WING - Earnings call transcript Q1 2021

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Wingstop Inc. Fiscal First Quarter 2021 Earnings Conference Call. Please note this conference is being recorded today, Wednesday, April 28, 2021.

On the call, we have Charlie Morrison, Chairman and Chief Executive Officer; and Michael Skipworth, Executive Vice President and Chief Financial Officer. to conference like to now would turn over the Michael. I ahead, sir. go Please

Michael Skipworth

Thank access posted should first Everyone website you, welcome. and have Relations on earnings A at ir.wingstop.com. Investor quarter release. to copy the is under tab our XXXX fiscal our

performance includes uncertainties future that differ our results are discussion could guarantees today statements materially not numerous to we statements. cause forward-looking Our subject currently from forward-looking to These are of and and expect. what risks actual

various describe results Reconciliations such We certain substitute we measures filings Our are could operating to non-GAAP or Presentation in that that should release. considered be SEC contained as in our information future useful risks our for in and affect measures our in be financial use a performance. believe prepared evaluating earnings condition. can isolation GAAP. comparable of results GAAP not financial with accordance

results the first discuss will the X for we of weeks preliminary Finally, quarter. fiscal sales second

of results procedures today are not, completed discussed change finalization pending have closing to differ results second actual materially. and for fiscal so sales subject course, We could quarter, preliminary the

follow-up Lastly, as allow like session, for that a ask please as keep the call that, turn the to to a and question many Charlie. we each participants question. ask possible X would to you With Q&A to I to over

Charles Morrison

during for first you, experienced and a Wingstop Thank XXXX. of fantastic carryover incredible We quarter had we Michael. the momentum a

results well brand. an strategies and is growth far for recovery our pandemic COVID-XX we strong be glad to see the over, underway, fuel the continue economic While are to appears to from that long-term

for history restaurants, a of strongest our of quarter translated quarter, brand, beginning commitments over growth representative XX.X%. to we commitments growth to development development the first opened year-over-year this year. XXX Same-store with of represents our of we our a confidence which acceleration Wingstop new an X-year an guidance as record to all-time year such, providing first XXX We fourth achieve highlighting the unit growth are the sales XX.X% And first that growth restaurant quarter this in of the in record ago. from This During XXXX. at comp, in This XXXX. quarter, is anticipate XXXX, unit pipeline unit compares our levels by XX%-plus grew new XX.X% XX acceleration. net the of new

many the just this our of parts well to in of believe birds are, mitigate period chicken elevated successfully Our suppliers that our as to has continue bone-in struggling, pressure resulted combined franchisees industry unexpected placing profits can wing which allowed the the are record for that million, in cash-on-cash unit development. we these to created restaurant thus average restaurant The with brand have yield our high people spot in in X-wall land-in average in with chicken growth volume in that processed prices wings average prices of likely inflationary us be under acceleration supply as efficiencies unit supplier prices. all $X.X We negatively below to of value the for on amount investment partners, despite XXXX in excess our $XXX,XXX, to U.S., hire affecting are strong the growth have can in just initial an the of and market XX% chicken, our generally have not our relationships process volume returns be We P&L with our prices. for of partners, wings. that in are fueling

increase same-store However, to profit of in have our at our these partners higher X-year thanks current strong XX%. more wing we brand believe growth an sales prices, than dollars, seen

we employment people near and to of a of mid-single-digit our number domestic tailwind long-term driving for growth. drive as positions pull same-store for economy right amount have sales to and our of is on focused continue accepting a now, fueling we government in brands, strategy term almost restaurant remain sustainable to to significant target all a on we the growth X- there stimulus levers sales X-year open While avoid deliver

of has a robust leverage increase Our fueled enables of the users high the digital a unique growth customer database mix in architecture over XX-month which us to to XX quarter. to levels to over Wingstop totaling first retention XX% our of million, CRM

know on XXXX channel know comp. convenient Wingstop weeks of ads significant surplus our these we placements, work quarter with have during advertising X-year stimulus are in dollar their drivers support, the positive those first domestic the get same-store the guests from pointing X at a coupled we focusing We the and And to quarter, of of deliver premium of sales advertising And also drive acceleration to more all amount our put wings. that the national represents end first to remained an the our to for moments and government multimillion dollars which TRPs crave working. as second delivery

of and by markets, are over the pandemic the more continued also the with pleased which, our have like impacted international We been other strategic recovery performance global past brands, year.

strength. a in position timely validated have our and will we can markets which positioning markets position operate brand strategy, a XXXX off-premise in premium focused where The be can helped investments to events in business. emerge Our in growth high have these of a XXXX

our Mexico A our similar Digital is to technology take to encouraging will over level development we strategic translated in An market sustained at brand and in global, platform. the with yesterday investments the results our stickiness like growth positioning. into first to resources U.S. few making off and our to significant will dividends a we platform. guests pipeline digital of the has market success and seeing And As in markets sales validation been mix very a in have best-in-class contributor yield off-premise example won't which they has markets of and the digital high future. been such, XX that the This supports we experience platform of high of infrastructure, in something progress to is XX% premium the leading over the strategy well. business is our in stop year, XX%-plus. very take intended has focus plans announcement our the restaurant platform which significant exciting the a next is paid digital Canada be our restaurants our years. domestic U.K. we've Canada pay with The expect international over to above to in to the and new continue we strategic have efforts. Wingstop past But sustain years, be our this new of agreement development parts our past XXX demonstrating other our high-quality our world. to Canada.

operate to We is and to have a stated approaching of competitive brand. our having standpoint digital solutions global global a give believe from and and We goal foundation advantage. us will a important these protect every mindset a believe it investment restaurant digitizing Wingstop a transaction global

As this a our our on capabilities result, be to we are we'll doubling in and investing technology area. down elevate efforts

on the next will embarking multiyear to take digital capabilities We level. that are our project a

significantly platform second, and modernizing invest international expect XXXX first, platform; best-in-class a the plan success globalizing During ensure to digital advancing the intelligence capital that this leading for and a we we in alone, experience. and transformational our invest million the to over years, elevating business; end-to-end execute for third, center building to customer foundation In approach. to to establish for business $XX domestic next X initiatives blueprint around: our

in future. growth. We're and that investment a not to platforms how hard is point at this over that continued will our regret the brands of well our protect really after our I'm but time not invest. and the Now into must about future instead, us believe digital our our unwind laurels, all world grow long-term for fact. rest gone it excited the critical another brand to the an efforts making and such to inflection have we before We our is leading position investment position believe on business multiple realize and business

of will confidence same-store our the million ahead. opening last We sales XX%, the our long-term focus more that of and that, like confident With than partners remain X-year over as journey AUVs net our brand turn XXX strong in in I'd of on Michael. growth to just road continue team X shareholders, restaurant us becoming call we brand. the members Our strategic continue XX gives global new units and $X.X reward quarters to top a to

Michael Skipworth

Thank Charlie. you,

wings the pricing are the in in put year the price our XX.X% due just comp unit year-over-year for our a effectively same. XXX well ago has year in million suppliers this compared XX.X%. restaurant and only release Charlie's noncomp year-over-year, lower the to the spot sales in on ticket remained mix $X.X market increased $X.X growth but base. above last data-driven than restaurant and paid healthy by the was approach also the market wings we outstanding we to first the due franchise saw press implied remarks, to and percentage more but relative the growth are revenue Cost of wings over As as we cost enter helped value. the place franchise fees which year. net a company-owned since We perspective, relatively grew primarily both had driven quarter volumes price the the strength was to as X of due of same-store million. combination mitigation first this wing by all seeing million points $X.X XX% Bone-in largest $XXX,XXX, generated XXXX openings The into the in Not of sales investment and vintage of average while royalties, sales average they increased same-store by restaurants, of To effective transactions to from quarter. poultry strategy volumes Company-owned sales XX.X%, of growth. increase XXX and our increased sales comparable domestic other of period, with to basis to menu you an

see remain on offset some producers, a elevated other model. we of food of believe lines, is very our in costs, wing amount prices largely we we see the marked labor of for to shortage were of Importantly, the expense and that pleased poultry that of XXXX. labor labor efficiency anticipate could and leverage the we by demonstration both helping for inflation fueled a change stimulus, government balance strength of in operating a Until the the availability

to For year modeling our costs for be expect food for fiscal restaurants approximately XX% we company-owned purposes, XXXX.

As saw our change SG&A clarity made release, our into on provide in core more SG&A. our you numbers reported a we likely have to

forward, moving associated both period our for periods fund annual revenue of in as P&L, to line the for advertising provide We no with headcount-related provide convention expenses apples-to-apples will our comparison. with into SG&A, national Also, prior a the have on clear expenses effort gross picture well reclassified offsetting the expense advertising current equal be on core the in as both and presented P&L, revenue amount the an longer again, brand partner and to SG&A. and an

came little we for we see a SG&A lighter a environment where as As area out in technology, anticipated there particularly we top the first than in competitive area the are talent, investing. quarter, had of an for

income, We expect each guidance, However, the Please year. or Toolkit for previously expect provide the advertising no fall had for for periods statement the quarterly and Investor throughout our cadence to for our SG&A in to prior adjusted mentioned. prior the These Resources flows. for to additional as recast the SG&A but we information to relatively advertising-related amount reconciliation of guidance do headcount site the balance to we on national reclass the for presentation. of within this impact consistent a to balance quarter be refer IR under operating sheet Investor year, when year expense cash of consolidated not conform

on handles build the investments brand to over combined grow $X and enabled sheet The of annual stack billion result value. to shareholder a in in which make investments Our technology ability technology sales. asset-light digital have balance enables to now our with world-class us cash the digital model, industry-leading results, strategic continue platform, the people in a our as to maximize and necessary

approximately significantly capital boost of heard you will support these from tech investment to that digital, form be Charlie, the have $XX largely As kicked capabilities. million, and business expect to a this in intelligence we off XXXX, expenditures, initiatives. our we In multiyear project

project. guidance SG&A Our this associated expenses contemplated has technology with

square approximately over we've building. noted In the not Wingstop's investing foot growth, attracts live have we environment made phase investments daily a an of XX,XXX us just As people office this our on positions are top core our state-of-the-art who year, basis we the million in it's the supports tech capital is over it's years, XXXX, are And a we $XX past XXXX, values to space our in stellar to next ensure strategic acquired behind talent. performance. that and

space excited and brand. are have pride that in have to we We represents a growth Wingstop the the

guidance. Now turning to

value the are in We compared same-store this of target for fiscal adding our of XXXX. release SG&A through guidance and noted to shareholder we remain targeted morning, expenses, are free returning estimated reported year shareholders estimate now which As to at to XX%-plus XX% cash quarterly we million advertising prior amounts and which include estimates and between year for million the for We stock million Note $XX.X in these sales and approximately is mid-single-digit $XX.X dividend, between but be be our reaffirming And growth flow. convention to $X.X outlook. and growth to continue committed XXXX. our X-year X- expense, partner XXXX. unit million of driving compensation exclude capital to brand $XX.X million to $XX.X domestic is

Our This be stock. X million, on as totaling common to has dividend, $X.X of per paid XX, May declared share a record dividend June stockholders XXXX. Directors Board of of of of $X.XX will approximately

We the encouraged the strength extremely business Wingstop continued model. are of by

Q&A. balance like call and well global that, and beyond, achieving continued believe a XX for the As the over brand. we becoming top vision growth we of ahead are restaurant XXXX turn of positioned our I'd look With to to we for

Operator

question Instructions]. first from And will the David Baird. come Tarantino with [Operator

David Tarantino

Congrats about supply start lean to and is dynamics question great My on the your year. costs a the around arrangement.

So the that around Michael, that's think to you you food quarter. XX% the be year in I first to did I guess, mentioned expected and your what for close cost you

meant kind is of balance you that year? the the when to to in continue that if of might contract about you place expected is change? or arrangement the so, could supply And that that might arrangement So imply expire for have talk

Michael Skipworth

is we we our going that, suppliers. got everything continue the poultry David, thanks with mitigate us, times obviously, to with of of comfortable but roughly additional have whether inflation we we But food can for we're us around or real I or particularly going and cost stimulus the in. cost. for But any question. further are assured we you these do that suppliers. our implications the that here for and labor the we to partnerships Obviously, ability feel X And right we've will think, our think food of confident factor, to I think unprecedented supply, And strategic Yes, the we're there's I to impact as for today question is on to of there's going we're on the again, XX%. the labor sit stimulus. the number into to whether be market, not that the lean to if not manage market guided feel to

David Tarantino

some in wing P&L that's unit And Michael, by being franchisees. enough. the of your the just then franchisees psyche cost you affecting the how in affecting rest talk or the investing can obviously, Charlie continue about of offset not leverage But to costs, and of development? or willingness new inflation their wing elevated Fair maybe is for

Charles Morrison

mind. -- think are David, to I things keep of in a couple there

about relates year comment haven't balance is years. -- to what prior Michael's before. we of If level we on be those not in you We've that as to that something it reflect seen the seen cost, expect food

wings done partners. prior with work And impact strategic by recognized of inflation. our more with and in the we've Barry associated In the fact, cost is to mitigate we've think I chicken Urner our important suppliers years brand seen to the P&L wing

and a fuel like business. line, I in is this $X.X generates is years to in bottom believe the cash lot think significantly we that, AUV growth and we dollars more than different to had inflation the second growth achieving we our what prior million the continuing AUV saw when which to

but the absolute combination the growth those and the both I the the think are there that growth in give the to important. AUV us algorithm dollars continued Yes, substantial of what in So seeing. I is confidence is line of bottom think we're leverage,

David Tarantino

Makes sense.

Operator

Andy question with will Barish from next come Jefferies. The

Andrew Barish

if -- guys. of color first offer you is little every the the XQ more XX%-plus you're quarter, off Hey, if target. Wondering domestic you the the building. but good the I can development straight business, highest, a mentioned it. you're as this Even you're well still you on a typically Congrats through cadence quarter, know line on to start, above of pipeline bit development kind year. the about thinking

of kind I last quarter just guess, wondering and if forward first into back, pull from moderate. the some pull year things So were or there then

a more on Just color cadence bit domestically, little this year please. openings the of

Michael Skipworth

for obviously, saw little this associated would yes, cadence, year. shutdown that. fact with at the is we restaurants the was QX a also pull that Andy, There the reinforce year. forward last XXX pipeline. start beginning different over the our was development in QX high, pipeline the expected some And of year we the record a of complete strong, the in of extremely at But some in

in So balance see year. the development throughout fueling do. We won't that We third fourth guide never quarter, an quarter but is strong even for us. the strong towards XX%-plus number. that our our and a see around a is We little typical the softening usually

guide side I and, on than last cadence little think plus of our hence, year the why is different So do the is a XX%.

Andrew Barish

the to mark exceed to you to the which kind follow-up still back of that get a Do last at side running pandemic? to of XX% prior things, start. or of were bit year's little expect levels openings just a on And international then was a off Okay. you gross quick

Michael Skipworth

gross expect those We little excellent the But in their which think follow associated those be did now and we've from is restaurants. some the consistent up And consistent would to an is done of strong. We emerging to the the closures of openings net important activity note suit as it are we're seen years. the be pandemic do impact prolonged the years. It's pick question. The in specifically pipeline pace, expect quarter. markets expect in and metric, starting the of prior these the bit development past. with the are We what seeing what with to first a that. some still basis, more prior to gross with get of But a number most with closure on down I we've we Yes.

Operator

The next question will Cowen. come from Charles Andrew with

Andrew Charles

Charlie, about your XX curious And in a stimulus versus from temporary been jolt XXXX. recognizing, industry last spoke days confidence how comps quarter, for you this your last that you said, rate ago, in aspirations now impacting month. the over there's you mid-single-digit aspiration the as

Charles Morrison

long-term our Well, near I'm comps confident year. in yes, -- guide term mid-single-digit still for of the

we make really this the commentary what performance. to many of other that I especially some that dollars the note or sure knew placed then, one, date brands, we've is that believe this in as strong not X-year when quarter-to-date industry strategically but levers we we line, could last the positive we had into the now. time it And from well, in that top fueling there indicative year. is, made would And seeing think we pushed our of parts just seen pulling we make -- hard lap in frame which as stimulus of so occur. you're advertising quarter tough that to during I sure acceleration what caution impacts the to this the performance, couldn't so it's many reinforce. everybody all the But of obviously, with during predict We fueling of to is year's that right and we surplus the other that really a are We coming an stimulus knows only had course, exactly only results QX. those think

will our to how in look outlook, knowing into very this so to we're of an when the And will impact stimulus top note going stop not line long-term have we even providing But confident for on year. balance that especially feel market the the the related year.

Andrew Charles

the Okay. long-term other one was apologies curious mix expenses mix operating the the was mix how saw or the in mix helpful. of but What half sales your just relative XX% if in sales delivery before that I was that on that XX% out to the of so back from running do And term, the XQ. pandemic? decelerated if outlook. this, meant was follow-up then And of saw foresee what longer immediately that delivery just I XXXX. XQ? you missed better-than-expected settling That's -- We of you

Charles Morrison

the in running pandemic, the launch of ever was mid-XXs the been since delivery beginning also that we've Well, our and of nationally.

put year, were last during we ramping have costs. delivery of would and to impact did QX of our an in food P&L We the the strictly any performance in to prior because on The see of we not quarter. the still strategies up place strong So mix are affect shift P&L. sort delivery. mitigation results top That line the

So long make that delivery will technology term, don't the drive back been, to for grow to noted continue a as where over expect in we time. going to reason. has digital we subside transaction to to which be believe of sizable transactions, are portion any of investments expect a it We we those to digital pre it pandemic it and already we were

Operator

will from with The Oppenheimer Tamas next come Michael question Co. &

Michael Tamas

allow your quarter any your mentioned digital you your through about put business change you in what that part a sort changed forward? highest tell what achieve does You Or really that Is it of platform. you couple building can the going to a is about first the manage it you how last of that Has trend? this over talk to And then customer can context? And quarters? big retention in that? way to been you that, maybe saw of there

Charles Morrison

often over way new days of they're that is business. we into customer that's within few how coming XX higher to a levels, the -- we mentioned come think database Yes. fast. levels now. had measure you. seeing they we've a the last this customers thank we And that And if number fueling last retention the so are quarters are The new substantial back Michael, that growing I our business retention

bit have placed who So been sure we our they on about little that a are. making efforts know

seeing we in aggressively very to information back to cases, can that performance. that invite starting some guest we before. momentum gaining even because we top append we line I better. Wingstop, get them but signs have albeit once on think quarter, frequently have not many that, their meaningful them believe so it that will those if a So preferences we more we impact guests to than we more see, than early, understand a our And of be can We'll are just are a a can

quarter. lever to pulling. strategy it, a is and a early effectiveness the big So place start applying first of seen resources second during the we're we We're it have and take lot to of that

Michael Tamas

and early that about much whether And surplus you of qualitatively of surplus or talked last you Is extra how any XXXX the some there of that Awesome. year can quantitatively? way either up frame using worked then part advertising from over you've used, here.

Charles Morrison

later first used it, September October, million into $XX the September carries in and the August, Yes, big now. around media qualitatively, half We right from do window, I'd X was which the June. one then around into we're November. in that early carried is starts late balance on what surplus -- the other say. We year year More sheet. portion roughly carries than a the And year. One through and large Madness into windows in March late right a starts of

this put throughout dollars moved but have in more year. them So the those of we we deliberately quarter,

Operator

from Stanley. Brian Morgan The question with will come next Harbour

Brian Harbour

already on similar first the the the question to Will look the know Maybe markets approach stores kind Obviously, the and market on and kind look international in. But approach agreement. of I to Canada to some U.S.? similar the to markets kind the approach different. there certain of trade stores you of And how differently be just you're compares just will curious very those U.S.? of

Charles Morrison

in think and the look I U.S. to be similar their Yes, they'll of terms feel

blend in strategy first. I think we've and Canada a what in for for instance, market of penetrating be like metros the terms the there experienced will U.K. of, the major the

U.K., perhaps like restaurants include alternative in those a street we like that. surround see And ghost location the by that followed formats series You'll did high of a could kitchens.

that only U.S., not of is the in a that adopting we're as always we've one had applying strategic we've learned but well the as strategy Europe So some thinking well. in

Brian Harbour

of perhaps Great. just investments will going you be of kind headcount a the Is talked increase? to what a out? cover spread buying software question of -- of kind Or kind And will be it you'll on pretty What that is substantial Maybe something terms in technology about. what do this you versus hopefully building? that year? it you're will be more

Charles Morrison

that platform not And with is some we expenditures to project. do parts it is of Much year. called this that stack SG&A to software we in the and component and Michael we as our tech yes, headcount, domestic mean, tech we parts But expect well, with parts stack involve to, And into for a involve additional single is to a or approach, which first connect It of -- attention providers capital develop leading this software. for APIs forward. in may component I move We it our a factored be we outlook will acquire this globally. that is the already. scale will -- that develop one develop the make global internationally. year the stack multiyear sense, our this sure scalable want we want to We be, know Yes. rebuilding component will

the that parts component our And the years will brand get some years for done. that be parts a So I'll a from And for will well. in make to journey brand next will of intelligence continue to this both our our that that couple of transactions. will applications that. underneath as headcount partners, best-in-class overseas. and of technology will of relates we Also here it customer-facing take into systems incorporated the our we us platform is And few can support the in all infrastructure this that investments on as incorporate necessary that information to the robust as digitizing of some it the gather as a as say the U.S. well towards continue that us business

Operator

come Chris will from with question Stifel. next O'Cull The

Patrick Johnson

rough This an from it's possible in reopening beverage I lower on of if the thinking about And Chris. quarter attach? sales curious for quantify within could was give that, is dining if you the Patrick impact you're maybe how to rooms. on and update Michael, margin

Michael Skipworth

Yes, sure.

rooms, I relates system a positive, I are and support restaurants we're earlier have that impact a partners quarter-to-date the to in them think rooms. that I to on shared comment rush. being and suggest we results dining dining where do think not about think, really We really requested the I QX case we've results in material The as it the approved overall there would fair There's our business call have roughly out. and the mix. not the

and business. a your and leaning of a hearing anything, off-premise to for from model or don't that second really your supported material kind for as we're what if expect would part the our seeing to future I results. it's the of partners smaller question, case box about even I into change So know brand And the

assess situation progress And so immediate to through we're going we're not year. rooms, our reopen rush the to continue to any and we hurry in and monitor as or the dining

Patrick Johnson

terms just anything available staffing a just of issues. you're might be seeing that We within follow-up then anything And causing delivery drivers pertaining in any one or heard not there. having the That's helpful. potentially meet to about curious to if lot And issues Great. delivery. else demand DoorDash

Charles Morrison

Yes.

is stimulus staffing on wage challenging market of if it. huge certainly by that the all aware by rates way fronts, the for fact we that's are will, this have you creating that difficult comparisons, driven We

And so our know particular, with demonstrates think, But business. staffed keep been experiencing they've drivers that's DoorDash been our anything not supporting the able it. that they've in impacting business. business to we're I challenged performance, by and overall, I

Operator

question next Rothstein Goldman Michael The come will Sachs. with from

Michael Rothstein

maybe more We you $XX.XX whether shift have continue that saw And to that pressure. done are I test bundle mix how to bone-in little menu. the that size the wings. on more that a consumers of your to I So and And -- guys in I you to had you guys guys bone-in about of want a offset looking had kind launched affected menu. boneless amongst learn know has quick the we was wondering bit

Charles Morrison

bundle over Yes. if for, on little driving mix impact mix that's been and and in wings. years We've off our in boneless place not had that a effective. a wings year, of bundles X the been And the the more bone-in on of It's does in years. over a that an It system. like have gosh, over

still driver good of customers bone-in us some of a our shift the cost. wings. off it's mix as So at the day, But to see end the and take like pressure help food they Wingstop,

The in embedded. impact numbers so our is of going And it's embedded project that that we forward. food cost

Operator

The next question with will Sandler. Piper Joshua Long come from

Joshua Long

if expected, accelerate of TRPs sort Maybe able or those that and placements was you the update then heavy users curious I Wingstop same get more a and if that? to frequented on of to you've customer Analyst also allowed be that's very there at comment ad QSR Day. curious have segmentation past. this with access And talked opportunity the to the them might the of the rate some about getting customer that. of for the you segment could nice that terms was helpful. would in there to in I'm or increased if at in not that We just leaning progress access QSR into digital been your you attracting

Charles Morrison

the last by been user was that advertising or that either Yes. heavy just Definitely, or doesn't over use our clear frequently. us driven our of primarily new target X Wingstop hasn't guests. tried has acquisition QSR year for And as growth our

And also so is now all these is their increase then frequency, in. that new quarter are our is only and platform. in our well. And working but our we pretty key of frequency about in rates which We've not those engage part part users consistent really believe quarter we're seeing coming is To them something out. of new -- to and strategy, But CRM talked our users bring that platform. our it's a it's leverage job what and

retention first high. have in rates to the XX-month improved our demonstrated As quarter,

is So that clear.

them Wingstop Our advertising at alternate QSR clearly is for into as bringing dining heavy and needs. pointed occasion users those an their

Joshua Long

comp the year to for if very posted in of exciting. about that to the comps I of can the obviously cadence we here may, which second XX% quarter? us And clarify of progression positive prior you think date 'XX, one the is just that quarter, follow-up, the When of XQ period, you kind near remind

Charles Morrison

comps, a the some last XX.X%. in grew rest through carried you same-store our by and quarter. frame, did extraordinary give To during note QX, that sales of we of second a place far QX Yes. year, we climb then the taper started able that. it big comp, we April levers into us and And that time the this of But to to experienced to And second perspective, quarter mountain And I had was north think that do that to year. demonstrate we've for being been in XX%, right so all off.

Operator

will The with Truist come next Bartlett Jake question Securities. from

Jake Bartlett

about was you're bit and there. being to made Great. change in little starting by and any Is question My those traffic change check any Or kind the check whether of traffic? a normalize dynamics? up seeing

Charles Morrison

Yes.

because of immediately those the purposes, and was higher that we with delivery when expected, we with were bunch impact transactions. over the lift all seen, eliminated away average of replaced and occasions, that As started last transactions pandemic we have we associated intents and dine-in a a that shift carryout rolling had, ticket from and smaller dine-in saw year the check Jake, for

without growth slow down, note today. we strong see transaction So but as growth the the did well seeing performance, are business as And check expect good, we're opening... I'll lapping in to we that

Jake Bartlett

reopening follow-up below the can different anything the of Great. could are markets same-store doing? Any are context you is say where materially if regionally? And then company's then of franchisees my on the the And points that, of maybe is comment you on Different in there? why maybe sales at obviously the variances economy.

Charles Morrison

Yes.

Plains much of Wingstop out stimulus. would very a was that call be but impacted effect, negative primarily variation. for only say, typical So reversed think in I and I regional quarter Texas one over had the that lot the winter The would see the Southern a storm by the years, first the to we don't

was didn't during meaningful to that that this constantly the see call But So restaurants, see play all regions we the time to frame. otherwise, net those performance time of attention growth to company of the regionally, continue frame. out we restaurants two positive our of through to company-owned across the

to because average Vegas. company-owned most Las tend than they're older our Dallas restaurants in be just like However, mature markets restaurants, of these and

the the So bit their I as don't performance to a of of be think indicative may little otherwise business. compared softer, that's rest but anything

Operator

The next James from will Sanderson question with Research. Northcoast come

James Sanderson

users, a what deploy to clients as have new sense the increase especially clients engagement, this users then down digital frequency I lap of little wing you these if some strategies through going I And a follow-up. of to government or of and in to whether or growing drill wanted number wonder to they're stimulus. could us are, try do you're database. we on your who more heavy I bit get give a

Charles Morrison

a about our was users that of net we mentioned seen To lot reiterate asked new heavy QSR a users definitely target question what Thank profile. earlier, and I think for have as that you, Jim. fit these business, I the

uses more core so we're QSR just them -- higher were customer than our tends our pure than a large new heavy for income counts. in in be core an user growing our and a target attractive platforms We're user bringing So Those little to numbers. the QSR does. user and brand, even

Our strategy one-to-one those our to to occasion encourage to incorporate repeat retain platform, to that guests provides before, them mentioned back is to days, to as certainly and which come a which messaging goal them them, first times convert as within X to many in as our And Wingstop. is quarter. into use us a might in, user, but heavy XX to get CRM them

as So are high our place. well And are a strategies XX-month our They effective. rate. on in overall we noted, retention

James Sanderson

Okay.

new the relatively your your clients? way Wingstop idea the at are engagement system these Wingstop would that users up into to to right it? time. be to have light move as Is coming over them So And look

Charles Morrison

Yes.

James Sanderson

the current for Okay. just date to in Is wanted to that compared And stores company-operated year? the also period. I comp flattish clarify to prior

Michael Skipworth

disclose We highlight not quarter-to-date $X.X it's they're it's didn't this XX whole because system of focus, Obviously, the Jim, the we company restaurants area is million in or out doing primarily and want Michael. to number. an AUVs.

talked to is the is here focused the going of that And the our earlier. our we're kind health franchisee the feed about continue long-term help on which so really, system, partners, development base, to really unit broader what of brand we that's pipeline story

James Sanderson

question can see the relationship to just regarding more quick If to Understood. on rates royalty I are that development, the I Canadian one know... comparable we date? add your rates

Charles Morrison

They are, yes.

Operator

from Brooks The next question King come with will Associates. Todd CL &

Todd Brooks

striking looking on to expansion. those highlighted the structure of this deal access you this as type the that structure announced early international with the this franchise for looking was and that First, of larger the up follows after Are countries were week, you're master other type deal of Canadian Canada? to as drive kind in

Charles Morrison

master agreement. We it development are. a We would call

sub-franchise operator deals. are considerations develops market. the no There restaurants single and that one these it's opens specific So in in

Todd Brooks

a And may. second then Great. I question, if Okay.

XX% how of wing talked just different and fiscal inflation Barry. you've of the mitigating the on the with about think increase virtual new those When that into the Wingstop cost quarters ability kind with persistent Urner are a into and this? dealing it that asked entrants flooded the this of been costs cost brand in You of that that your wing couple across to wing has competitive turning type pressure success people with entrants discussion new about type mitigate that has that you brands, category of 'XX? to some it's do drive in expect over wing you seen raw advantage the discussion, Do out

Charles Morrison

has if go case, we then the And Again, it margin shoes the were I excellent something do that's these probably question. of that process rate elevated wage to other the and brands, But will impact that into dynamics. to material Yes. of the I necessary And blend are much to creating some an actually balance I'd for to other if expect wings the be the It's not to year. one stimulus some the just competitive nature. the off chicken I for do the in them prices, But of similar. is that, say structure. is artificially will back that very competitive chicken. difficult of government of people factors with quite their should at desired do high take an competitive It these the pressure that

in with. of the absolute Labor now. chickens dealing pressure processed why that business number are we're are sandwich chicken challenge the That's is And real on and the shortages see even so you else right being down. everywhere

of suppliers reopen there's goes of would does And market some grow on we But so buyers very we of and market economy Because own. and have down we to those the with on and to opportunity chicken back with pressure at affords that Wingstop the large a them continue alleviate I demand with the wings. product not will great chicken not make volume in only itself just to our business but out sure have its partnerships that our And reasonable our adequate before. dealing be think strategic us that some positioning, subside be drive again, when the wings get supply there to price. always operating the as for there restaurants

Operator

with Saleh from will next come BTIG. Peter The question

Peter Saleh

I of the your on update through is now website, conversation around your an versus the coming how you to us own partners? just your mix to want Can give delivery come delivery. back own much app third-party

Charles Morrison

XX-XX been hovering it's Wingstop. marketplace around to Yes, the

consistent So it's our that's been -- mix.

Peter Saleh

they customers? come do follow -- those? to see. to customers Are data you well? see Great. any know through they the could the crossover in the do don't Or that, crossover do DoorDash, coming on And any see if you get unique? I up website are you Are them between there if Wingstop just as guys I

Charles Morrison

But little if price come they which more the platform is through than they come way wingstop.com as established they enjoy we've through the I we're the Well, this, think a website. desire to will come through that they competitive What Wingstop pure I say marketplace. our that bit agnostic through. a

more that more the platform our them them would submit And to an incentive through also so we creates the Wingstop for use differential our through will marketplace. CRM efforts, than I pushing Wingstop of and price be that, into platform. And

Peter Saleh

Excellent.

how marketing So that the just shift of we going Is how to should we try Wingstop? should more little mix you be that? bit so understand shift forward will Is kind a that that? that lastly, and towards

Charles Morrison

CRM is Yes. social be always as market advertising from Yes, paid we've wingstop.com. our Wingstop and always well marketed we platform. That directly our would to -- pointing anything TV in in also as

So we always point them there first.

Operator

next The from with RBC. question will come Chris Carril

Christopher Carril

those are any any capacity updated company wanted level. I curious I'm AUV, topics significantly $X.X system now throughput. capacity implies more in improve throughput above and thoughts to million remains on the thoughts about And So that gap AUV the restaurants? specifically? updated and to Clearly, ask between to efforts around hear the AUVs system any throughput

Charles Morrison

restaurants have Yes. past corporate-owned $X.X our see in believe restaurants. existing our we mark above where We've the million capacity we the that to times even go the many commented well

at I above As very industry. million same or our of unique of at tell they restaurants right to Wingstop that. are highest handful $X.X the restaurants over applicable annually. you that platform grow. continue levels, do curve, a this mature our are can can operating to out It's we What time, volume There in is, a

we we volume, and space number we or we to can don't a very -- deliveries restaurants know leverage more as week the have that efficiently. have So that small we We each capacity that can throughput the issue. of get increase

capacity we that domestic So constraint. AUV way a before go hit long we'll a have to in

Christopher Carril

growth? commentary Got how item then sales, the just maybe you're then the just SG&A, thinking investing help this to around to longer on can technology line this in reclassification light expense up advertising relative just term morning just us frame you it. about of and just in total to of related and noted the system And you

Michael Skipworth

any pointed expenses. We've shared had, core out, to you as where this anchoring backed as any comment well expectations Michael. national around Chris, Yes, around G&A, we convention-related the headcount out related is advertising as we've historically historically

from noncash back out as do removed well. been have those Now the compensation also stock-based number, we but

core number, roughly number a more SG&A And kind that target of to so you system about benchmarked really brands, is that but sales we've think around we guide longer X.X% we it's that term of to to. when the mature get how is

Operator

come will Vaccaro question Raymond with James. next The from Brian

Daniel Docherty

just on Docherty to Brian. a back international second. for for on Dan It's growth wanted I circle

you the of mentioned with of market pretty the prolonged closures. as conditions pandemic? think driver of the pandemic remain kind the your internationally prioritization I certain fluid you Are of geographies as adapting sort dynamics

Charles Morrison

That's is answer Yes. yes. question. The a fantastic

in the off-premise there very early we're what have to I'll China and we just strategic we over mix. develop the in we're year expansion talked And should fit about for ago, a one, indications Number shy And go identify things. a prepare right the markets would that study recall may a highlight the know which efforts doing is continue few a having our in which That's year U.K., in to U.K. -- we there. like work with that. the markets ability to success to little for and which from. to us one our sweet spot. aggressively a our Canada, big archetype a in away lead positioning we did premium Canada, to globally our You a high ago great

that Now mix some markets of closures these fit didn't are that we experiencing perfectly. markets where were

closures. harder markets premium we part, that that Southeast we price will where stabilize the the Larger for for enjoy further long that some have in markets where restaurants sit-down-oriented entry of be or into experiencing are the challenges most are so us, Asia, that's markets parts to don't will Mexico, But in position term. the grow challenges. And and price enjoy our like that continue we've expansion for Canada, we Europe U.K., had been are and premium and some where us

Daniel Docherty

just missed any then for provide you this, one guys And if but first did the quarter? item. Great. on the within sales cadence I Apologies color

Charles Morrison

did not, no. We

Operator

you call question-and-answer This Thank well as session our for today. concludes for as attending presentation. conference our today's

may disconnect. now You

Wingstop (WING) 28 Apr 212021 Q1 Earnings call transcript