Wingstop Tumbles As Chicken Demand Falters, Guidance Cut

Wingstop shares fell the most in six months in premarket trading after the company cut its full-year outlook and reported weaker-than-expected first-quarter sales, citing a pullback in traffic as management pointed to “continued pressure on consumer spending.”

The chicken chain, with 2,653 locations across the US, now expects 2026 domestic same-store sales to decline at a low single-digit rate, down from its prior forecast of flat to low single-digit growth. Analysts tracked by Bloomberg forecast a .4% contraction this year, after lowering their forecast from about 1.3% in mid-February when Wingstop last reported earnings.

First-quarter domestic same-store sales fell 8.7%, exceeding the 5.4% decline expected by analysts. Adjusted EPS of $1.18 topped estimates, helped by lower-than-expected costs, including chicken wing costs.

Here’s a snapshot of first-quarter results (courtesy of Bloomberg):

Total domestic stores comp sales growth -8.7%, estimate -5.43% (Bloomberg Consensus)

Adjusted EPS $1.18 vs. 99c y/y, estimate $1.03

Revenue $183.7 million, +7.4% y/y, estimate $188.4 million

Adjusted Ebitda $65.4 million, +9.9% y/y, estimate $63.4 million

Total location count 3,153, +3.2% q/q, estimate 3,154

• Domestic franchise restaurants 2,596, +15% y/y, estimate 2,599 
• International franchise restaurants 500, +29% y/y, estimate 497

Cost of sales $24.7 million, +8.2% y/y, estimate $26.1 millions

SG&A expense $34.4 million, +9.6% y/y, estimate $35.7 million

Net addition of stores 97, -23% y/y, estimate 90

Important to note: Wingstop’s core customer base appears to skew younger, making it highly exposed to lower-income consumer pressures, such as the national average gasoline price topping $4 per gallon.

Wingstop bust-cycle… 

We have highlighted what has happened in convenience stores and gas stations when gas topped the politically sensitive line of $4 last month.

Read:

• Here’s What Happened Inside Gas Stations When Gas Hit $4

• Here’s What Happened Inside Convenience Stores When Gas Hit $4

Related:

• Goldman: Fast Food’s ‘Bang For The Buck’ Gains As Casual Dining Appeal Craters

Perhaps Wingstop needs to run promotions or offer ‘BNPL’ loans for their chicken orders to bring back younger customers.