Basketball courts aren’t the only place for action when the NCAA championships begin later this month. Buffalo Wild Wings Inc. and Domino’s Pizza Inc. are among companies that could ride the fan frenzy that accompanies this annual three-week spring sports obsession.
Shares of Buffalo Wild Wings have outpaced the Standard & Poor’s 500 Index by an average of 5.8 percentage points each March in the past 10 years. The Minneapolis-based chain, which has a sponsorship partnership with the National Collegiate Athletic Association, led the broader market by almost 2 percentage points last March.
That’s helped make this “standout stock” a tournament powerhouse, said Chris Bertelsen, chief investment officer of Global Financial Private Capital LLC, a Sarasota, Fla.-based wealth manager with $4.5 billion in assets.
Buffalo Wild Wings is “poised for continued growth” heading into a historically “dynamite” period, he said, adding that his company has owned the stock for about two years.
The sports-themed restaurants are buoyed by “great momentum going into the tournament” Sally Smith, chief executive officer, said in a telephone interview. The company has its own goal: to beat last year’s chicken wings sales of about 94 million during March Madness. Even after a 3 percent menu price increase in November, same-restaurant sales are up year-to-date and managers will keep daily tabs on traffic and sales trends throughout the three-week event, she added.
Many locations will be at capacity for the tournament games that begin March 19, with some fans even lining up an hour in advance, Smith said. “During those first four days of March Madness, the matchups are almost immaterial because people just love college basketball.”
Fans at home also could boost sales for Domino’s, said David Yucius, portfolio manager at New York-based Lebenthal Asset Management, who helps oversee more than $1 billion in assets. Shares of the Ann Arbor, Mich.-based company are “doing really well,” outpacing the S&P 500 by 7.7 percentage points year-to-date, even as results for other publicly traded restaurants have been “spotty” in recent months.
This stock hasn’t been as consistent a March performer as Buffalo Wild Wings – it’s posted average relative gains of 2.2 percentage points in March the last 10 years, but trailed the market by 3.3 percentage points last March. Yucius and his colleagues bought it about a year ago because the company has invested heavily in technology to make it easier to order food online or via mobile applications, he said.
While other businesses could see a tournament-related boost – beer makers and apparel manufacturers come to mind – bars and restaurants tend to dominate attention, Bertelsen said.
That seems justified as retail sales for food service and drinking places have risen an average of 5.1 percent in March from the same month the year before going back to 2000, according to figures from the Commerce Department. That compares with average gains of 4.8 percent during the remaining 11 months of the year.