Wingstop Q3: EPS Misses As Chicken Wing Costs Bite, Strong Sales Growth, Aggressive Expansion Plans & More

Wingstop Inc. WING shares are trading lower on Wednesday.

The company reported third-quarter earnings per share of 88 cents, missing the street view of 95 cents. Quarterly sales of $162.498 million beat the analyst consensus estimate of $161.535 million.

Royalty revenue, franchise fees and other increased $21.2 million, of which $9.6 million was due to domestic same store sales growth of 20.9%, and $9.3 million was due to net new franchise development. 

Company-owned restaurant sales rose by $7.4 million, fueled by the addition of 10 net new locations since the previous fiscal third quarter and a 7.3% increase in company-owned domestic same-store sales, primarily driven by higher transaction volumes.

Cost of sales as a percentage of company-owned restaurant sales rose to 77.8% from 73.6% due to higher food and packaging costs, particularly for bone-in chicken wings.

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As of September 28, there were 2,458 Wingstop restaurants system-wide. This included 2,120 restaurants in the United States.

Dividend: The company declared a quarterly dividend of $0.27 per share of common stock, resulting in a total dividend of approximately $7.9 million. This dividend will be paid on December 6

Outlook: The company reaffirmed approximately 20% domestic same-store sales growth for FY24 and updated guidance to 320 – 330 global net new units (previously 285 – 300), $22.5 million in stock-based compensation (up from $20 million), $117.5-$118.5 million in SG&A (previously $114-$116 million), and $19 million in depreciation and amortization (previously $18-$19 million).

Price Action: WING shares are trading lower by 17.7% to $303.69 at last check Wednesday.

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