Wingstop 2025 Q2 Earnings Mixed Results as Net Income Declines 2.6%

Wingstop (WING) reported its fiscal 2025 Q2 earnings on Jul 30th, 2025. The company posted mixed results, with its adjusted earnings beating analyst estimates while net income showed a slight decline. Wingstop raised its 2025 global unit growth guidance, reflecting confidence in its expansion strategy. Despite challenges, the company's digital sales and strong unit growth were key highlights. Wingstop's financial discipline was evident in its adjusted EBITDA increase, despite a drop in domestic same-store sales, underscoring its resilience in a competitive market.

Revenue
Wingstop saw a 12.0% increase in total revenue, reaching $174.33 million in Q2 2025, up from $155.70 million in the same period last year. The revenue was driven by royalty revenue, franchise fees, and other income totaling $79.89 million. Advertising fees contributed $61.96 million, and company-owned restaurant sales amounted to $32.48 million, highlighting diverse revenue streams for the company.

Earnings/Net Income
Wingstop's earnings per share (EPS) edged up by 2.1% to $0.96 from $0.94 in the previous year, signaling ongoing earnings growth. However, net income declined by 2.6% to $26.76 million, down from $27.48 million in Q2 2024, reflecting a mixed earnings performance.

Price Action
The stock price of Wingstop decreased by 0.74% in the latest trading day, yet surged 15.35% over the past week and rose 5.94% month-to-date, showcasing a volatile but upward trend.

Post-Earnings Price Action Review
The strategy of purchasing Wingstop shares following a revenue increase and holding them for 30 days resulted in moderate returns yet underperformed the market. The strategy's compound annual growth rate (CAGR) was 10.93%, lagging behind the benchmark by 20.18%. Despite a maximum drawdown of 0.00% and a Sharpe ratio of 0.23, indicating minimal risk, the returns were conservative, making it an appealing choice for investors seeking stability. The strategy highlights the importance of balancing risk and reward, as it offers a steady yet moderate growth path, aligning with the preferences of risk-averse investors.

CEO Commentary
"Our second quarter results showcase the strength of our unit economics and returns our brand partners are seeing for their businesses," said Michael Skipworth, President & Chief Executive Officer. "Our momentum in development continued in the second quarter, opening 129 net new units, delivering 19.8% unit growth, which marked our fourth consecutive quarter of opening more than 100 net new units. We continue to open new restaurants at a record pace, demonstrating our brand partners’ commitment to growing the Wingstop brand, furthering us towards our vision of becoming a Top 10 Global Restaurant Brand."

Guidance
The company updated its 2025 guidance, projecting a global unit growth rate of 17% to 18%, up from the prior estimate of 16% to 17%. Net interest expenses are expected to be around $39 million, revised downward from $40 million. The company maintains its forecast of approximately 1% growth in domestic same-store sales.

Additional News
Wingstop's board announced a dividend increase from $0.27 to $0.30 per share, highlighting the company's commitment to returning value to shareholders. The company also filed a trademark for "National Chicken Tender Day," indicating potential brand expansion. Additionally, Wingstop expanded its support in response to natural disasters in Texas, demonstrating the company's dedication to community engagement and social responsibility.