Wingstop (NASDAQ:WING) reported a robust fourth quarter, with earnings and revenue surpassing analyst estimates, yet shares fell over 4% as investors digested the results. The restaurant chain posted adjusted earnings per share (EPS) of $0.64, outperforming the consensus estimate of $0.57. Revenue for the quarter also exceeded expectations, coming in at $127.1 million against the predicted $119.94 million.
Despite the earnings beat, the company's stock experienced a decline. This negative market response may reflect concerns over future growth or other factors not directly related to the quarterly performance. Wingstop's fourth-quarter system-wide sales saw a significant increase of 24.5% to $965.9 million, with 115 net new openings contributing to this growth. Digital sales continued to be a strong driver, accounting for 67.0% of system-wide sales.
Year-over-year, the company achieved a 21.2% increase in total revenue from the same quarter last year, indicating a solid performance despite the previous fiscal year having an additional week. The adjusted net income rose by 4.9% to $18.8 million, or $0.64 per diluted share, and adjusted EBITDA grew by 13.2% to $39.1 million.
President and CEO Michael Skipworth highlighted the company's record-breaking year, with 18.3% growth in domestic same-store sales and a 13% unit growth rate. He expressed confidence in the brand's expansion strategy, aiming to scale Wingstop to over 7,000 restaurants.
Looking ahead to fiscal 2024, Wingstop anticipates mid-single-digit growth in domestic same-store sales and approximately 270 global net new units. The company forecasts selling, general and administrative (SG&A) expenses to be around $108 million, with stock-based compensation expense at approximately $19 million, and depreciation and amortization between $18 million and $19 million.
Investors will be watching closely to see if Wingstop can maintain its growth trajectory and manage costs effectively in the coming year as the company continues to navigate the competitive restaurant landscape.