Having words with Sally Smith: President and Chief Executive, Buffalo Wild Wings

Nation's Restaurant News, June 9, 2008 by Carolyn Walkup

Sally Smith, who has served as president and chief executive of Buffalo Wild Wings for nearly 12 ears, reports that 2008 is off to a strong start, despite an economic downturn wreaking havoc with the financial results of many other casual-dining chains. The 507-unit chain reported earnings for the first quarter ended March 30 rose 16 percent and same-store sales were up 4.1 percent at company-owned restaurants and 2.1 percent at franchised ones.

Smith is even more bullish about the rest of the year, noting that the casual sports-theme restaurant is ahead of its development pace for last year and that it is expected to achieve its annual 15-percent growth target and eventually to increase net income by 25 percent. The Minneapolis-based company, which has locations in 37 states, is now more than halfway toward its goal of having more than 1,000 restaurants across the country by 2012.

Smith, a certified public accountant, began her career with KPMG LLP, an international accounting and auditing firm. After that, she was chief financial officer of Dahlberg Inc., a maker and franchisor of hearing aids, from 1983 to 1994. She then moved to Buffalo Wild Wings as chief financial officer.

The company, which Smith led through its successful initial public offering in November 2003, now has no debt and is able to self-finance its future growth. It launched its first national advertising campaign in 2006 and celebrates 26 years in business this year.

Why do Buffalo Wild Wings' same-store sales continue to grow at a time when many other chains' in all segments are not?

We think we are a value, especially when the economy is weaker. Our guest comes in for the experience in addition to the food. There is still room for wings and beer, even in a weaker economy.

How are you dealing with rising commodity costs?

We have contracts through the end of this year, so we should be OK. Menu price increases should cover most of them; we've had no negative reaction from customers.

Wing prices are fluctuating, but we have seen that cost fall.

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Are your expansion plans, which have been steady, still on track?

We will open about 75 restaurants this year, with 15 expected to open in the second quarter, and about 50 of them will be franchised. This is ahead of our development pace of 2007 and on track to achieve our annual 15-percent unit growth target. Our goal is to open 75 to 80 a year for the next four or five years. Our new stores, open three to six months, have been very strong.

Are you still attracting interest from new franchisees?

Franchising picks up any time there is an economic downturn because they can control their own destiny. We are seeing much greater interest. Our national TV exposure has helped to get publicity to franchisees.

What kind of marketing message will Buffalo Wild Wings emphasize going forward?

Our local-store marketing will treat every day as game day, even if there is no game. I think we have some opportunities to drive business at lunch. Evenings and late-night are our strongest dayparts.

FAST FACTS

AGE: 50

EDUCATION: bachelor's degree in business administration and accounting, University of North Dakota

HOMETOWN: Edina, Minn.

HOBBLES: travel

PERSONAL: married; two children