Wingstop cuts 2026 sales outlook as Q3 profit tops estimates

Wingstop Inc. (WING) said on Oct. 28 that adjusted earnings per diluted share for its fiscal third quarter ended Sept. 26 were $1.08, topping the $1.04 consensus estimate compiled by Finnhub.

Revenue of $185.13 million fell short of the $197.29 million consensus estimate. The company also cut its domestic same-store sales outlook for 2026.

The company said in a regulatory filing that it released the results in an earnings release on the same day. The filing also disclosed a quarterly dividend.

Here's how the company did:

• Adjusted EPS: $1.08 vs. $1.09 a year earlier, against the $1.04 consensus estimate compiled by Finnhub
• GAAP diluted EPS: $1.07 vs. $1.02 a year earlier
• Revenue: $185.13 million vs. $175.74 million a year earlier, against the $197.29 million consensus estimate compiled by Finnhub
• Net income: $29.10 million vs. $28.48 million a year earlier
• System-wide sales: $1,437 million vs. $1,356 million a year earlier

"We are taking deliberate action across our business to drive same store sales growth," said President and Chief Executive Officer Michael Skipworth. "While we are not satisfied with our third quarter results and the improvement in sales performance is taking time, we are encouraged by the early indicators from the changes we've made and remain focused on returning to sustained sales growth."

Skipworth also pointed to the company's development pipeline and its long-term goal of becoming a Top 10 Global Restaurant Brand.

Revenue and costs

Domestic same-store sales decreased 5.4% in the quarter, against a 5.6% decline a year earlier. Company-owned domestic same-store sales fell 2.7%.

Total revenue rose from $175.74 million. Royalty revenue, franchise fees and other increased $5.1 million. Of that, $8.6 million came from net new franchise development, partly offset by a $3.6 million decrease tied to the 5.4% decline in domestic same-store sales. The company attributed the lower sales to lower transaction volumes, reflecting continued pressure on consumer spending.

Advertising fees rose $2.0 million, and company-owned restaurant sales rose $2.2 million, mainly from 16 corporate stores opened or acquired since the prior-year period.

Cost of sales was $27.2 million, or 78.2% of company-owned restaurant sales, up from 74.8%. The company said the increase was driven mainly by higher food, beverage and packaging costs, increased rent, repair and maintenance expenses, and higher labor costs at acquired restaurants.

Selling, general and administrative expense fell $0.2 million to $30.5 million. Stock compensation fell $2.0 million because of forfeitures, which was partly offset by a $1.5 million increase in headcount-related expenses.

Depreciation and amortization rose to $9.0 million from $6.2 million, reflecting technology investments placed in service after the prior-year period. The effective tax rate was 27.3%, compared with 28.1% a year earlier.

2026 guidance

The company lowered its domestic same-store sales forecast for 2026 to a decline of approximately 6.5% to 7%. In its previous results release on July 29, it had forecast a decline of 4% to 6%.

It also lowered its SG&A forecast to $138 million to $140 million, from the $140 million to $143 million range it gave on July 29. Both figures include $3 million of restructuring charges related to corporate realignment.

The company still expects 440 to 450 global net new units, or 14.4% to 14.7% unit growth. It expects stock-based compensation of about $21 million, depreciation and amortization of about $35 million, and interest expense, net of about $41 million.

Capital returns

The board declared a quarterly dividend of 33 cents per share on Oct. 27, resulting in a total dividend of about $9.0 million. It is payable Dec. 4 to stockholders of record as of Nov. 13.

During the third quarter, the company repurchased and retired 190,688 shares at an average price of $131.12. As of Sept. 26, $288.4 million remained available under its share repurchase program.

The company had 3,331 restaurants system-wide at the end of the quarter, after 76 net new openings in the period.