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Email Content: Poultry Industry News, Comments and more by Simon M. Shane

Wing Stop Posts Q3 Results


On October 26th Wing Stop (WING) released financial results for the 3rd Quarter of FY 2022 ending September 24th. The company generated a net income of $13.4 million on a sales volume of $92.7 million. Twenty one percent of revenue ($20.2 million) was derived from company-owned restaurants.  Net income during Q3 2021 attained $11.3 million on sales of $65.8 million. Diluted earnings per share increased from $0.38 in Q3 of FY2021 to $0.45 for the most recent quarter.


Gross margin for company stores was 22.0 percent for Q3 2022 compared to 12.5 percent in Q3 2021. Operating margin declined from 31.7 percent in Q3 2021 to 26.0 percent for the most recent quarter. Domestic same store sales growth attained 6.9 percent compared to 3.9 Percent in Q3 2021. Company owned stores attained 4.3 percent in same store sales growth in Q3 2022 compared to a loss of 0.2 percent in Q3 2021. Digital sales during the most recent quarter represented 62 percent of sales.


In commenting on Q3 results, Michael Skipworth, president and CEO stated “We delivered 6.9% domestic same store sales growth, with the majority of this growth driven by an increase in transactions, a demonstration of the momentum and underlying health of our business. This translates to 36.2% domestic same store sales growth on a three-year basis. "He added  "We've opened 167 net new restaurants through the third quarter and are on track to have a record year for restaurant development, enabled by significant bone-in wing deflation strengthening our brand partners' unit economics. This gives us confidence in our ability to deliver another record setting year for Wingstop."


Guidance for 2022 includes a low single digit increase in same store sales and 225 new store openings. The Wing Stop model involves franchising compared to Buffalo Wild Wings with a high proportion of Company-owned stores. All but 42 of the 1,898 System wide Wing Stop restaurants are franchised.


Wing Stop posted $411.0 million in total assets, of which $100.6 million was represented by intangibles and goodwill. Long-term debt increased 50.8 percent from December 2021 to $708.2 million. There is an accumulated stockholders deficit of $406.6 million. WING has a market capitalization of $4,450 million. WING posted a 52-week range in share price of $67.67 to $178.68 with a 50-day moving average of $132.52. The share trades with a forward P/E of 78.1 percent. Trailing 12-month operating margin is 2.1 percent and profit margin 13.0 percent. The company generated a return on assets of 14.6 percent. WING closed at $134.77 on October 25th pre-release and closed at $155.38 on October 26th.

Copyright © 2023 Simon M. Shane