In a May 4th release, Wingstop Inc. (WING) posted financial results for the 1st quarter of fiscal 2022. This specialty QSR Company competes directly with privately held Buffalo Wild Wings and indirectly with national chains offering chicken. The Company experiences the same pressures of increased cost of ingredients, labor and transport as competitors in an environment still restrained by COVID and inflation. In addition, flavored wings are more readily available from supermarkets and in bulk from club stores for home meals and entertaining.
Domestic same-store sales increased by1.2 percent. System-wide sales were up by 12.7% Digital sales remained at 62.3 percent compared to Q1, 2021.
For the 1st Quarter of FY 2021 ending March 26th 2022, net income was $8.68 million on total revenue of $76.2 million. Comparable figures for the 1st quarter of fiscal 2021 ending March 27th 2021 were net income of $13.2 million on total revenue of $70.7 million. EPS fell from $0.44 for the 1st quarter of fiscal 2021 to $0.29 for the most recent quarter.
The Company provided guidance of a low single-digit increase in sales growth for FY 2022 with a diluted EPS of $1.55 to $1.57.
Wingstop operates 1,791 stores of which 37 U.S. locations are company-owned with 203 franchised operations in international markets.
In commenting on the quarter Michael Skipworth, president and CEO stated "Our first quarter 2022 results reflect the strength and momentum in our global development with a record 60 net new restaurant openings," He added "We delivered domestic same-store sales growth of 31.8% on a three-year basis. This coupled with the meaningful deflation we are experiencing in bone-in wings gives us confidence to raise our net new unit guidance for our full year to 220+. Our strategic growth levers and proactive investments in technology have positioned our brand for continued long-term growth as we continue executing against our vision to become a Top-10 Global Restaurant Brand."
On February 28th the management of Wingstop announced a restructuring of debt. Securitized notes to the value of $250 million were issued with the proceeds used to strengthen liquidity and for “corporate purposes” Wingstop has also renegotiated the $50 million variable funding note to allow for borrowing of up to $200 million subject to predetermined conditions
On March 26th, WING posted assets of $507.3 million, of which $99.6 million comprised goodwill and trademarks against long-term debt of $710.9 million. The Company had an intraday market capitalization of $2,742 million on May 4th ($4,180 million on March 1st.) WING traded with a forward P/E of 62.9 and has ranged over a 52-week period from $82.80 to $187.35 with a 50-day moving average of $116.68. Twelve-month trailing operating margin was 24.9 percent and profit margin 15.1 percent. Return on assets over the past twelve months was 19.1 percent. At close of trading on March 3rd pre-release, WING was priced at $89.18. At noon post-release on May 4th WING traded at at $90.16. On March 1st after announcing new financing, WING was priced at $146.82.