Wingstop Tumbles After Announcing Operating Chief Departure

The pending departure of Wingstop's chief operating officer throws a splash of cold water on the fast-growing restaurant chain, which has seen a big rebound in its stock price since late November.
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Shares of Wingstop (WING) - Get Report slumped Thursday as investors digested the chicken chain's sudden announcement that its chief operating officer will step down in March.

Wingstop's stock price fell 3.68% to $83.06 a share after the company notified the Securities and Exchange Commission that Laurence Kruguer would step down on March 7.

The pending departure of Wingstop's operating chief isn't the result of any disagreement, the company said in its filing with federal securities regulators.

Still, the pending departure of its COO throws a splash of cold water on the fast-growing restaurant chain, which has seen a big rebound in its stock price since late November, when it was trading under $73 a share.

Wingstop in late October released earnings that beat analysts' estimates, posting profit of 20 cents a share for the third quarter, compared with the 17 cents a share forecast by analysts surveyed by FactSet.

The chicken chain's stock winged higher again in early December, when Goldman Sachs added the stock to its conviction-buy list, while raising its forecast for same-store sales to 12.5%, up from 10% previously. 

Wingstop's sales rose after a big increase in ad spending, with a percentage increase in the amount franchises are required to chip in for marketing having combined with strong growth to provide an additional $20 million for the chain's ad campaign, Goldman Sachs noted.

The change at the crucial chief operating officer position comes as Wingstop prepares for its first-ever analyst day presentation on Jan. 16.

The chain is expected to discuss a range of issues at the meeting, from marketing trends to improving speed of service, with wing cooking time currently averaging 16 minutes, the Goldman report noted.