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Wingstop Announces Preliminary Q4 & 2017 Sales Results

Zacks Equity Research
Updated

Wingstop Restaurants Inc. WING recently released initial unaudited sales figures for fourth quarter and fiscal 2017, which ended on Dec 30, 2017.

Notably, when compared with the fourth quarter and 2016, which had 14- and 53-weeks, respectively, the results for fourth quarter and full year 2017 lag slightly in terms of comparable revenues.

In a bid to be among the top ten global restaurant brands, Wingstop focuses on four long-term growth strategies. These strategies include national advertising, digital expansion, delivery and international development, which, according to management have paid off in the fourth quarter.

WIngstop faced a number of challenges in the fourth quarter, which included record wing inflation of more than 40% and the negative impact of the recent hurricanes in the United States. However, the company is fairly upbeat about its fourth-quarter sales results.

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Shares of Wingstop have rallied 51.6% in the past year, outperforming the industry’s gain of 20.4%.




Q4 Sales Results

During the fourth quarter, system-wide restaurant count was up 13.5% year over year to 1,133 worldwide locations. Net openings were 45 in the quarter.

Domestic comps improved 5.2%, while the company recorded company-owned restaurant comps growth of 4.6%.

System-wide sales were up 15.6% to approximately $285 million in the quarter on a year-over year basis.

Fiscal 2017 Sales

Net openings in fiscal 2017 were 135. The company’s domestic comps grew 2.6%, while company-owned restaurant comps increased 1.6%.

System-wide sales increased 14% to roughly $1.1 billion from the previous year.

Notably, fiscal 2017 marked the company’s 14th consecutive year of positive comps growth.

Wingstop Inc. Revenue (TTM)

 

Wingstop Inc. Revenue (TTM) | Wingstop Inc. Quote

 

Our Take

The company’s reported sales figures reflect Wingstop’s potential to maintain the top-line momentum.

In order to boost traffic and sales, the company is relying on continual expansion. Recently, Wingstop opened its 100th location in Reynosa, Mexico, taking its international restaurant count higher. The company also signed two international development agreements for 110 restaurants across Australia and New Zealand over the next 10 years and more than 70 restaurants in France in the next 12 years.

By improving digital ordering and launching national advertising, the company is trying to increase brand awareness in all markets that will continue to drive its top line.

Subsequently, the Zacks Consensus Estimate of total sales for fourth-quarter fiscal 2017 is pegged at $27.85 million, reflecting 12.5% year-over-year growth.

Zacks Rank & Stocks to Consider

Wingstop carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the restaurant space are Darden Restaurants, Inc. DRI, Domino's Pizza, Inc. DPZ and McDonald's Corporation MCD, all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Darden, Domino's and McDonald's 2018 earnings are expected to improve 13.2%, 23.5% and 8.9%, respectively.

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