With 500 stores in the U.S. and Mexico and its 3 billionth wing sale fast approaching, it’s most likely not required to discover Wingstop as Chief executive officer James Flynn sometimes does: “We are not Buffalo Wild Wings ( BWLD).” Wingstop, which had been founded in 1994 and began franchising three years later, has new private-equity owners and sees lots of chance to expand within the U.S. and internationally.
Wingstop, a 500-franchise chain, isn’t done growing nationally, internationally or into a whole type of business. Why not? It has 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 because they tightened the purse strings. “Our company is for a very good value for the purpose perform,” he says.
But most importantly, there doesn’t appear to be lots of direct competitors. Combined with a solid management team, skilled professionals says, that creates selling the Wingstop story to consumers and franchisees much easier. “If you browse around, our company is the sole company i are conscious of virtually focusing on only wings. If you are taking wings plus beverages plus french fries, you got 90%” of the menu — an exaggeration, though Wingstop’s menu is not any-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 could get a variety of side dishes.
Wingstop is really 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 any real significant chicken-wing competitors,” Flynn says of Buffalo Wild Wings. “We actually consider pizza probably a greater competitor.”
Record-high wing prices forced How much does a meal cost at Wingstop to adopt pricing actions in late 2017. One of many unwanted effects: Ticket growth that boomed the 1,157-unit chain’s domestic same-store sales an eye-popping 9.5 percent in 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 in a May 3 conference call that Wingstop’s comps hike “does contain a little more ticket growth than we may normally prefer.” This is running about even for the company 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 cost of boneless wings and conversely increased bone-in prices in certain cases. “We did view a mix shift related to that,” Morrison said, “that have benefited the P&L upward of 200 basis points on food cost, which had been great, but at the same time, put a little more lift within the ticket than we might have otherwise preferred.”
However, Morrison said Wingstop were “quite happy” with all the comp performance, understandably. Momentum carried through the fourth quarter into fiscal 2018, and Wingstop used a really strong March to bolster figures.
The business increased its systemwide restaurant count 12.2 percent when compared with Q1 2017 thanks to 22 domestic openings and six international ones. Wingstop would like to reach 2,500-plus units domestically and be a “top 10 global restaurant brand,” Morrison said.
Unit-level economics would 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 the company-owned restaurant margins. Same-store sales were up 12.5 percent at corporate units.