Fast-food chain Wingstop (NASDAQ: WING) missed Wall Street’s revenue expectations in Q3 CY2025, but sales rose 8.1% year on year to $175.7 million. Its non-GAAP profit of $1.09 per share was 18.6% above analysts’ consensus estimates.
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Wingstop (WING) Q3 CY2025 Highlights:
- Revenue: $175.7 million vs analyst estimates of $185 million (8.1% year-on-year growth, 5% miss)
- Adjusted EPS: $1.09 vs analyst estimates of $0.92 (18.6% beat)
- Operating Margin: 27.9%, up from 24.5% in the same quarter last year
- Locations: 2,932 at quarter end, up from 2,458 in the same quarter last year
- Same-Store Sales fell 5.6% year on year (20.9% in the same quarter last year)
- Market Capitalization: $5.98 billion
"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 & Chief Executive Officer.
Company Overview
The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ: WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $683 million in revenue over the past 12 months, Wingstop is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the bright side, it can grow faster because it has more white space to build new restaurants.
As you can see below, Wingstop’s sales grew at an incredible 24.1% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as it opened new restaurants and increased sales at existing, established dining locations.
This quarter, Wingstop’s revenue grew by 8.1% year on year to $175.7 million, missing Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 20.8% over the next 12 months, a deceleration versus the last six years. Still, this projection is admirable and suggests the market is baking in success for its menu offerings.
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Restaurant Performance
Number of Restaurants
Wingstop sported 2,932 locations in the latest quarter. Over the last two years, it has opened new restaurants at a rapid clip by averaging 16.5% annual growth, among the fastest in the restaurant sector. This gives it a chance to scale into a mid-sized business over time. Furthermore, one dynamic making expansion more seamless is the company’s franchise model, where franchisees are primarily responsible for opening new restaurants while Wingstop provides support.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Same-Store Sales
The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth at restaurants open for at least a year.
Wingstop has been one of the most successful restaurant chains over the last two years thanks to skyrocketing demand within its existing dining locations. On average, the company has posted exceptional year-on-year same-store sales growth of 11.9%. This performance along with its meaningful buildout of new restaurants suggest it’s playing some aggressive offense.
In the latest quarter, Wingstop’s same-store sales fell by 5.6% year on year. This decline was a reversal from its historical levels. A one quarter hiccup shouldn’t deter you from investing in a business, and we’ll be monitoring the company to see how things progress.
Key Takeaways from Wingstop’s Q3 Results
We enjoyed seeing Wingstop beat analysts’ EPS expectations this quarter. On the other hand, its same-store sales both declined and missed and its revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 3.1% to $208 immediately after reporting.
Wingstop didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
