Investing

Wingstop Chicken Wing Costs Fell 42% Last Quarter, Shares Rise Past Analysts' Target

Greg Morcroft

Published: October 28, 2022 4:11 am

Last Updated: October 28, 2022 12:57 pm

Wingstop (US:WING) shares rose for a second straight day on Thursday, adding two percent a day after the company jumped more than ten percent after the company said chicken wing prices fell more than 40%, with savings going to the bottom line.

Wingstop also posted third quarter financial results on Wednesday. Revenue of $92.7 million and earnings of 45 cents a share both topped analyst estimates.

“As a percentage of company-owned restaurant sales, cost of sales decreased to 77.2% from 86.3% in the prior year comparable period. The decrease was primarily driven by food, beverage and packaging costs benefiting from a 42.7% decrease in the cost of bone-in chicken wings as compared to the prior year period,

It said costs to open eight New York City restaurants partly offset the food cost savings.

Including the New York York locations, Wingstop said it opened 167 new locations in the third quarter and is on track for record growth this year, “enabled by significant bone-in wing deflation,” strengthening our brand partners’ unit economics.

The shares hit their consensus analyst target price on Thursday, and Wall Street analysts welcomed the news with a bouquet of upgrades.

Wingstop crossed above the average analyst 12-month target of $135.29 and traded around $159 on Thursday afternoon.

Goldman Sachs, Citigroup, BMO, and several others raised their share price targets after the report.

This article originally appeared on Fintel