Wingstop’s System-Wide Sales Jump 33% In 3Q; Stock Is Up 61% YTD

Wingstop said its system-wide sales rose 32.8% to $509.2 million in the third quarter year-on-year, according to preliminary figures released on Tuesday. Shares of the restaurant chain rose in the pre-market session and are now down about 4% in morning trading.

Wingstop’s (WING) domestic 3Q same-store sales increased 25.4% year-on-year and same-store sales at company-owned restaurants grew 15.2% during the same comparative period. Moreover, its digital sales surged 62% in 3Q. The company is set to report 3Q earnings results on Nov. 2. and said that it opened 43 new restaurants during the reported quarter, despite industry-wide challenges tied to the Covid-19 pandemic.

Wingstop’s CEO Charlie Morrison said “The results during the third quarter continue to highlight the strength of our growth strategy. We continued to benefit from strong topline momentum with same-store sales of 25.4% during the quarter and 22.5% for 2020 year-to-date putting us well on our way to our 17^th consecutive year of positive same store sales growth.” (See WING stock analysis on TipRanks).

On Sept. 18, Cowen analyst Andrew Charles maintained a Buy rating on the stock with a price target of $166 (20.3% upside potential). The analyst expects Wingstop’s U.S. comps to exceed consensus estimates in the second half of 2020 and drive mid-single digit growth in 2021, with “room for upside”.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 9 Buys and 7 Holds. The average price target of $157.33 implies upside potential of about 14.3% to current levels. Shares have soared a whopping 61.2% year-to-date.

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