Wingstop Inc. (WING) has reported a 52.21 percent jump in profit for the quarter ended Apr. 01, 2017. The company has earned $6.53 million, or $0.22 a share in the quarter, compared with $4.29 million, or $0.15 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $6.53 million, or $0.22 a share compared with $4.57 million or $0.16 a share, a year ago. Revenue during the quarter grew 20.36 percent to $26.57 million from $22.07 million in the previous year period. Gross margin for the quarter expanded 269 basis points over the previous year period to 75.16 percent. Total expenses were 66.31 percent of quarterly revenues, up from 65.44 percent for the same period last year. That has resulted in a contraction of 86 basis points in operating margin to 33.69 percent.
Operating income for the quarter was $8.95 million, compared with $7.63 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $9.96 million compared with $8.92 million in the prior year period. At the same time, adjusted EBITDA margin contracted 290 basis points in the quarter to 37.49 percent from 40.40 percent in the last year period.
Chairman, president and chief executive officer Charlie Morrison stated, "We are pleased with the productivity of our development pipeline and improved trends in sales. We opened 33 net new restaurants during the first quarter, including seven international restaurants, and recently signed a development agreement for 30 franchise restaurants in Malaysia, as we continue to build on our long-term vision of being a top 10 global restaurant brand. The improved sales trends during the back half of the quarter can be attributed to our recent launch of national advertising, as awareness for our unique brand continues to grow."
For financial year 2017, Wingstop Inc. projects net income to be in the range of $20.20 million to $20.50 million.
Working capital turns negative
Working capital of Wingstop Inc. has turned negative to $3.50 million on Apr. 01, 2017 from positive $1.97 million on Mar. 26, 2016. Current ratio was at 0.79 as on Apr. 01, 2017, down from 1.14 on Mar. 26, 2016. Days sales outstanding were almost stable at 11 days for the quarter, when compared with the last year period.
At the same time, days payable outstanding went up to 22 days for the quarter from 20 for the same period last year.
Debt increases substantially
Wingstop Inc. has witnessed an increase in total debt over the last one year. It stood at $144.87 million as on Apr. 01, 2017, up 70.35 percent or $59.83 million from $85.04 million on Mar. 26, 2016. Short-term debt stood at $3.50 million as on Apr. 01, 2017. Total debt was 128.03 percent of total assets as on Apr. 01, 2017, compared with 72.93 percent on Mar. 26, 2016.
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