Wingstop's Traffic Slowdown Tests Franchise Economics
(NASDAQ: WING) entered 2025 with a 21-year streak of growth in same-store sales (comps). But that run is coming to an end following a significant third-quarter downturn for the fast-food purveyer of buffalo wings. This reversal follows impressive domestic growth of 18.3% in 2023 and nearly 20% in 2024, which created a high hurdle for year-over-year comparisons.
As a result, domestic comps flattened in the first half of the year before dropping 5.6% in the third quarter as the pressure on consumers deepened. So what should investors make of these results?
Management initially projected low- to mid-single-digit comps for 2025, but after multiple guidance cuts, it now expects a 3% to 4% decline heading into the fourth-quarter report this month. With 50% of its domestic footprint in Texas, California, Florida, and Illinois, the issues began as disruptions in the labor market in these core regions reduced transaction counts and spread to middle-income diners by the third quarter. After a volatile ride, the stock has leveled off and is down just 10% over the past year.
Source Fool.com
