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Nothing seems to stop Wingstop Inc. (WING - Free Report) from hitting new highs. This Zacks Rank #1 (Strong Buy) has outperformed the S&P 500 again in 2023, gaining 87.4% year-to-date compared to the S&P's 24.5%.
Wingstop operates and franchises more than 2,050 Wingstop restaurant locations worldwide. It offers classic and boneless wings, tenders and chicken sandwiches, which are cooked to order and hand sauced-and-tossed in 11 different flavors.
It also has signature sides including fresh-cut, seasoned fries and ranch and bleu cheese dips.
Another Beat in the Fiscal Q3 of 2023
On Nov 1, 2023, Wingstop reported its fiscal third quarter 2023 results and beat on the Zacks Consensus for the 6th consecutive quarter. Earnings were $0.69 versus the consensus of just $0.52, for a $0.17 beat.
Domestic same-store-sales, a key metric in the restaurant industry, rose 15.3% year-over-year primarily due to transaction growth.
System-wide sales increased 26.5% to $885 million.
Wingstop saw a benefit as the cost of bone-in chicken wings fell 13.5% compared to the year ago quarter.
"We are measuring record levels in brand health metrics, demonstrating the underlying momentum at Wingstop, and putting us on a path to deliver our 20th consecutive year of domestic same-store sales growth," said Michael Skipworth, President and CEO.
Accelerated Share Repurchases Done in the Third Quarter
The board had previously approved a share repurchase program with authorization to purchase up to $250 million of the outstanding shares. Pursuant to that program, Wingstop also entered into an accelerated share repurchase agreement (the "ASR Agreement") to repurchase $125 million of its common stock.
During the fiscal third quarter, Wingstop made the initial payment of $125 million and retired 567,151 shares of its common stock under the ASR Agreement. This represented about 75% of the total shares expected to be delivered under the ASR agreement.
The delivery of the remaining shares is expected to take place in the fiscal fourth quarter of 2023. But as of Sep 30, 2023, the company had a total remaining authorized amount for share repurchases under the program of about $125 million.
Wingstop Raised Same-Store-Sales Guidance for the Full Year
Wingstop said it continued to see momentum in its business. It raised domestic same-store-sales growth to approximately 16% from its previous guidance of 10% to 12%. That's a dramatic increase to close out the year.
The analysts are bullish about earnings for the full year too. 10 estimates were revised higher in the last 2 months, with one being revised just this week.
The F2023 Zacks Consensus Estimate has jumped to $2.40 from $2.20 over the last 60 days. That's earnings growth of 29.7% as Wingstop only made $1.85 last year.
They are bullish about next year too. 10 estimates have been revised higher in the last 60 days, including one this week, for fiscal 2024 as well. The Zacks Consensus has jumped to $2.84 from $2.56 in that time, up another 18.2%.
Shares Are At New Highs
Shares of Wingstop had been red hot during the initial first year of the pandemic, when everyone was stuck at home and ordering takeout. But those days are long over, yet Wingstop's shares continue to move higher.
Not only is it a big winner this year, but over the last 5 years, Wingstop is easily beating both the S&P 500 and the Invesco QQQ ETF, with a 5-year gain of 299%.
Image Source: Zacks Investment Research
I'm not going to lie. The shares are not cheap. Wingstop trades with a forward P/E of 109 and has a PEG ratio of 5.0. A PEG ratio under 1.0 usually indicates a company has both growth and value.
But clearly, growth investors are seeing something they like in Wingstop as they keep piling in.
In addition to the share repurchase program, Wingstop also pays a dividend, currently yielding 0.3%.
For investors looking for a red-hot restaurant stock with rising earnings estimates, Wingstop should be on your short list.
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Bull of the Day: Wingstop (WING)
Nothing seems to stop Wingstop Inc. (WING - Free Report) from hitting new highs. This Zacks Rank #1 (Strong Buy) has outperformed the S&P 500 again in 2023, gaining 87.4% year-to-date compared to the S&P's 24.5%.
Wingstop operates and franchises more than 2,050 Wingstop restaurant locations worldwide. It offers classic and boneless wings, tenders and chicken sandwiches, which are cooked to order and hand sauced-and-tossed in 11 different flavors.
It also has signature sides including fresh-cut, seasoned fries and ranch and bleu cheese dips.
Another Beat in the Fiscal Q3 of 2023
On Nov 1, 2023, Wingstop reported its fiscal third quarter 2023 results and beat on the Zacks Consensus for the 6th consecutive quarter. Earnings were $0.69 versus the consensus of just $0.52, for a $0.17 beat.
Domestic same-store-sales, a key metric in the restaurant industry, rose 15.3% year-over-year primarily due to transaction growth.
System-wide sales increased 26.5% to $885 million.
Wingstop saw a benefit as the cost of bone-in chicken wings fell 13.5% compared to the year ago quarter.
"We are measuring record levels in brand health metrics, demonstrating the underlying momentum at Wingstop, and putting us on a path to deliver our 20th consecutive year of domestic same-store sales growth," said Michael Skipworth, President and CEO.
Accelerated Share Repurchases Done in the Third Quarter
The board had previously approved a share repurchase program with authorization to purchase up to $250 million of the outstanding shares. Pursuant to that program, Wingstop also entered into an accelerated share repurchase agreement (the "ASR Agreement") to repurchase $125 million of its common stock.
During the fiscal third quarter, Wingstop made the initial payment of $125 million and retired 567,151 shares of its common stock under the ASR Agreement. This represented about 75% of the total shares expected to be delivered under the ASR agreement.
The delivery of the remaining shares is expected to take place in the fiscal fourth quarter of 2023. But as of Sep 30, 2023, the company had a total remaining authorized amount for share repurchases under the program of about $125 million.
Wingstop Raised Same-Store-Sales Guidance for the Full Year
Wingstop said it continued to see momentum in its business. It raised domestic same-store-sales growth to approximately 16% from its previous guidance of 10% to 12%. That's a dramatic increase to close out the year.
The analysts are bullish about earnings for the full year too. 10 estimates were revised higher in the last 2 months, with one being revised just this week.
The F2023 Zacks Consensus Estimate has jumped to $2.40 from $2.20 over the last 60 days. That's earnings growth of 29.7% as Wingstop only made $1.85 last year.
They are bullish about next year too. 10 estimates have been revised higher in the last 60 days, including one this week, for fiscal 2024 as well. The Zacks Consensus has jumped to $2.84 from $2.56 in that time, up another 18.2%.
Shares Are At New Highs
Shares of Wingstop had been red hot during the initial first year of the pandemic, when everyone was stuck at home and ordering takeout. But those days are long over, yet Wingstop's shares continue to move higher.
Not only is it a big winner this year, but over the last 5 years, Wingstop is easily beating both the S&P 500 and the Invesco QQQ ETF, with a 5-year gain of 299%.
Image Source: Zacks Investment Research
I'm not going to lie. The shares are not cheap. Wingstop trades with a forward P/E of 109 and has a PEG ratio of 5.0. A PEG ratio under 1.0 usually indicates a company has both growth and value.
But clearly, growth investors are seeing something they like in Wingstop as they keep piling in.
In addition to the share repurchase program, Wingstop also pays a dividend, currently yielding 0.3%.
For investors looking for a red-hot restaurant stock with rising earnings estimates, Wingstop should be on your short list.