Purchase Intent Data Shows Buffalo Wild Wings Could Be In Trouble

The following was originally published on Likefolio.

Shares of Buffalo Wild Wings BWLD have been under stress for the past week and are in danger of falling dramatically, as data gathered from social media indicates sharp declines in customers for the wing-based restaurant.

At LikeFolio, we track every Twitter mention of Buffalo Wild Wings (including many of its slang references) and look for mentions that indicate the person is actually eating in the restaurant or ordering food from BWLD.

Less Customers, And Less Customer Happiness

Here’s what purchase intent mentions for Buffalo Wild Wings look like over the past 5 years:

As you can see from the green line above, purchase intent mentions for BWLD tend to be predictive of stock movement for the company 2-5 months in advance.

Currently, we are seeing BWLD coming off of their worst start to a calendar year since 2012. Making matters worse, purchase intent mentions are at all-time lows.

In addition, Consumer Happiness levels have dropped several points, to all time lows, over the past 6 months. This is generally a leading indicator of customer visits to restaurants, which means the worst may be ahead for BWLD. It is also a predictor that customers are beginning to prefer other experiences like ordering pizza/wings from Domino's Pizza, Inc.DPZor Yum! Brands, Inc.'s YUM Pizza Hut.

A Bearish Trade

On the LikeFolio Podcast we discussed this with professional trader Nick Fenton, who offered up a very interesting bearish options spread on BWLD that risks $900 with a max profit of $1100 should BWLD stock have the poor performance we think it will.

Summary

Buffalo Wild Wings is in trouble. Social-data metrics suggest a declining customer base that is less happy with their experience. BWLD stock could be in significant trouble here.
LikeFolio monitors social media for shifts in consumer behaviors. The LikeFolio App is a free way to track this research and get alerts when influential people talk about the brands of public companies.

Image Credit: Javcon117, Flickr