Operations

Wingstop delivers on Q3 expectations

provided

October 26, 2022

Wingstop shares were up over 10% Wednesday after the Dallas-based chain posted higher-than-expected financial results for the fiscal third quarter ending Sept. 24. Shares increased to $149.04, from $134.85, according to a MarketWatch report. Still, the stock was down nearly 22%.

"The third quarter results underscore the strength of our long-term growth strategies and the growth levers we have to pull as a brand," CEO and President Michael Skipworth said in a company press release "We delivered 6.9% domestic same store sales growth, with the majority of this growth driven by an increase in transactions, a demonstration of the momentum and underlying health of our business. This translates to 36.2% domestic same store sales growth on a three-year basis.

"We've opened 167 net new restaurants through the third quarter and are on track to have a record year for restaurant development, enabled by significant bone-in wing deflation strengthening our brand partners' unit economics."

Although cost of sales rose to $15.7 million from $15.2 million, they fell to 77.2% from 86.3% as a 43% decrease in the cost of bone-in chicken wings more than offset the increased costs from the chain's opening of eight locations in NYC, Skipworth said during the earnings call.

Highlights included:

• Systemwide sales increased 17.7% to $699.6 million.
• 40 openings.
• Domestic same-store sales increased 6.9%.
• Domestic restaurant AUV of $1.6 million.
• Digital sales made up 62% of sales.
• Total revenue increased 40.9% to $92.7 million.
• Net income increased 18.4% to $13.4 million, or $0.45 per diluted share, compared to net income of $11.3 million, or $0.38 per diluted share in the prior fiscal third quarter.