Wingstop Stock Falls On Slow Same-Store Sales Growth In Q2; Raises Quarterly Dividend By 21%

Wingstop Inc WING reported second-quarter FY21 sales growth of 11.9% year-on-year, to $74 million, beating the analyst consensus estimate of $73.13 million.
System-wide sales increased 15.8% Y/Y to $589.7 million. Domestic restaurant average unit volume (AUV) rose 14.3% to $1.6 million.
Domestic same-store sales grew 2.1%, versus 31.9% growth last year. Company-owned domestic same-store sales growth was negative (3.1)%, versus 24.7% growth in the prior year.
Digital sales rose to 64.5% of sales, versus 63.7% in Q2 FY20.
Selling, general and administrative expenses rose 20.1% to $16.1 million, while Advertising expenses increased 14% to $23.3 million.
The operating margin was 25.5%, and operating income for the quarter fell 3.2% to $18.9 million.
Wingstop opened 45 net new restaurants during the quarter, an increase of 13.1%.
Adjusted EBITDA rose 9.5% Y/Y to $22.9 million.
The company held $48.2 million in cash and equivalents as of June 26, 2021.
EPS of $0.38 beat the analyst consensus of $0.33.
"Despite the challenging commodity environment, we had another record quarter for development and have now opened more than 200 restaurants during the last 12 months, highlighting our brand partners' continued excitement to grow with our brand," said Chairman and CEO Charlie Morrison.
The company's Board approved a 21% increase in the quarterly dividend from $0.14 to $0.17 per share of common stock, payable on September 3, 2021, to stockholders of record as of August 13, 2021.
Outlook: Wingstop sees FY21 unit growth of 12%+. It expects adjusted SG&A of $55.2 million - $56.6 million and SG&A of $64.8 million - $66.8 million.
Price action: WING shares are trading lower by 4.20% at $162.96 on the last check Wednesday.

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