Restaurant stocks saw action Wednesday as first-quarter surprises, and mergers and acquisitions, spurred some heavy trading.
Wingstop jumped on strong first-quarter earnings and its full-year outlook.
The Addison, Texas-based chain easily outpaced FactSet analyst consensus for both earnings and sales growth. Year over year, the restaurant operator reported a 74% earnings rebound to 59 cents. Revenue increased 43% to $108.7 million.
Wingstop, which operates in 44 states, also reported that domestic same-store sales grew 20.1% during the quarter. Its digital sales reached 65.2% of overall sales, a record.
For 2023, Wingstop's updated guidance now includes "high single-digit" domestic same-store-sales growth in 2023. Analysts expected 6.2%, FactSet shows.
WING stock leapt 9.4% to 217.95 in choppy trade on the stock market today. The move saw it jump above the 5% buy zone from a recent breakout past 193.84.
Restaurant Stocks: Darden Gobbles Up Ruth's Chris
Also on Wednesday, Olive Garden and Red Lobster owner Darden Restaurants announced it will buy Ruth's Hospitality Group, which operates its namesake steakhouse chain, for $715 million in an all-cash transaction.
The deal values the Ruth's chain, based in Winter Park, Fla., at $21.50 per share, 34% above Tuesday's closing price.
RUTH stock soared 34% Wednesday, to 21.48, a 12-month high. DRI stock eased 0.2% to 151.47.
Among other restaurant stocks, Yum Brands, which runs the KFC and Pizza Hut chains, missed Q1 earnings estimates. The restaurant operator posted a 1% EPS rebound to $1.06. Sales gained 5% to $1.624 billion. Analysts were expecting EPS of $1.13, FactSet shows.
But its spinoff, Yum China, crushed Q1 earnings views. The holding company posted a 186% EPS rebound to 69 cents. Sales increased 9% to $2.917 billion. Analysts had forecast EPS of 46 cents.
YUM stock fell 3.9% to 137.31, falling back in the buy zone from a recent breakout past 133.87.
YUMC stock advanced 1.3% to 62.57, as it attempts to rebound from support at its 10-week/50-day moving average.
