:max_bytes(150000):strip_icc()/GettyImages-1252558051-3a35d9c888d04599bbfff9707678169a.jpg "Wingstop Stock Drops 20% as Costs Weigh on Q3 Profits")
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Key Takeaways
- Wingstop shares hit their lowest point since February on Wednesday after the chain’s third-quarter profits fell short of estimates.
- Same store sales also grew at a slower pace than expected, while Wingstop also lifted its estimate for new location openings this year.
- The chicken wing chain lifted its projections for expenses for the full fiscal year. Chicken wing prices and payroll expenses rose in the third quarter.
Wingstop (WING) shares tumbled Wednesday after the chicken-wing chain’s third-quarter profits fell short of analyst estimates.
The company reported $162.5 million in revenue on $1.2 billion in sales across its network of nearly 2,500 locations (Those sales are system-wide, which includes sales from both company-owned and franchised restaurants.) The revenue figure surpassed analyst estimates—compiled by Visible Alpha—by nearly $2 million, while sales fell about $20 million short.
Wingstop posted $25.7 million in net income, below the $28.2 million analysts had expected. The company’s costs climbed during the quarter because of higher chicken wing prices and higher payroll and stock-based compensation expenses.
Wingstop shares were down nearly 20% in recent trading, sliding to their lowest point since February.
For the full fiscal year, Wingstop lifted its projections for expenses by a few million dollars. It also lifted its expected range of 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 same store sales grew by just under 21% year-over-year, a bit below the 21.6% growth analysts had expected.