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Wingstop raises revenue forecasts for 2016

Wingstop chicken wings
Source: Wingstop

Wingstop posted third-quarter earnings that outpaced Wall Street estimates and raised its revenue forecast for the year.

The company said its third-quarter earnings were 13 cents a share, on an adjusted basis, which was a penny better than analysts surveyed by Thomson Reuters had expected.

System-wide revenue rose 14 percent to $21.8 million from a year ago, just shy of the $22 million in revenue analysts estimated. In an industry where same-store sales growth has been low or negative, Wingstop's domestic same-store sales rose 4.1 percent.

Wingstop CEO Charlie Morrison told CNBC that the company is facing similar same-store sales headwinds as its competitors, noting that grocery prices and meal kit services were cutting into market share and calling the election a "big distraction to consumers."

However, there is one headwind that is specific to restaurants like Wingstop: the NFL.

Viewership of National Football League games have fallen in 2016, with ratings down 12 percent so far this season. While Morrison said that Wingstop is not "tied to sports as much as people expect," the restaurant still faces some impact from dwindling football fans. In particular, on Thursday nights.

"The schedule has not had the strongest teams on Thursday night," Morrison told CNBC. Weaker match-ups could drive consumers away from going out to restaurants like Wingstop, he suggested.

Morrison added that the majority of Wingstop's business comes Friday through Saturday and Thursday's lighter traffic hasn't had a large impact on sales. After all, 75 percent of the restaurants orders are takeout.

The company now expects 2016 revenue to reach between $90.5 million and $91.5 million, up from previous projections of $90 million to $91 million.

Same-store sales for this year are expected to grow between 3.5 percent and 4 percent.

"Our 'category of one' brand positioning and focus on unit development, revenue growth, and profitability are enabling us to deliver consistently strong quarterly performances, including a very solid third quarter," Morrison said in a statement.

In addition, the company noted that it expects to open 145 to 155 restaurants by year's end, up from a previous estimate of 130 to 140, bringing the total number of Wingstop locations to nearly 1,000.