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Investing.com – Wingstop stock (NASDAQ:WING) slumped more than 11% Wednesday after the company warned of high chicken prices, stretched supplies and labor shortages while reporting third-quarter numbers that disappointed.
According to the company, as a percentage of company-owned restaurant sales, total cost of sales could rise by 300 basis points to 83% for the year from 80% forecasted earlier. One basis point is one-hundredth of a percent.
Sales were costlier in the third quarter as the cost of bone-in chicken wings soared 49%. Wages and training costs were higher, too.
The chain serving classic wings, boneless wings and tenders expects domestic same-store sales to grow 7% to 8%.
Domestic same-store sales rose around 4% while digital accounted for around 62% of sales, comparable to the third quarter in the last financial year.
Total revenue rose 2.8%, to $65.8 million, as there were more store openings, and royalty revenue rose as did franchise fees. This was offset by a rebate of $6.9 million of advertising surplus that was returned to franchisees in the third quarter to partially account for the impact of record high wing inflation.
Net profit was 12% higher at $11.29 million, aided by lower advertising expenses.
The company closed the quarter ended September 25 with 1,673 restaurants system-wide, 49 more than at the end of the same quarter last year.
