Market Overview

B-Dubs Comment On Marcato Letter Calling For CEO Resignation

Share:
B-Dubs Comment On Marcato Letter Calling For CEO Resignation
Related BWLD
What You Need To Know Ahead Of B-Dubs' Shareholder Meeting Showdown
Why Buffalo Wild Wings Doesn't Need Marcato Capital To Succeed

Activist investor Marcato Capital Management sent Buffalo Wild Wings (NASDAQ: BWLD) soaring Thursday after urging shareholders to oust CEO Sally Smith.

The Situation

"[U]nder current management, shares of Buffalo Wild Wings' common stock [has] underperformed virtually every relevant benchmark on a 1-year, 3-year, and 5-year basis," Marcato founder Mick McGuire wrote in a press release. "Despite declining same-store sales, lackluster margins, a deteriorating guest experience and poor capital deployment decisions, management continues to fight tooth-and-nail to maintain the status quo."

McGuire added that the status quo is “unacceptable” and merits Smith’s replacement.

Marcato owns a 6.1 percent stake in the company, and the two entities have been engaged in a hostile battle since August 2016, when the investor called for management turnover and adjustments to operational focus, drivers, accountability and capital allocation.

Buffalo Wild Wings peaked 3.9 percent on the news and were trading up 2.7 percent at the time of publication.

Buffalo Wild Wings' Response

Upon Benzinga reaching out, the wings restaurant issued the following statement:

    "Over the past decade, Buffalo Wild Wings' performance has consistently led the casual dining industry, delivering superior results to our shareholders while providing a differentiated guest experience to our customers. Under CEO Sally Smith's leadership since its IPO in 2003, the Company has generated total returns for shareholders of 1,697 percent. In fact, $10,000 invested in Buffalo Wild Wings stock at the IPO was worth more than $175,000 on March 31, 2017. The Company has continued to innovate and pursue cost savings initiatives amid difficult market conditions for the sector and remains focused on creating sustainable value for our shareholders."

Related Links:

Buffalo Wild Wings On Thin Ice With Some Investors After An Ugly Finish To 2016

Marcato Comments On Buffalo Wild Wings Retention Of The Cypress Group

Latest Ratings for BWLD

DateFirmActionFromTo
May 2017Maxim GroupUpgradesHoldBuy
May 2017Deutsche BankUpgradesHoldBuy
Apr 2017BairdDowngradesOutperformNeutral

View More Analyst Ratings for BWLD
View the Latest Analyst Ratings

Posted-In: Analyst Color News Restaurants Management Exclusives Analyst Ratings Tech Interview Best of Benzinga

 

Related Articles (BWLD)

View Comments and Join the Discussion!