Wingstop Inc. (NASDAQ: WING) reported a 7.4 percent increase in first-quarter revenue to $183.7 million, even as the restaurant chain saw a sharp 8.7 percent decline in domestic same-store sales.
"Despite the decline in same store sales, we delivered system-wide sales growth and double-digit Adjusted EBITDA growth in the quarter supported by 17% unit growth," Michael Skipworth, President and Chief Executive Officer, said in a statement.
The company's performance for the quarter ended March 28, 2026, showed total revenue climbing from $171.1 million in the prior year. Net income was $29.9 million, or $1.08 per diluted share. System-wide sales grew 5.9 percent to $1.4 billion, driven by the opening of 97 net new locations. Consensus estimates for revenue and EPS were not available in the report.
The results present a conflicting picture for investors, with rapid global expansion contrasting with falling sales at established U.S. locations. The company updated its full-year 2026 guidance to a low-single digit decline in domestic same-store sales, suggesting the current pressures are expected to continue.
Wingstop's revenue growth was primarily fueled by royalty revenue and franchise fees from its expanding network of restaurants. The company's total restaurant count grew by 17 percent year-over-year to 3,153 system-wide locations. However, the drop in same-store sales was attributed to lower transaction volumes, which the company said reflects "continued pressure on consumer spending."
Digital sales remained a strong point, accounting for 72.5 percent of all system-wide sales during the quarter. Cost of sales as a percentage of company-owned restaurant sales decreased to 74.9 percent from 76.0 percent, helped by a decline in the cost of bone-in chicken wings.
The company continued its aggressive expansion, opening 97 net new restaurants in the first quarter. Wingstop reiterated its guidance for a global unit growth rate of 15 to 16 percent for 2026 as it pushes to become a top 10 global restaurant brand.
In a move to return value to stockholders, the board of directors declared a quarterly dividend of $0.30 per share. Additionally, Wingstop repurchased 374,324 shares of its common stock for an average price of $208.08 during the quarter, with $313.4 million remaining available under its share repurchase program.
The negative same-store sales trend suggests potential challenges in maintaining momentum at mature locations, even as the brand rapidly grows its footprint. Investors will be watching the company's next earnings report for signs of stabilization in same-store sales as the new locations begin to mature.
This article is for informational purposes only and does not constitute investment advice.
