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Wingstop Stock Drops 20% as Costs Weigh on Q3 Profits

#Wingstop #Stock #Drops #Costs #Weigh #Profits

Key takeaways

  • Wingstop shares hit their lowest level since February on Wednesday after the chain’s third-quarter profit fell short of estimates.
  • Same-store sales also grew at a slower pace than expected, while Wingstop also raised its estimates for opening new locations this year.
  • The chicken wing chain raised its expense forecasts for the full fiscal year. Chicken wing prices and payroll expenses rose in the third quarter.

Wingstop (WING) shares fell Wednesday after the chicken wing chain’s third-quarter earnings fell short of analysts’ estimates.

The company reported revenue of $162.5 million on sales of $1.2 billion across its network of nearly 2,500 locations (those are system-wide sales, which include sales from both company-owned and franchise restaurants.) The revenue figure beat estimates Analysts – compiled by Visible Alpha – fell by nearly $2 million, while sales fell by about $20 million.

Wingstop reported net income of $25.7 million, below analysts’ expectations of $28.2 million. The company’s costs increased during the quarter due to higher chicken wing prices, higher salaries and stock-based compensation expenses.

Wingstop shares fell nearly 20% in recent trading, falling to their lowest level since February.

For the full fiscal year, Wingstop raised its expense forecast by a few million dollars. It also raised its expected range for net new restaurant openings to between 320 and 330, up from 285 to 300 previously, after opening a record 106 new locations in the third quarter.

Domestic store sales grew just under 21% year over year, slightly below analysts’ expectations for growth of 21.6%.

#Wingstop #Stock #Drops #Costs #Weigh #Profits

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