Fast-food chain Wingstop (NASDAQ: WING) missed Wall Street’s revenue expectations in Q4 CY2025, but sales rose 8.6% year on year to $175.7 million. Its non-GAAP profit of $1 per share was 20% above analysts’ consensus estimates.
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Wingstop (WING) Q4 CY2025 Highlights:
- Revenue: $175.7 million vs analyst estimates of $177.8 million (8.6% year-on-year growth, 1.2% miss)
- Adjusted EPS: $1 vs analyst estimates of $0.83 (20% beat)
- Adjusted EBITDA: $61.88 million vs analyst estimates of $58.14 million (35.2% margin, 6.4% beat)
- Operating Margin: 26.7%, in line with the same quarter last year
- Locations: 3,056 at quarter end, up from 2,563 in the same quarter last year
- Same-Store Sales fell 5.8% year on year (10.1% in the same quarter last year)
- Market Capitalization: $7.00 billion
"Our team continues to demonstrate operational excellence as we opened 493 net new restaurants and expanded into six new international markets," 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
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
With $696.9 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 23.2% annualized revenue growth over the last six years was incredible as it opened new restaurants and increased sales at existing, established dining locations.
This quarter, Wingstop’s revenue grew by 8.6% year on year to $175.7 million, missing Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 17.2% over the next 12 months, a deceleration versus the last six years. Still, this projection is noteworthy and indicates the market sees success for its menu offerings.
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Restaurant Performance
Number of Restaurants
A restaurant chain’s total number of dining locations often determines how much revenue it can generate.
Wingstop sported 3,056 locations in the latest quarter. Over the last two years, it has opened new restaurants at a rapid clip by averaging 17.3% 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 is an industry measure of whether revenue is growing at those existing restaurants and is driven by customer visits (often called traffic) and the average spending per customer (ticket).
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 8.6%. 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 5.8% 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 Q4 Results
We enjoyed seeing Wingstop beat analysts’ EBITDA expectations this quarter. We were also glad its same-store sales outperformed Wall Street’s estimates. On the other hand, its revenue slightly missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 12.6% to $283.51 immediately after reporting.
Wingstop may have had a good quarter, but does that mean you should invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
