Wingstop Inc. (NASDAQ:WING) shares dropped nearly 8% on Tuesday after the restaurant chain reported third-quarter revenue below Wall Street expectations and trimmed its full-year sales outlook, even as profits came in stronger than anticipated.
The company posted adjusted earnings of $1.09 per share, beating analysts’ estimates of $0.93, but revenue of $175.5 million fell short of the $187.37 million consensus forecast. System-wide sales rose 10% year over year to $1.4 billion, yet domestic same-store sales dropped 5.6%, a sharp reversal from the 20.9% surge recorded during the same quarter last year.
Despite the sales shortfall, Wingstop’s expansion strategy remained robust, with 114 net new restaurant openings in the quarter, representing 19.3% unit growth year over year. The chain now operates 2,932 locations globally, including 2,505 in the U.S.
“Our third quarter results highlight the strength and resiliency of our business model delivering 18.6% Adjusted EBITDA growth — supported by best-in-class unit economics, strategic investments, disciplined execution, and enthusiasm from our brand partners to open more Wingstops,” said Michael Skipworth, President and Chief Executive Officer.
The company lowered its 2025 outlook, now forecasting a 3% to 4% decline in domestic same-store sales, compared with its previous expectation of around 1% growth. Wingstop also revised its global expansion goal, now targeting 475 to 485 net new units, versus its earlier projection of 17% to 18% global unit growth.
Digital sales continued to strengthen, accounting for 72.8% of total system-wide sales, while adjusted EBITDA climbed 18.6% to $63.7 million, marking the highest quarterly level in company history.
Wingstop kept its quarterly dividend steady at $0.30 per share and continued its share buyback program, repurchasing 140,103 shares at an average price of $285.26 during the quarter.