With 500 stores in 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 a lot of possibility to expand in the U.S. and internationally.
Wingstop, a 500-franchise chain, isn’t done growing nationally, internationally or right into a whole kind of business. Why not? It offers had eight consecutive many years of same-store sales increases despite a tricky economy that stalled a number of other franchises, which Flynn attributes to consumers trading down from casual dining to so-called fast-casual restaurants as they tightened the purse strings. “We have been for a very good value for what we do,” he says.
But moreover, there doesn’t are most often lots of direct competitors. Coupled with a powerful management team, industry experts says, which makes selling the Wingstop story to consumers and franchisees so much easier. “If you look around, we are the sole company that I are aware of virtually dedicated to simply wings. If you are taking wings plus beverages plus fried potatoes, you got 90%” in the menu — an exaggeration, though Wingstop’s menu is no-frills. It sells only wings, boneless and bone-in, however with 10 flavors to sauce them up, including “Original Hot, Cajun, Atomic, Mild, Teriyaki, Lemon Pepper, Hawaiian, Garlic Parmesan, Hickory Smoked BBQ and also the newest offering, Louisiana Rub.” Orders are produced fresh, cooked to acquire and customers will get a variety of side dishes.
Wingstop is a fast food joint. Buffalo Wild Wings, on the other hand, has become hugely successful as 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 actually consider pizza probably a bigger competitor.”
Record-high wing prices forced Wingstop menu 2019 to take 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 last year.
President and chief executive officer Charlie Morrison admitted during a May 3 conference call that Wingstop’s comps hike “does contain a bit more ticket growth than we would normally prefer.” This was running about for the brand with transactions, Michael Skipworth, CFO, said.
The change stemmed, in a few ways, from Wingstop’s decision to offer you 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 visit a mix shift associated with that,” Morrison said, “that have benefited the P&L upward of 200 basis points on food cost, which was great, but concurrently, put a bit more lift within the ticket than we would have otherwise preferred.”
Even so, Morrison said Wingstop were “quite happy” using the comp performance, understandably. Momentum carried through the fourth quarter into fiscal 2018, and Wingstop used an extremely strong March to bolster figures.
The organization increased its systemwide restaurant count 12.2 percent in comparison to Q1 2017 because of 22 domestic openings and six international ones. Wingstop wants to reach 2,500-plus units domestically and turn into a “top 10 global restaurant brand,” Morrison said.
Unit-level economics could be the key driver, he added. During Q1, favorable wing prices combined with 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.