Wingstop (WING) reported first-quarter results that beat expectations after hours on Thursday, while Shake Shack (SHAK) jumped after it put up a surprise gain in same-store sales and bumped its 2018 sales outlook higher.
XWingstop
Estimates: Wall Street expects the chicken-wing chain to report earnings per share of 20 cents, down 9%, with revenue jumping 37% to $37 million. Same-store sales are seen rising 5.3% overall, with company-owned comps up 5.5% and franchise comps up 5.3%, according to Consensus Metrix.
Results: Revenue of $37.4 million. EPS came in at 25 cents. Domestic same-store sales jumped 9.5%.
The company kept its full-year unit growth outlook at 10%, as well as its full-year forecast for "low single digit" domestic same-store sales growth. Wingstop also kept its full-year EPS outlook at around 75 cents. Analysts expect 77 cents.
Stock: Shares rose 2.3% after hours on the stock market today.
The stock appears to be forming the third part of an ascending base, which is a rare stock pattern can lead to powerful gains. Wingstop is also part of the IBD 50, a screen of leading growth stocks that have stellar fundamentals.
Shares of KFC parent Yum Brands (YUM), which sank 7% Wednesday on weak sales, rallied 3%. Popeye's Chicken parent Restaurant Brands International (QSR) edged up 0.9%.
"We are pleased to see WING's top-line momentum accelerate in 1Q ... which we credit to the new split menu, national advertising, growth in digital sales/delivery, and accelerating consumer fundamentals in favor of WING's value and convenience propositions," Stephens analyst Will Slabaugh said in a research note released after the company's earnings.
Wingstop in February indicated that the pace of its restaurant growth this year would slow from last year's, sinking the company's shares. Analysts and management attributed the weaker forecast to the rising costs for bone-in chicken wings.
During the company's earnings call in February, CEO Charlie Morrison said the chain had to contend with "record high wing inflation." He later added that "any brand that deals with a nearly 700-basis-point increase in food cost year over year can expect to see franchisees start to pull back a little bit."
As with other fast-food chains, Wingstop is trying to simply its digital ordering platform and has been expanding delivery service.
The company closed out last year with 23% of its orders coming from digital, among the biggest share for a publicly-traded company that isn't selling pizza, Cowen analyst Andrew Charles said in a research note last week. He also said that the company will likely be spending more on TV advertising this year.
Shake Shack
Estimates: EPS to drop 30% to 7 cents while revenue climbs 24.7% to $96 million. Same-store sales are expected to dip 0.4%, according to Consensus Metrix.
Results: Total revenue rose 29.1% to $99.1 million, with same-store sales rising 1.7%. EPS was 15 cents.
The better-burger also tweaked its full-year same-store sales forecast, to a range of flat to a 1% gain. That compared to an earlier outlook for flat same-store sales. And Shake Shack raised its revenue forecast to between $446 million and $450 million, up from an earlier view for $444 million to $448 million.
Stock: Shares surged 7%. McDonald's (MCD), which beat views on Monday, was unchanged after hours.
Shake Shack tumbled in February after forecasting 2018 same-store sales would come in flat, below Wall Street views, despite menu price hikes of 1.5%-2% in December.
The chain may also see some competition as McDonald's rolls out new types of burgers and cooks with fresh-beef patties at more locations.
But Shake Shack has also been testing new menu items and recently saw success with limited-time offering of chili.
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The post Wingstop Earnings Top, Shake Shack Boosts Full-Year Sales Forecast appeared first on Investor's Business Daily.
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