Investing.com — Wingstop Inc. reported third-quarter earnings that fell short of analyst expectations on Wednesday, sending shares tumbling 15.7% despite robust sales growth and restaurant expansion.
The chicken wing chain posted adjusted earnings per share of $0.88, missing the consensus estimate of $0.96. Revenue rose 38.8% year-over-year to $162.5 million, surpassing analyst projections of $160.23 million.
Wingstop (NASDAQ:)’s domestic same-store sales rose 20.9% in Q3, driven primarily by transaction growth. The company opened a record 106 net new restaurants during the quarter, bringing its total store count to 2,458 – a 17.1% increase from the prior year.
“Our third quarter results demonstrated the staying power of our multi-year strategies we are executing against,” said CEO Michael Skipworth in a statement. He highlighted the “excitement among our Brand Partners who are seeing industry-leading returns.”
Despite the strong top-line performance, higher costs weighed on profitability. Cost of sales as a percentage of company-owned restaurant sales increased to 77.8% from 73.6% a year ago, driven mainly by higher bone-in chicken wing prices.
The company maintained its full-year guidance for approximately 20% domestic same-store sales growth. It also raised its outlook for new restaurant openings to 320-330 units, up from its 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.