Wingstop (WING) delivered a mixed bag of financial results for the third quarter, leaving investors with a combination of positive and negative takeaways. While the company’s revenue exceeded analyst expectations, earnings per share fell short of the anticipated mark.
For the quarter, Wingstop reported earnings per share of 88 cents, missing the Street’s consensus estimate of 95 cents. However, the company’s quarterly sales of $162.498 million surpassed the analyst consensus estimate of $161.535 million. Despite the mixed performance, Wingstop shares climbed by 0.5% on Thursday, closing at $291.38.
In a move aimed at rewarding shareholders, Wingstop declared a quarterly dividend of $0.27 per share of common stock, totaling approximately $7.9 million. This dividend is scheduled to be paid on December 6.
Looking ahead, the company reaffirmed its projection of approximately 20% domestic same-store sales growth for fiscal year 2024. It also updated its guidance, increasing the anticipated global net new unit count to 320-330 from the previous range of 285-300. In addition, the company revised its estimates for stock-based compensation, SG&A expenses, and depreciation and amortization.
Following the earnings announcement, analysts adjusted their price targets for Wingstop. TD Cowen analyst Andrew Charles maintained his Buy rating on the stock but lowered the price target from $450 to $365. Similarly, Stephens & Co. analyst Jim Salera kept an Overweight rating on the stock but lowered the price target from $490 to $468. Barclays analyst Jeffrey Bernstein also maintained an Overweight rating, but cut the price target from $470 to $380.
The mixed earnings results and the subsequent adjustments to price targets highlight the ongoing complexities within the restaurant industry. While Wingstop continues to experience robust revenue growth, its ability to consistently meet earnings expectations remains a point of focus for investors. As the company navigates these challenges, its future performance will likely be a key driver for its stock’s trajectory.
