By Emon Reiser
Shares for Wingstop are flying as investors expect accelerated growth for the chicken-wing chain in 2026, countering the current pullback in consumer spending that's weakening the restaurant sector.
Shares rose 9%, to $258.94 in midday Wednesday trading. The stock, up three of the past four trading days, also gained Tuesday despite third-quarter results that undershot Wall Street expectations. Restaurant investors boosted Wingstop's stock while shares for industry competitors such as Chipotle and Cava recently dropped, with executives saying more young people are eating at home due to financial pressures.
Wingstop was not immune, reporting a decline in spending from Hispanic and low-income customers during the third quarter, leading to a 5.6% decrease in third-quarter same-store sales. Looking to the quarters ahead, Wingstop executives on a call with analysts said the chain's growth is moving faster than expected toward its goal to scale to 10,000 restaurants. Wingstop ended the third quarter close to 3,000 units globally.
"WING has again raised its unit growth guidance, now to 19% for FY25, pointing to the incredibly sturdy unit economic model that the brand enjoys, and which management works diligently to protect," Benchmark analyst Todd Brooks said in a note.
Brooks noted that management disclosed an agreement with an unnamed operating partner in India, potentially a 1,000-unit market for the Dallas chicken-wing chain.
"This signing continues the accelerating growth of the brand internationally, with multiple new country entries in FY25 and planned for FY26," Brooks noted. Locations in Ireland, Italy and Thailand are also in the works.
Investors are also digging into Wingstop's increased efficiency and marketing as it expands its footprint. The company's Smart Kitchens--an artificial-intelligence-powered system--are making service faster with greater accuracy at the 2,000 locations where the technology has been rolled out.
"Our Southwest region, which has the highest concentration and longest tenure with the new kitchen operating platform, is consistently delivering these 10-minute speed of service levels with 100% of restaurants seeing improvements in guest satisfaction scores, particularly in areas such as accuracy and consistency," said Chief Executive Michael Skipworth on a call with investors Tuesday.
Wingstop in the second quarter of 2026 intends to roll out its first loyalty program to 60 million people, which along with a new marketing campaign is seen as another engine for growth in the quarters ahead.
"WING maintains key drivers to support a positive comp inflection next year, including a new marketing campaign, positive Smart Kitchen results, a loyalty program launch and bundled promotions," UBS analysts say. "WING's valuation and long-term growth remain compelling."
Write to Emon Reiser at emon.reiser@wsj.com
(END) Dow Jones Newswires
November 05, 2025 12:39 ET (17:39 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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