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Wingstop Inc. (WING)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $175.7M (+8.1% YoY) and diluted EPS was $1.02; Adjusted EPS was $1.09. EPS materially beat Wall Street consensus ($0.919*), while revenue missed ($185.3M*) and EBITDA came in below consensus ($60.2M*) .
  • Adjusted EBITDA rose 18.6% YoY to $63.7M (record quarter), while GAAP EBITDA was $55.1M; company-owned cost of sales improved 300 bps YoY to 74.8% .
  • Guidance shifted: domestic same-store sales cut to a 3–4% decline (from +1%), SG&A lowered to $131–132M ($140M prior), interest expense trimmed to ~$37.5M ($39M prior), D&A lowered to ~$26M ($28–$29M prior); global development raised to 475–485 net new units .
  • Stock reaction catalysts: the magnitude of the EPS beat and margin strength versus the revenue miss and the guidance downgrade on comps (near-term consumer softness). Management emphasized Smart Kitchen rollout, new brand campaign (“Wingstop is here”), and loyalty (Club Wingstop) as drivers to return to same-store sales growth in 2026 .

Values with asterisks are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA +18.6% YoY to a record $63.7M; CFO: “Adjusted EBITDA for Q3 was our highest single quarter on record,” reflecting asset-light model strength .
  • Company-owned margin expansion: cost of sales fell to 74.8% of sales (−300 bps YoY), aided by lower bone-in wing costs and operating leverage; Smart Kitchen improving speed and consistency, supporting margins and guest satisfaction .
  • Development momentum: 114 net new openings, system restaurants reached 2,932; 19% unit growth; raised 2025 global net new units to 475–485; management highlighted record pipeline and international acceleration (Ireland, Thailand, Italy, India agreement) .

What Went Wrong

  • Domestic same-store sales −5.6% YoY; company downgraded FY comps to −3% to −4% driven by broader consumer softness and pressure on lower-income/Hispanic cohorts where Wingstop over-indexes .
  • Top-line miss vs consensus: revenue $175.7M vs $185.3M*; EBITDA $56.8M* vs $60.2M*; management cited near-term choppiness and macro pressure, with stabilization into Q4 but continued caution .
  • Interest expense higher YoY on 2024 securitization; though outlook trimmed to ~$37.5M, the financing increases ongoing net interest expense headwind versus prior year .

Values with asterisks are retrieved from S&P Global.

Financial Results

Trend vs prior quarters (GAAP and Adjusted)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$171.1 $174.3 $175.7
Net Income ($USD Millions)$92.3 $26.8 $28.5
Diluted EPS ($)$3.24 $0.96 $1.02
Adjusted EPS ($)$0.99 $1.00 $1.09
Operating Income ($USD Millions)$38.3 $45.2 $49.0
Adjusted EBITDA ($USD Millions)$59.5 $59.2 $63.7
Company-owned Cost of Sales (% of sales)76.0% 75.2% 74.8%

Q3 vs Wall Street Consensus (S&P Global)

MetricConsensusActualBeat/Miss
Primary EPS$0.919*$1.09 Beat*
Revenue ($USD Millions)$185.3*$175.7 Miss*
EBITDA ($USD Millions)$60.2*$56.8*Miss*
# of EPS Estimates26*——
# of Revenue Estimates25*——

Values with asterisks are retrieved from S&P Global.

Segment Revenue Breakdown (Q3)

Revenue Category ($USD Millions)Q3 2024Q3 2025
Royalty, franchise fees and other$74.4 $81.2
Advertising fees$56.8 $62.0
Company-owned restaurant sales$31.3 $32.5
Total Revenue$162.5 $175.7

KPIs

KPIQ1 2025Q2 2025Q3 2025
System-wide sales ($USD Billions)$1.30 $1.34 $1.356
Net new openings (units)126 129 114
System restaurants (end period)2,689 2,818 2,932
Domestic AUV ($USD Millions)$2.135 $2.112 $2.061
Domestic same-store sales (% YoY)0.5% −1.9% −5.6%
Digital sales (% of system sales)72.0% 72.2% 72.8%

Company-owned Cost of Sales Detail (Q3 vs Q3 prior year)

Cost Component ($USD Thousands)Q3 2024Q3 2025% of Company-owned Sales (Q3 2025)
Food, beverage & packaging$11,590 $11,782 36.2%
Labor$7,355 $7,502 23.1%
Other operating expenses$6,270 $5,828 17.9%
Vendor rebates$(848) $(770) (2.4%)
Total cost of sales$24,367 $24,342 74.8%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Domestic same-store sales growthFY 2025~+1% ~−3% to −4% Lowered
Global unit growthFY 202517%–18% rate 475–485 net new units Raised
SG&A ($USD Millions)FY 2025~$140 $131–$132 Lowered
Depreciation & amortization ($USD Millions)FY 2025$28–$29 ~$26 Lowered
Interest expense, net ($USD Millions)FY 2025~$39 ~$37.5 Lowered
Stock-based compensation ($USD Millions)FY 2025~$26 ~$26 (reiterated) Maintained
Quarterly dividend ($/share)Q3 declared$0.30 (raised Q2 from $0.27) $0.30; payable Dec 12, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2)Current Period (Q3 2025)Trend
Smart Kitchen rollout & impact1,000 restaurants live; 40% faster ticket times; DFW outperformance; lunch/late-night uplift; mid-single-digit delivery growth in SK stores >2,000 restaurants live; many delivering ~10-minute speed; Southwest region comps mid-single-digit better than U.S.; guest scores improved after ~8 weeks Accelerating deployment and measurable lift
New brand campaignBuilding awareness via NBA/NFL partnerships “Wingstop is here” campaign to broaden top-of-funnel; showcase everyday moments, speed, and quality Launching broader brand storytelling
Loyalty programPilot planned Q4’25; design leverages ~60M user database Club Wingstop in pilot; sign-ups exceeding expectations; national launch by end of Q2’26 On-track; early engagement promising
Supply chain & food costsFood costs ~mid-30% targeted; visibility improved; frozen fries aided labor efficiency Visibility into food/packaging costs through 2026 at mid-30% target Stable/predictable cost outlook
Macro/consumerSoftness in lower-income/Hispanic cohorts; July industry-wide weakness; comps easing in 2H Broader softness, comps guide cut; stabilization into Q4; 75K+ income cohort fastest-growing Cautious near-term; targeting higher-income cohorts
Development pipelineRaised unit growth to 17–18% in Q2; record commitments Raised to 475–485 net opens; mid-teens unit growth outlook for 2026; international ramp; India agreement Strong, multi-year runway
Daypart dynamicsLunch and late-night opportunities; tenders/sandwich indexing higher Dinner grew; snack pressured; tenders attracting 18–25 demographic Mixed; core dinner resilient

Management Commentary

  • CEO: “We are seeing more and more restaurants on the new kitchen operating platform start to consistently deliver a 10-minute speed of service… our Southwest region… had a mid-single-digit delta versus the U.S. average” .
  • CEO: “Our new campaign’s tagline is, ‘Wingstop is here’… showcasing how Wingstop fits into everyday life moments… broadening the top of the funnel” .
  • CFO: “Adjusted EBITDA was $63.6 million… our highest single quarter on record… company-owned restaurant cost of sales declining by 300 basis points YoY to 74.8%” .
  • CFO: “We are updating our full-year outlook for domestic same-store sales to a decline of 3%–4%… increasing our global unit growth guidance to 475–485 net new restaurants” .

Q&A Highlights

  • Comps path: Management expects near-term choppiness into Q4 but sees stabilization; targets return to same-store sales growth in 2026 driven by Smart Kitchen, new ad campaign, and loyalty rollout .
  • Smart Kitchen incrementality: Southwest region showing a mid-single-digit positive delta vs U.S.; improved speed, accuracy, and consistency; benefits begin 6–8 weeks post-launch and strengthen over 3–6 months .
  • Value/promotion stance: Not leaning into discounting; focus on protecting unit economics; prior bundles like “20 for $20” showcased value without margin pressure .
  • Development dynamics: Cannibalization historically ~1 point of comp in high-volume boxes; recent “honeymoon” lapping in brand-new markets noted; international growth accelerating .
  • Delivery platforms: Under-30-minute placement on DSPs expands consideration set and supports repeat; marketing may lean into this as rollout completes in 2026 .

Estimates Context

  • Q3 EPS beat: $1.09 actual vs $0.919 consensus*; revenue miss: $175.7M actual vs $185.3M*; EBITDA miss: $56.8M* actual vs $60.2M*; 26 EPS estimates, 25 revenue estimates* .
  • Implications: Expect near-term estimate revisions downward for revenue/EBITDA given comps guide cut, partly offset by stronger margins and SG&A/D&A reductions .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • EPS beat driven by margin discipline and lower SG&A/D&A; headline revenue/EBITDA misses reflect consumer softness and lapping effects—near-term est. revisions likely skew lower on top line .
  • Guidance reset is conservative on comps, but development is accelerating with 475–485 net opens in 2025 and mid-teens pace indicated for 2026—unit growth supports model resilience .
  • Smart Kitchen is a tangible upgrade: sustained ~10-minute speed, higher guest satisfaction, and regional comp outperformance—expect impact to scale as rollout completes and marketing highlights speed .
  • New “Wingstop is here” campaign plus 2026 loyalty launch aims to broaden the top of funnel and drive frequency, especially in higher-income cohorts; aligns with digital strengths (~73% digital mix) .
  • Cost visibility into 2026 (mid-30% food/packaging) and SG&A reductions underpin margin durability despite macro choppiness .
  • Capital returns continue: $0.30 dividend declared; $151.3M buyback capacity remaining; leverage elevated from 2024 securitization but interest outlook trimmed .
  • Trading setup: Near-term sentiment may hinge on comps trajectory and holiday/Q4 trends; medium-term thesis centers on Smart Kitchen + brand/loyalty flywheel driving a return to SSS growth and sustained unit expansion .

Additional relevant press releases: Limited-time Fiery Lime flavor launched Nov 13 (brand engagement) ; third-party shareholder investigation announcement Nov 6 (law firm notice; not company guidance) .