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 17th 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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