WING’s decision, + 6.81% from Wingstop Inc. to pre-release first quarter results may have some unintended consequences for the aviation-themed restaurant chain that specializes in chicken wings, Stifel analysts say. “[W]Conjecture management felt it necessary to clear up any sales uncertainties created by the number of exogenous factors (eg, weather, stimulus, etc.) during the quarter, ”analysts led by Chris O’Cull wrote in a note.
Stifel notes that Wingstop typically does not provide earnings information prior to earnings day. “We are disappointed that the company has not waited until we can offer a profitability range for the first quarter because it may run the risk of Street estimates moving too high in the significant sales pace.” Stifel rates the purchase of Wingstop stock with a price target of $ 165. See: Applebee’s Launches Cheetos Flavored Wings-Only Chicken Brand Wingstop said fiscal first-quarter sales increased 30% to $ 558.9 million. Domestic same-store sales increased 20.7% and same-store sales of company-owned restaurants increased 13.4%. And digital sales increased 63.6%. The FactSet consensus for domestic same-store sales growth during the first quarter was 13.7% through March 31, when the preliminary sales announcement was made. Wingstop is scheduled to announce first quarter earnings on April 28. Wingstop reported an adjusted profit loss in its February fourth quarter report. A Wells Fargo report released Monday said restaurants will turn a profit in 2021 as the launch of the vaccine, suppressed demand and excessive savings send consumers eating out. Still, Wingstop faces tough comparisons in the coming quarters, even if long-term growth potential is intact, UBS analysts say. Plus: Olive Garden’s father is raising wages for hourly workers as customers start dining again. “The next catalysts are likely to be better visibility into sales trends in the face of tough comparisons and the post-pandemic trajectory, as well as earnings stream,” wrote the UBS analysts. UBS rates Wingstop shares as neutral with a price target of $ 155. Truist Securities expects a decline in sales at the same restaurant in the second quarter and then “a quick return to positive trends” in the third quarter. Truist rates the purchase of Wingstop stock with a price target of $ 173. Shares in Wingstop are up 2.5% in the last three months and have gained 70.8% in the last year. The benchmark S&P 500 SPX index, + 1.18% has risen 59.1% in the last 12 months.