1 to 2-cent earnings increase for the company’s second quarter.

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