The firm says it expects Wingstop to have a strong run heading into its first-ever Analyst Day on Jan. 16. While the stock is up 30% over the past year, it's still lagging the S&P 500 by more than 30% since Aug. 22.
At the January conference, analyst Katherine Fogertey expects management to address strong underlying trends, manageable commodity prices, improving delivery economics, marketing initiatives, international growth, and improving speed of service.
Fogertey notes that wing-cooking time currently averages about 16 minutes.
Goldman raised its fourth-quarter same-store-sales-growth estimate to 12.5% from 10%. That's thanks to a big ad push that Goldman’s checks show sustained October digital traffic.
“WING raised the franchisee-ad-fund contribution from 3% to 4% this year, which, on top of strong organic system sales growth, gave the company $20 million more to spend on advertising in 2019,” Fogertey wrote.
“Kantar data suggests their September 2019 advertising spend was four times September 2018 as they ran the `Where Flavor Gets their Wings' national TV advertising campaign featuring Anthony Anderson," the analyst wrote.
"We expect the benefit from a much louder voice to have carried into fourth-quarter 2019.”
Wingstop shares at last check were up 5.2% to $84.47.