What happened

Shares of restaurant company Wingstop (WING 4.66%) took flight on Wednesday after the company announced financial results for the fourth quarter of 2022. As of 10 a.m. ET, Wingstop stock was up almost 13% -- down slightly from the all-time high it hit earlier in the trading session.

So what

It was a good year for Wingstop. Full-year revenue jumped almost 27% year over year to $358 million, pushed higher by the company's 19th consecutive year of same-store-sales growth. Impressively, Q4 same-store-sales growth of 8.7% for domestic locations was driven by a higher number of transactions, not menu price increases, which is what you want to see.

Moreover, 2022 was a good year for Wingstop's profits. The company kicked off the year forecasting diluted earnings per share (EPS) of $1.57 at best. However, it earned diluted EPS of $1.77 -- up nearly 25% year over year and far outpacing guidance.

With ongoing popularity (manifested in same-store-sales growth) and strong profits, it's no wonder the market pushed Wingstop stock to an all-time high today.

Now what

In 2023, Wingstop should surpass 2,000 locations worldwide. It has 1,959 now and expects to open 240 new units in the coming year. Combined with ongoing same-store-sales growth, the company's revenue should keep marching higher.

That said, Wingstop's expenses should also march higher and sharply so. For 2023, management is guiding for a roughly 24% year-over-year increase in selling, general, and administrative expenses. It also expects a 33% increase with depreciation and amortization. And finally, stock-based compensation could nearly triple. 

In other words, Wingstop's profits could be challenged in 2023. And considering it already trades at an extremely rich valuation over 100 times earnings, this stock could struggle to beat the market depending on the degree to which its earnings take a hit.