Everyone likes a deal when they go out to eat: two-for-one appetizers or half-price drinks can be sources of exuberance for restaurant frequenters. But with casual dining restaurant stocks plummeting this year on recession fears, happy hour has now extended itself into the stock market, especially in the case of Buffalo Wild Wings Inc. (Nasdaq: BWLD) and BJ’s Restaurants Inc. (Nasdaq: BJRI). The two franchises are at bargain prices and have fundamentally strong restaurant concepts, consistent track records, good balance sheets and cash flow, and above-average long-term growth outlooks.   

Buffalo Wild Wings was founded in 1982 and went public in 2003. The chain consists of nearly 500 casual dining restaurants operating in 37 states, with a menu that is competitively priced and positions the company between the fast food and casual dining segments. Aside from wings, the menu offers chicken tenders, shrimp, hamburgers and other sandwiches, wraps, tacos, appetizers and salads. Beers from local and/or regional micro-breweries are available on-tap at its restaurants as well as bottled beer, wine and liquor. Each Buffalo Wild Wings restaurant is designed to include an extensive multi-media system, a full bar and an open layout. Customers can choose from counter service, dining table service or carry-out. 

Buffalo Wild Wings achieved its stated 2007 performance goals that included 15% unit growth, 20% revenue growth and 25% net income growth. At year-end 2007, the company was operating 493 locations, up from 429 locations one year earlier.

Buffalo Wild Wings’ revenues grew 21% year-over-year in 2007 to $330 million from $278 million and per-share earnings increased 30% year-over-year to $1.10 from $0.92. The 2007 revenue and income gains discussed above are comparables based on two 52-week periods; in actuality, FY 2006 was 53 weeks long whereas FY 2007 had 52 weeks. 

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