Post Earnings Coverage as Wingstop’s Quarterly Revenue Surged 20.3%, EPS Grew More Than 15%

Upcoming AWS Coverage on Domino’s Pizza Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 20, 2017 / Active Wall St. announces its post-earnings coverage on Wingstop Inc. (NASDAQ: WING). The Company announced its fourth quarter and fiscal 2016 results on March 02, 2017. The restaurant chain exceeded earnings’ expectations. Register with us now for your free membership at:

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One of Wingstop’s competitors within the Restaurants space, Domino’s Pizza, Inc. (NYSE: DPZ), reported on February 28, 2017, its results for the fourth quarter and fiscal 2016. AWS will be initiating a research report on Domino’s Pizza in the coming days.

Today, AWS is promoting its earnings coverage on WING; touching on stock like DPZ. Get our free coverage by signing up to:

http://www.activewallst.com/register/

Earnings Reviewed

For the quarter ended December 31, 2016, Wingstop’s total revenue surged 20.3% to $24.8 million from $20.6 million in the year ago comparable period. The Company’s revenue numbers fell short of analysts’ consensus of $25 million. For FY16, Wingstop’s total revenue advanced 17.2% to $91.4 million from $78.0 million in the prior fiscal year.

During Q4 2016, Wingstop’s Royalty revenue and franchise fees increased $3.1 million to $15.6 million from $12.5 million in Q4 2015, primarily driven by an 18.3% increase in the number of franchised restaurants, domestic same store sales growth of 1.0%, and approximately $0.9 million of additional revenue from the 53rd week. For FY16, Wingstop’s Royalty revenue and franchise fees increased $10.4 million to $57.1 million from $46.7 million in the prior fiscal year.

For Q4 2016, Wingstop’s Company-owned restaurant sales increased $1.1 million to $9.1 million from $8.0 million in Q4 2015. The increase was the result of Company-owned domestic same store sales growth of 1.0%, the opening of two Company-owned restaurants in the Dallas area during Q2 and Q4 2016 and approximately $0.6 million of additional revenue from the 53rd week. Company-owned restaurant sales increased $3.0 million to $34.3 million in FY16 from $31.3 million in the prior fiscal year.

During the reported quarter, Wingstop’s cost of sales increased 23.4% to $7.0 million from $5.6 million in Q4 2015. As a percentage of Company-owned restaurant sales, cost of sales increased 590 basis points to 76.1% from 70.2%. The increase was driven primarily by a 13.1% increase in commodities rates for bone-in chicken wings, an increase in the average size of chicken wings, and an increase in labor, and increases related to pre-opening expenses and the ramp up of one Company-owned restaurant that opened during Q4 2016 as it achieves normal efficiency. Cost of sales increased 13.9% to $25.3 million in FY16 from $22.2 million in the prior fiscal year. As a percentage of Company-owned restaurant sales, cost of sales increased 280 basis points to 73.8% from 71.0%.

For Q4 2016, Wingstop’s net income increased to $4.3 million, or $0.15 per diluted share, compared to net income of $3.8 million, or $0.13 per diluted share in Q4 2015. The impact of the 53rd week on net income was $0.2 million. The Company’s adjusted net income increased 15.5% to $4.4 million, or $0.15 per pro-forma diluted share, compared to $3.8 million, or $0.13 per pro-forma diluted share, in the year earlier same quarter. The Company’s earnings numbers surpassed market expectations.

For FY16, Wingstop’s net income increased to $15.4 million, or $0.53 per diluted share, compared to net income of $10.1 million, or $0.36 per diluted share, in the prior fiscal year. Adjusted net income increased 24.2% to $16.9 million, or $0.58 per pro-forma diluted share, compared to $13.6 million, or $0.47 per pro-forma diluted share, in the year ago same period.

Restaurant Development

As of December 31, 2016, there were 998 Wingstop restaurants system-wide. This included 922 restaurants in the US of which 901 were franchised restaurants and 21 were Company-owned. Wingstop’s international presence consisted of 76 franchised restaurants across five countries. During Q4 2016, there were 49 net system-wide Wingstop openings, including nine international franchised locations.

Financial Outlook

For the fiscal year ending December 30, 2017, Wingstop is forecasting System wide unit growth of approximately 13% to 15%. The Company expects low single digit domestic same store sales growth. Wingstop is also forecasting net income between $18.5 million and $18.8 million and fully diluted EPS growth to be in the 8%-10% range. The Company is estimating adjusted EBITDA growth of 13%-15% for FY17.

Balance Sheet & Cash Flow

As of December 31, 2016 Wingstop had cash and cash equivalents of approximately $3.8 million and $150.7 million in debt. The Company’s net debt to trailing 12-month adjusted EBITDA was approximately 4.1 times. Wingstop made $5 million in debt payments against its revolving debt facility during the reported quarter. Wingstop’s annual CapEx was $2 million.

Stock Performance

Wingstop’s stock climbed 1.33%, closing last Friday’s session at $26.65 with a total volume of 566.37 thousand shares. The company’s shares surged 29.39% in the last twelve months. The Company’s shares are trading at a PE ratio of 50.00. At Friday’s closing price, the stock’s net capitalization stands at $769.12 million.

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