Wingstop (NASDAQ:WING) reports second-quarter earnings before the open today, with the call at 10 a.m. ET.
Polymarket gives the company an 87% chance of beating estimates, but for investors who have watched the stock lose two-thirds of its value from its peak, a bottom-line beat is no longer the main event.
Last quarter Wingstop beat earnings expectations comfortably, yet the stock was still punished, because domestic same-store sales plunged 8.7%. Wall Street now cares far more about sales at existing stores than short-term profitability.
Analysts expect earnings of $1.02 per share on revenue of about $190.2 million.
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“Delivery” leads at 93%. More than 72% of Wingstop’s sales come through digital channels, and faster delivery is the main promise of the Smart Kitchen technology management talks up every quarter.
“Share Repurchase” sits at 91%. The board added $300 million to its buyback authorization this year and has kept repurchasing as the stock fell.
“India” trades at 58%, and the contract requires the word to be spoken twice.
Wingstop signed a market development deal and incorporated a local entity last year, and management calls the country its largest new international market, though no stores have opened yet.
“Tajín” is a coin flip at 49%. Wingstop’s current promotion, Sweet Heat Chamoy featuring the Mexican chile-lime brand, launched nationwide June 30.
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“Citrus Mojo” sits at 15%. Citrus Mojo was the flagship launch of the quarter actually being reported, and its announcement alone sent the stock up 8% in April.
Three months later, traders barely expect it named. Limited-time flavors are the engine of Wingstop’s marketing.
“Lemon Pepper,” the chain’s signature flavor, trades at just 18%. The flavor customers know Wingstop best for is one management rarely brings to Wall Street.
“World Cup” sits at 48% after the tournament ran through the quarter. “NFL / NBA” trades at 31% with both leagues dark until fall.
Reading The Board
The number that matters Wednesday is same-store sales. The Street expects a decline of around 5.2%, and management has guided to a low-single-digit drop for the full year, so anything worse than that range reopens the wound from April.
Piper Sandler says the long decline has created favorable risk/reward, and Guggenheim believes the shares can nearly double if same-store sales return to steady growth. The earnings will likely beat; the question is whether the decline is slowing.
Total revenue keeps growing regardless, because franchisees open roughly 15% more stores a year, offsetting weaker sales at existing ones.
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