Wingstop may have turned its year around by announcing that the price of bone-in chicken wings has actually gone down
- Wingstop said it is benefiting from a 'meaningful deflation' in bone-in wing prices.
- Investors welcomed the news, sending the stock soaring.
It isn't often that a retailer saying its comparable-store sales (sales in stores that have been open for at least 12 months) have dropped from a year ago is taken as good news.
But it also isn't often that any retailer has given us anything resembling a positive development as far as inflation is concerned.
That changed on Thursday, with a single press-release statement by the CEO of chicken-wing restaurant operator Wingstop:
"We are in a unique position for the back half of 2022 where we are benefiting from meaningful deflation in bone-in wings, have a proven playbook, along with sales-driving levers that give us confidence in our ability to deliver on our outlook for 2022," said CEO Michael Skipworth.
The very notion that any restaurant operator may be getting a handle on inflation — or even seeing it reverse — was enough to send shares of Wingstop soaring; the stock was up more than 21% in recent Thursday trading. The earnings report also broke a streak of three straight quarters of missing analysts' profit expectations.
That ray of sunshine helped offset the parts of Wingstop's quarterly earnings report that were a little less sanguine: its comparable-store sales fell 3.3% from a year earlier, which contributed to the company missing Wall Street's revenue estimates despite opening 229 net new franchises in the past year.
Consumers have generally been reining in their spending at stores and restaurants in the wake of aggressive inflation.
However, Wingstop also slightly boosted its full-year estimate for future store openings to 220-235 new stores, up from at least 220 stores, signaling that inflation expectations hasn't derailed plans for growth.
- Culinary odyssey: Exploring Kochi's 10 famous cuisines
- Scientists have finally figured out what happened to the lost continent ‘Argoland’ that went missing 155 million years ago
- Revamp your health in 2024: 10 Essential food habits for a better life
- Consistent inflows push small-cap funds AUM past Rs 2 lakh cr mark in Nov
- Ola Electric aims to raise nearly Rs 5,800 cr via IPO, to file DRHP