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Wingstop Restaurants Inc. posted stronger-than-expected first-quarter profit as digital sales surged amid the COVID-19 pandemic.
The Richardson, Texas-based chicken wing chain earned $8.1 million, or 27 cents a share, as total revenue increased 15 percent to $55.4 million. System-wide sales, which account for both company-owned and franchised restaurants, rose 18.6 percent to $429.9 million.
Wall Street analysts surveyed by Refinitiv were expecting earnings of 24 cents a share on revenue of $55.72 million.
“Our domestic same-store sales experienced a slight uptick as we closed out the first quarter with an 8.9% increase from March 15 to March 28,” CEO Charles Morrison said in a statement.
WINGSTOP'S ONLINE BUSINESS SPICES UP QUARTERLY SALES
Digital sales grew to 47 percent of business at the end of the first quarter as “stay-at-home” orders intended to limit the pandemic's spread prompted more customers to order online.
Cost of sales rose by 15 percent to $11.2 million, primarily driven by increased labor costs associated with higher wages and additional pay to workers during the COVID-19 pandemic.
The company had $31 million cash at the end of the first quarter, up 142 percent from the year prior.
Wingstop’s board of directors declared an 11 cent per share dividend, making for a total payout of about $32 million.
Wingstop has 1,413 restaurants worldwide, 1,253 of which are in the United States. Of its U.S.-based restaurants, 97 percent were franchised. None of Wingstop’s international restaurants are company-owned.
Domestic same-store sales climbed 33.4 percent during the first four weeks of the second quarter, but Wingstop withdrew its 2020 guidance due to the uncertainty caused by COVID-19.
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The company's shares rose 40 percent this year through Tuesday, outperforming the S&P 500’s 11 percent decline.