On Wednesday, Wingstop Inc . (NASDAQ:WING) saw its price target increased by Stifel to $475 from $460, while the firm maintained a Buy rating on the stock. The adjustment comes after Wingstop reported a remarkable second quarter of 2024, with significant same-restaurant sales (SRS) gains of 28.7%, earnings per share (EPS) that exceeded expectations, and updated guidance for the short and long term.
The company's earnings of $0.93 per share outperformed the anticipated $0.83, highlighting the effectiveness of Wingstop's growth strategies. These include accelerated unit development, enhanced advertising to boost consumer awareness, and the implementation of sophisticated customer relationship management (CRM) solutions aimed at increasing visit frequency.
Wingstop's impressive sales performance is also reflected in the average unit volume (AUV) increase of approximately 75% since 2019, combined with robust unit economics that boast over 70% cash-on-cash returns. This strong financial health prompted the company to revise its long-term system sales potential in the U.S. to $18 billion, with a forecast of 6,000 units each averaging $3 million in sales.
The company's international segment has also shown remarkable growth, with AUVs rising by more than 80% over the past two years. In several markets, international units are reporting volumes higher than those in the U.S. The contribution from the international segment is expected to represent roughly 25% of the company's EBITDA growth on average over the next five years.
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