Gross Margin % is calculated as gross profit divided by its revenue. Wingstop's Gross Profit for the
three
months ended in Mar. 2024 was $71.3 Mil. Wingstop's Revenue for the
three
months ended in Mar. 2024 was $145.8 Mil. Therefore, Wingstop's Gross Margin % for the quarter that ended in Mar. 2024 was 48.92%.
Warning Sign:
Wingstop Inc gross margin has been in long-term decline. The average rate of decline per year is -2.6%.
The historical rank and industry rank for Wingstop's Gross Margin % or its related term are showing as below:
WING'
s Gross Margin % Range Over the Past 10 Years
Min: 47.85 Med: 52.04 Max: 71.5
Current: 48.63
During the past 12 years, the highestGross Margin % of Wingstop was 71.50%. The lowest was 47.85%. And the median was 52.04%.
WING's Gross Margin % is ranked better than 52.33% of 344
companies
in the Restaurants industry
Industry Median: 47.535
vs WING: 48.63
Wingstop had a gross margin of 48.92% for the quarter that ended in Mar. 2024 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Wingstop was -2.60% per year.
Wingstop Gross Margin % Historical Data
The historical data trend for Wingstop's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Wingstop's Gross Margin %
For the Restaurants subindustry, Wingstop's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Wingstop's Gross Margin % Distribution in the Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, Wingstop's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Wingstop's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Wingstop (NAS:WING) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Wingstop had a gross margin of 48.92% for the quarter that ended in Mar. 2024 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Wingstop Gross Margin % Related Terms
Thank you for viewing the detailed overview of Wingstop's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Founded in 1994 in Garland, Texas, Wingstop is a restaurant operator specializing in indulgent bone-in and boneless chicken wings, chicken tenders, fries, and recently chicken sandwiches. The firm's footprint has grown quickly since its inception, reaching nearly 2,000 global stores at the end of 2022, rendering Wingstop the 40th-largest restaurant chain in the U.S. by system sales, according to Technomic data. With a 98% franchised model, Wingstop generates the lion share of its revenue from franchise royalties and advertising fees, with the remainder derived from a small footprint of company-owned stores.
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