With 500 stores within the U.S. and Mexico and its 3 billionth wing sale fast approaching, it’s perhaps not required to identify Wingstop as CEO James Flynn sometimes does: “We are not Buffalo Wild Wings ( BWLD).” Wingstop, which had been founded in 1994 and began franchising 3 years later, has new private-equity owners and sees lots of chance to expand in the U.S. and internationally.
Wingstop, a 500-franchise chain, isn’t done growing nationally, internationally or in to a whole kind of business. Why not? It provides had eight consecutive years of same-store sales increases despite a difficult economy that stalled various other franchises, which Flynn attributes to consumers trading down from casual dining to so-called fast-casual restaurants as they tightened the purse strings. “Our company is for a really good value for what we do,” he says.
But most importantly, there doesn’t are most often lots of direct competitors. Combined with a solid management team, industry experts says, which makes selling the Wingstop story to consumers and franchisees much easier. “Should you look around, we have been the only real company that I are conscious of virtually dedicated to simply wings. If you take wings plus beverages plus french fries, you got 90%” of the menu — an exaggeration, though Wingstop’s menu is no-frills. It sells only wings, boneless and bone-in, though with 10 flavors to sauce them up, including “Original Hot, Cajun, Atomic, Mild, Teriyaki, Lemon Pepper, Hawaiian, Garlic Parmesan, Hickory Smoked BBQ as well as the newest offering, Louisiana Rub.” Orders are made fresh, cooked to order and customers will get a variety of side dishes.
Wingstop is a fast food joint. Buffalo Wild Wings, on the other hand, continues to be hugely successful being a part sports bar, part casual-dining restaurant franchise. “We don’t have real significant chicken-wing competitors,” Flynn says of Buffalo Wild Wings. “We consider pizza probably a bigger competitor.”
Record-high wing prices forced Wingstop menu 2018 to adopt pricing actions in late 2017. One of many side effects: Ticket growth that boomed the 1,157-unit chain’s domestic same-store sales an eye-popping 9.5 percent inside the first quarter versus the prior-year period. Systemwide sales jumped 20.4 percent to $313 million and Wingstop had revenues of $37.39 million (adjusted earnings per share of 25 cents). These numbers jolted the chain’s stock a lot more than 7 percent in Friday afternoon trading. Shares are up 65 percent ofexab the very last year.
President and chief executive officer Charlie Morrison admitted in a May 3 conference call that Wingstop’s comps hike “does contain a little bit more ticket growth than we might normally prefer.” This is running about for the brand with transactions, Michael Skipworth, CFO, said.
The alteration stemmed, in a few ways, from Wingstop’s decision to offer split-menu pricing considering commodity concerns. The chain reduced the price of boneless wings and conversely increased bone-in prices in certain cases. “We did see a mix shift related to that,” Morrison said, “that have benefited the P&L upward of 200 basis points on food cost, which was great, but at the same time, put a little more lift within the ticket than we might have otherwise preferred.”
Even so, Morrison said Wingstop were “quite happy” with all the comp performance, understandably. Momentum carried from the fourth quarter into fiscal 2018, and Wingstop relied on a very strong March to bolster figures.
The company increased its systemwide restaurant count 12.2 percent when compared with Q1 2017 thanks to 22 domestic openings and six international ones. Wingstop wants to reach 2,500-plus units domestically and become a “top 10 global restaurant brand,” Morrison said.
Unit-level economics would be the key driver, he added. During Q1, favorable wing prices together with the company’s leverage on labor and operating expenses resulted in a whopping one thousand basis-point improvement to its company-owned restaurant margins. Same-store sales were up 12.5 percent at corporate units.