Wingstop Inc. Reports Q3 Earnings Shortfall

Wingstop Inc. reported third-quarter earnings that fell short of analyst expectations on Wednesday, causing shares to drop 15.7%, despite robust sales growth and restaurant expansion.

The chicken wing chain posted adjusted earnings per share (EPS) of $0.88, missing the consensus estimate of $0.96. Revenue increased by 38.8% year-over-year to $162.5 million, surpassing analyst projections of $160.23 million.

Wingstop (NASDAQ: WING) experienced a 20.9% increase in domestic same-store sales in Q3, driven primarily by transaction growth. The company opened a record 106 net new restaurants during the quarter, raising the total store count to 2,458, marking a 17.1% increase from the previous year.

CEO Michael Skipworth stated, “Our third quarter results demonstrated the staying power of our multi-year strategies we are executing against,” highlighting the excitement among Brand Partners witnessing industry-leading returns.

Despite robust performance, increased costs impacted profitability. The cost of sales as a percentage of company-owned restaurant sales rose to 77.8% from 73.6% a year ago, primarily due to higher bone-in chicken wing prices.

The company maintained its full-year guidance for approximately 20% domestic same-store sales growth and raised its outlook for new restaurant openings to 320-330 units, up from the previous forecast of 285-300.

Wingstop declared a quarterly dividend of $0.27 per share, payable on December 6 to shareholders of record as of November 15.