Back to top

Image: Bigstock

Wingstop Gears Up to Report Q4 Earnings: Things to Keep in Mind

Read MoreHide Full Article

Wingstop Inc. (WING - Free Report) is scheduled to report fourth-quarter fiscal 2024 results on Feb. 19, before the opening bell.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Its earnings surpassed the Zacks Consensus Estimate in three out of the trailing four quarters, with the surprise being 11.3%, on average.

WING’s Q4 Estimates

The Zacks Consensus Estimate for the fiscal fourth-quarter earnings per share is pegged at 86 cents, indicating growth of 34.4% from 64 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at $164.5 million, implying a 29.4% increase from the year-ago quarter’s figure.

Wingstop Inc. Price and EPS Surprise

Wingstop Inc. Price and EPS Surprise

Wingstop Inc. price-eps-surprise | Wingstop Inc. Quote

Factors Likely to Shape Wingstop’s Quarterly Results

Wingstop’s fiscal fourth-quarter earnings and revenues are likely to have increased year over year on the back of new restaurant openings, menu innovation and strong digital business. Also, the emphasis on delivery channel expansion, data-driven marketing and strategic pricing are likely to have aided the company’s performance in the to-be-reported quarter.

On the other hand, increased transactions are likely to have aided the company’s comps. The consensus estimate for domestic comps growth is pegged at 5.2%. Moreover, the consensus estimate for advertising fees, royalty revenues, franchise fees and other as well as company-owned restaurant sales is pinned at $57 million, $74 million and $33.1 million, respectively, indicating growth of 32.2%, 27.6% and 26.2%.

Furthermore, increased focus on MyWingstop tech platform bodes well. Earlier this year, the company launched its proprietary tech stack, MyWingstop, which integrates more than $2.5 billion in digital sales, supporting more personalized experiences and stronger digital engagement. With a 10% improvement in order efficiency, a 35% increase in its first-party database and a 69% digital sales mix (as of the fiscal third quarter), Wingstop is well-positioned to boost customer conversions and visit frequency. The success of MyWingstop has been promising for the fiscal fourth quarter as the company uses its digital platform to increase transactions and loyalty.

Although increased food, beverage and packaging costs are concerning. The supply-chain strategy is likely to have aided the company's bottom line by mitigating volatility in its core commodity.

In the last quarter, despite spot market wing prices experiencing more than 100% inflation, the company successfully navigated this challenge through its supply-chain strategies. The company expects food costs to have stepped down slightly in the fiscal fourth quarter, which is likely to have a positive impact on its bottom line.

What Our Model Says About WING

Our proven model predicts an earnings beat for Wingstop this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.

Earnings ESP of WING: Wingstop has an Earnings ESP of +3.01% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

WING’s Zacks Rank: The company currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Poised to Beat on Earnings

Here are some other stocks worth considering from the Zacks Retail-Wholesale sector, as our model shows that these, too, have the right combination of elements to beat on earnings this season:

Floor & Decor (FND - Free Report) has an Earnings ESP of +5.28% and a Zacks Rank of 3 at present.

FND is expected to register a 26.5% year over year decrease in earnings for the to-be-reported quarter. It reported an earnings beat in each of the trailing four quarters, delivering an average surprise of 12.2%.

Home Depot (HD - Free Report) currently has an Earnings ESP of +4.33% and a Zacks Rank of 3.

HD reported an earnings beat in each of the trailing four quarters, delivering an average surprise of 2.3%. Its earnings for the to-be-reported quarter are expected to grow 9.2% year over year.

Williams-Sonoma, Inc. (WSM - Free Report) currently has an Earnings ESP of +1.36% and a Zacks Rank of 3.

WSM’s earnings for the to-be-reported quarter are expected to grow 5.5% year over year. It reported an earnings beat in each of the trailing four quarters, the average surprise being 17.8%.

Published in