WING - Earnings call 3 2023

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Wingstop Inc. Fiscal Third Quarter 2023 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note that this conference is being recorded today, Wednesday, November 1, 2023.

are Kaleida, President Chief Senior today Officer; Chief Financial call Alex and Vice the Michael and Skipworth, Executive Officer. On President and to now would like turn conference I to over the Alex. ahead. go Please

Alex Kaleida

the Thank you, Call Wingstop. Third XXXX Earnings for Fiscal and Conference Quarter to welcome

results morning are our earlier available this at Relations website ir.wingstop.com. published were on Our and Investor

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

various SEC filings that Our future our operating and describe risks condition. could affect financial results

as non-GAAP We substitute in prepared with of certain useful information our for in GAAP. we our accordance comparable GAAP release. Reconciliations financial in use or believe contained such can considered be measures a measures that earnings be are should results Presentation performance. not to evaluating isolation in

With the would Q&A for I like [Operator Michael. that, to turn Instructions]. to over Lastly, session, the call

Michael Skipworth

thank you team who call. I'm after leading talented a morning, at It such honored industry-leading to Good results and time exciting for year. delivered year Wingstop, and an be is our joining

Our AUVs on year for continues momentum and are same-store and now brand. million, consecutive true Wingstop transaction XXth to the average sales growth. double-digit growth, underlying health we of see our a track of $X.X sign of our

of across even vintages than started. opening This we all more and growth restaurants when we seeing fact, momentum quarter are is the In consistent with exited our stronger. we are restaurants, new

of acquisition all guest across new We record levels are achieving channels.

frequency. an to us increase average our are continue we with seeing guests core engage Our in and

our and the that up show are the has been team laser-focused Our scores. seeing within operational excellence we guest X of walls restaurant on in

into supply for record Our on strategy for pace is we a are development. year translating industry-leading unit and working, economics, chain

recently held brand our partner annual convention. We

beyond Wingstop, of which the results us to the Wingstop and for one, to and is business, The accomplishments brand year sales XXXX our exciting than a an strategies accelerating focused While confidence are demonstrate into on on it reflect more growth, against to road our in in results our partners provided deliver exceptional year. our date. opportunity we ahead and our truly we visibility that same-store of have category is give after and maintaining best-in-class growth. returns sustaining even

We multiyear have explained increase that how entirely both third this in almost million. by giving was sales these guests to third year, we us In our the against during Eats a last north nationally, That year, to the believe executing sales XXXX. of drivers, well $X Uber brought the the strategies we lapped showcased Eats transaction. quarter XXXX. are delivering brand we second chicken X These has new strategies chicken expanded add XX also continued and platform the we momentum was sandwich or delivery same-store driven as XX.X% Throughout growth growth. our quarter into of sales half of we growth Wingstop technically into of launch this are chicken launched sandwiches. sandwich, AUVs confidence of lot Uber clearly the This and

To during QX incredibly our further quarter the acquired this guests launch of more chicken XXXX. point, sandwich past than we successful of we new did in

over new positioned to indulgent, consumers consumers higher-income is visits, introduce to loss has the higher occasions high-quality guests come gain consumers have that is QSR those as that industry, price the them even and Wingstop more transaction dining We are occasion to brands. lower-income to has many into or contributing our down And appreciate trade years. unique uniquely core pull for not in an from Wingstop. back that experienced that significant inflation industry But frequency

for growth is to outlook business we to in same-store seeing as approximately momentum led us our sales exciting increase inflection at Wingstop are XX% XXXX. brand. a an point our The domestic

grow in $X have to working our on strategies path us and staying of Our positioning million. excess power, well AUVs are

We record are achieving levels in metrics. health brand

Our XXXX, acquiring year first advertising giving a fuel new the advertiser, the to national drive continue it consideration. fund our us size as was guests Xx top-of-mind in is and

While we are reach levels making building to restaurant other the remains opportunity great significant our awareness progress on of national scaled awareness, brands.

Our time belt year proving learning Many a the chicken new launched lot their are and a of sandwich, along with other more. effective, guests. purchase we our them purchase these these proteins. sandwich is half our they're chicken in new navigate helped occasions. positioning win has are of experiencing the a second a creative sandwich media guest visit of their up our but strategy to first seeing returning flavors first around of brand About we visit, and Chicken with menu guests create more sandwich under highly in consumers effect our our September. for breakthrough halo for is link are about new in With and only the majority rest

are Their in are through right the us boneless of sweet attracting income Gen share they and The guests guests. acquisition Z is billion of our chicken servings digital the platform. of likely and we stronger X.X households there's U.S. of average or guest increasing engage guest our This into and our than the our and runway of new as plenty is new spot Millennial, look existing to retention tends us in ahead And gain their to with less existing in translating frequency. to new these sandwiches we kids ordering mix higher This be tend our consumer ticket brand. have guests, for to are annually than fair middle

with not sandwich. is But chicken new just our it

across guest channels. acquisition We strong are all seeing new

Wingstop maturity. weekly for transactions and awareness to last channel DoorDash. to double close see Eats, Uber the a with initial Uber at in level the since of have continue We we as transactions launch to average see of delivery We Eats growth launch the And opportunity year. sustained nowhere are point we that's another a build delivery

our best-in-class we around which also $X we making are believe to to While our are will AUVs, category million-plus help supporting about platform, these path are X the of progress digital moat protect the excited scale position. we to continue strategies our

third transaction. mix digitize and record the a During our to XX% on every our achieved aspirational at goal remain we new quarter, digital sales focused

took million to and protect database We quickly that $X step system-wide AUV enable to to $XX that X years This tap ago has our a digital begin growth. build into new further serves platform. investing purposes: our tech business in users of than XX capabilities scaled proprietary billion sales unlock more to X digital million investment our

in an that XXXX. are we improve in within conversion deploy built I'm thrilled our most QX and our retention hyper-personalization restaurants, tech us for positions with in believe platform a share frequency. we Our the proprietary testing modern phase ultimately tech to of level launch stack pilot stack. will rates of will drive We platform our which increased that now technology a anticipated

as part for scratching same-store are our We the sustaining sales just strategy see growth. surface a on we key and of this personalization,

to positions on Wingstop. strength be which and would construction have our of accelerated AUVs into XXXX of economics for pipeline. XXX to growth deliver visibility record units, a this our at development The unit our XXX in time us The year are pipeline into our guidance we new net translating

ever. We development expect exit at XXXX highest to our level agreements of

costs clear target of line to predictability XXXX and we up strategy sight chain food that proving have highly with brand range, mid-XX% for is effective be for our delivering supply our of into Our lines our partners.

Not XXXX. for X,XXX mid-XX% range with our in corporate We've global for million, based current big brand restaurants, is our driven than payback in international the on markets a growth strategy dissimilar from restaurants U.S., in are are a And double-digit the story having mid-$XXX,XXX part set is the X and by example margins the of range industry-leading footprint. transaction partners of Our AUV more Xx over of system an great At international experiencing comps investment target mid-XX% our an the our growth. comps, the seeing of less initial $X.X years. impact this than business. its range, are food

U.S. the U.K. our executing record our In years hitting first market, is They're restaurant playbook ago sales volume. opened that similar a X to

in restaurants awareness. such opening, building are are and that including Korea new stronger, an markets Canada New as

signed newly And our within partners believe development potential international our next business pipeline new is quarters. continue growth. of open Rico, business to X and brand our for the supercharged Netherlands expect We Puerto to is markets, strong. I

Charities. With I'm the this awarded cause, tremendous communities proud in Hungry past our A Wingstop the the ESG so in Kid what tenet third to we increase year. growth grant organization. of in back our where of the incredible over Charities business core made prior of giving of strategy from accomplished contributions September comes $X.X to through Wingstop over -- an of serve Charities million far to months which more going support this has XXXX, team in than responsibility. the roundup was August Wingstop No a the able quarter, In in and XXX% program the through XXX% year. is

every our of Kid grow X helping The Wingstop we No to that's the meals America to has strong. communities to many help to youth. will support up child one Hungry Charities the No is child Kid ensure they serve. and and just single is hunger food to Hungry's provide need million in This mission contributions the ways end healthy provided

Wingstop we next about couldn't As a in our is growth. the I momentum positioning category one call, our mentioned now. I at the of have and our excited start strategies phase in for right well of us be are brand more of the

we repurchase we model to total past we have Our and shareholder strong in excess share to flow what return our commitment our returns. program, industry-leading provide announced delivered are highly we Since million franchised This asset-light XXX%. returns. of allows shareholder which free further a $XXX our believe IPO, enhancing inaugural quarter, cash generates demonstrates shareholder us believe

underlying into best-in-class growth being and have The great been industry-leading supplier work economics. and of offense. it's heading with these unit strengthening our with their in sales I team on for members, thank want our same-store to brand by transaction our dedication is partners We and continued strongest momentum deliver health the partners hard results. brand the to fueled XXXX that's a brand

like that, turn the call With I'd Alex. to to over

Alex Kaleida

you, good morning. Michael, and Thank

third is multiyear million was $XXX.X $X.X a increased transaction to million Total third and from strategies million by to the fiscal primarily driven Royalty designed in by achieve. domestic from revenue revenue year prior revenues, clear a the same-store due franchise sales quarter $XX.X The almost increased other reflection to XX.X% benefits are of and million in quarter. openings, increase $XX.X in growth. franchise fees restaurant entirely QX, which our

in the totaled in increasing in QX, million XXXX. result our Company-owned in strength growth X $XX guidance due increase our growth, approximately same-store the sales new same-store company-owned XX% million to to $X.X sales, restaurants in an driven versus from to a net period. of transaction sales of comparable increase XX% X% entirely almost we year As primarily XX% a are restaurant prior by

restaurant of reduction the by and ] driven compared food, unit quarter, our restaurant of by margins model. the prior strength XX.X% packaging cost as sales basis a a to XX.X% showcasing costs, percentage mainly which Company-owned sales the were decrease in for economic improved of the included Cost of company-owned wings. points year, [ beverage XXX in a bone-in

to executing mitigate a track make strategy of our continue sales on this costs. year food to progress year. we shared outlook deliver are prior XX%, of in with cost chain And consistent full approximately we our earlier supply the volatility We to

costs, shared partner translate bit into At we generated approximately quite food for our convention, company-owned which of we recent restaurants food would XX% to visibility cost. a with excitement our XXXX brand the

XX% we system. our is the excess for boneless strategy the just mix, by This a record a in believe our compares of at mix low are supported development a Our new will for continue brand a which low to target XX% enhancing few level, of boneless best-in-class restaurants. level our structural to further cost increasing in we yield could record for making believe our years a We food partners, ago. change fuel on XX% a returns XX% progress mix now to boneless

in the business. versus performance-based quarter, stock third an incentive million, the strategic The increase of result million in projects our compensation of the to and and support well as totaled period. In growth investments year performance of an increase current comparable prior short-term quarter as included a as $XX long-term the headcount SG&A $X.X

X% leverage anticipate we As target of to are SG&A as we scale, the percentage sales and to continuing in range. system-wide greater long-term a a SG&A in our investments X.X% seeing

nonrecurring the items, the Adjusted EBITDA, share, of prior measure, year. which period. prior for year XX% non-GAAP during million per the non-GAAP $X.XX, in a versus prior is on diluted increase adjusted EBITDA growth we Adjusting a of an top increase quarter, versus was year, XX% building earnings XX.X% of $XX.X delivered of the adjusted measure a

of shareholder we exceeded accelerated capital stock. inaugural our this that our share shareholders. to announced our into Board demonstrate program. Wingstop August, million $XXX In repurchase repurchase returns an to total our returning authorized have To demonstrating share further Directors commitment IPO, entered agreement commitment, of repurchase to $XXX Since common million we XXX%,

which is at share final remaining approximately million $XXX quarter. September Under the an is stock, of total any representing company the to XX, this XX% shares the as transaction, authorized its will scheduled fourth in remaining XXXX, repurchases of ASR The end occur XXX,XXX at common the of QX. of agreement, total for of delivery shares settlement be the delivered. The of amount shares the estimated expected retired

of $X.XX as in common XX% per regular quarterly paid This will our November Board which a free total of XX, quarterly flow. XXXX cash approved on of of is X, dividend $X.X share approximately a On Directors component return XXXX. October dividend our at of resulting dividend, Another our of targeted XX, is strategy XXXX, million. record stockholders of be capital of stock, to dividend December of

combined Our ability growth highly our financial share our to support shareholder on regular with new underscores asset-light in strategic initiatives. our flexibility the model preserving our sheet enhance of while repurchase returns program, program, dividend balance our to strength franchised

the which outlook be unit for outlook growth range. our $XX million midpoint SG&A million XXX in net $XX projects million. construction is from increase to to prior we on XXX we of of and to $X.X represents nonrecurring on $XX.X our including our are our have reiterating in new to stock-based to performance to $XX accrual million quarter prior million units, $XX.X XX.X% million guidance based the Based unchanged estimated development incentive Moving guidance of our rate short-term compensation from our business at pipeline, $XX in visibility our support the estimated an strategic is which of consulting guidance. XXXX. of and initiatives, expense, of between million an

I want exciting at sentiment earlier. echo truly to is Michael's time be Wingstop. It an to

building our considered increasing guests macro brand be globally among are what scaling the awareness, Wingstop's position. and challenging frequency against backdrop, brand of a one category We showcasing could

continue the for you partners and world Our all to strategies staying industry-leading have results. confidence serve members, Thank to power our deliver the and our efforts team us to tireless brand to flavor. partners their give supplier

I'd open that, Operator, now turn like With to Q&A. to please the line questions. for

Operator

question first from with comes The Instructions] today [Operator Jeff Bernstein Barclays.

Pratik Patel

for on on start Pratik is This with question guess I I a off comp. can Jeff. the

You've higher and rates, had of number obviously costs, seemingly a well. student payments, is as being headwinds loan strong lapped quarter consumer growing interest very another rent with despite pricing

double-digit Your seem be growth, mostly your results fourth implies driving quarter to guidance of transaction unique quarter and another among you growth. peers your with

And the all you growing you despite headwinds? what have momentum I strength? do such to seemingly And sustain the attribute follow-up. of kind do Just how a

Michael Skipworth

for the you question. Thank

I look our said occasions new excited our think with of we chicken an of which we're there's growth a it's things which uptick as no we're well see guests think and back in as data, is clearly the and for really of new on winning their than a our making what what as come more pressure seeing at of I of menu, lot occasions, brand, business industry consumer. remarks we're in We're frequency those that effectiveness Obviously, there's out. handful the about. seeing navigate rest But is question our we that in winning just call Wingstop mean, strategies. of is more guests our acquiring and as delivery. you're But unique would ever. I we prepared more sandwich I yielding the really can

win year, back they our want where and it's consumer, do we I shows in or talked XXth indulge, years, guests occasions, on there growth, for fact think where up way. XX we've themselves to have a consumer, in pace really good when particularly and pressure that this almost save plays Wingstop is about see the up the to years and we tendency a showcased that Wingstop that's pull on same-store treat And consecutive over delivered and on that is the we've we're is well of lower-income really and high-frequency where more those sales

in and about. excited with we've so what's And retain -- those in low-income what And this the we QX quality been slight able years, was consumer, to, uptick in our in over frequency saw which occasions. business actually we're think indulgent pretty saw that a interesting really I we

pull we're dining dining And then at that home those winning we're seeing the time, potentially same well. occasions, at more. on as out And consumer higher-income back occasions

so really all that's, And of by we think one believe I is advertising strategy, that working. effective supported an

in of We our growth deploy, of more in show to have showing a placements with to live fund breakthrough an shown up roughly coupled NBA up like amount really We're investment up allowing way. sports, excited ad elevated NFL now. about. in that's growing consistent we're in And the XX%. big our new system which premium us creative, We've That's with sales right

it new seeing we're they -- highest of see of share that with makes when intent new consumers levels one that purchase the associated the with The us creative. that things top And of them creative some hungry. is

Wingstop. lot year that saw us we'll which the record that and will TV enjoyment XXXX, our And laddering And finish growth. a to think all be confidence so with that how forward strengthen up through we really on food transaction continue mentioned, gives of in to we national we progress another for quarter, our as drive food of us we as showing is the help business

Pratik Patel

all demand I And outlook terms costs. know growth, any I kinds any to in to going unit shifting maybe borrowing stress for on your give guidance Are higher of along. developers the you today, consistent of you're obviously amongst any, qualitative been That's And macro, very not just but that. has helpful. just guess, comments slowing I appreciate seeing XXXX? potential

for color kind what on seeing now you're XXXX. any right Just of

Michael Skipworth

for in playing which think where reiteration would, I sights year about construction right we year XXX year a we hit for development our be are XXX into this development. track how XXXX, will excited on in we pipeline, the we about our obviously, pipeline And for thought outlook And absolutely. restaurants, to look our prepared we to of mentioned we're sites have and this have new a a as our or we go exactly of And Yes, on pretty it approved number the the is we're momentum cycle, This in record shows supported agreements, of any on and record levels. the but that it's net we anticipated remarks, which excited are us, in development Wingstop. lot they of that metric that at, pace and demand. out

than frankly, X see our funding economics. partners called some demand in quite But are when seeing the lot supported in initial pretty our paybacks a a And And our with support I are from our partners initial think elements that less investment still strength brand that investment of headwinds of We mid-$XXX,XXX range. of lot that years, unit is a low we by of on flow. that system, these you macro cash growth don't existing out. of brand

interest high environment rate not impact. degree a that this might leverage So in system of current there's our

And encouraged we as our how so pipeline out is XXXX. shaping by we're up close

Operator

question is David . The Tarantino next Baird. with from

David Tarantino

tack hard really strength I over to the maybe I outlook. such to ask few driven seen has last the envision Congratulations growth question. time the -- you've gave growth results. levels long-term to Michael, business different were in outlook strong take economics that the on to wanted the unit you on the past years a unit wanted what

in unit past you're So especially differently guess, I the you in given growth brand. if wondering strength given about U.S. laid attracting than seeing, was any the the into just you're the strength, thinking new what out the I customers opportunity

recent based what any long-term the this years? opportunity you on So be you've thoughts seen year what might or on in think

Michael Skipworth

as obviously, David, the We've to those we there's in our in previously build around opportunity we like our we the the think of look I Wingstop that X,XXX obviously, those the to in confident over see economics, But thanks restaurants the Los mature continue up amount extremely stronger. here to the we that restaurants remain out growth. markets more the market unit of for opening question. front see to for U.S. pace for or that's continuing we Angeles, a Obviously, and with of we see opportunity as you those strengthening as Worth some the U.S. of And significant Dallas-Fort brand decided us, demand opportunity mentioned, of that, expand see original even improve. or in at strong continue really total markets, in development we paybacks our

an track, how that opportunity. do we in that that in we over the outside here for mentioned, well. we pretty X,XXX deliver as we in encouraged see size when will, target strengthening that us opportunity in remain which combine the outside then And we're The you the being is quite of as combines U.S. today, opportunity of U.S. have so sit And we're in, by brand confident we are to expanding you that here in brand the triple extremely to in for if on obviously, of our the for plus, business, is with today, lean able sit and the on an of U.S. we the X,XXX the us what U.S., But as to exciting. long-term really markets probably here which, over as is

Operator

America. Bank with Senatore is of The next question from Sara

Sara Senatore

a breast cost But with they've look a mentioned. some the a that food you on hedging. is up The prices, please. and like inputs, lot. a your nice I of callers I know even follow-up, when question question at or job come wings done Just quick and you've chicken

of Is it shift you of the sort or a mix have then because confidence more the it's as -- this some just the Or structural? maybe follow-up, boneless prices? XXXX. in perhaps in and increase hedging XXXX I'm towards of And a see understand trying input where So of okay, of is looks I timing to off, mentioned. so the perhaps after recent and I but some this plus that, your contracts impact then of roll

Alex Kaleida

Sara, us this enter is boneless and Alex. first -- of of our The factors prepared really made into suppliers. increase And us mix It's the XXXX into combination has the scale allowed buy to different and our in, shared pricing in our out conversations a has with size mentioned. have cost, our year year for of we remarks we food visibility which our our time, you today.

visibility excited partners below brand It's volatility the below Urner Barry today seen of when the year X-year average prices. into before which price it's our buy into us this arrangements But We've in mean, as our the X-year the well wing next still has something I the we that moved. well are average, really about. spot gives as market, place off have year. have moved

Sara Senatore

Got taken it. you've this I then think price, be or as emerged seem topic taken Is having doing observed companies other that that thing heard you I better. that concepts promotional environment some just little we've more very something on the price quarter have that to guess is of less the And well? getting intense. that's about

taken, something in if relative accumulated on that is much how the value So has to you've going that's it's there promotional more given price the just I'm environment. trying or if about less understand

Michael Skipworth

us, to I brands compete in that Sara, think it our bit the landscape promotional other there of I one and differentiation of we cook-to-order of competitive uniqueness quality. this and like that national offering into a get out or high maybe think plays our because with little value feel in don't the positioning of we for really have category and

that the spend for provides able out on us, think that occasion, that quality, where a an their indulgent value components dining consumers deliver and what are to where within great they hear and highest guest And for to feedback dollars. of that for that looking believe us are we're guests. offer they're X situation the And want or to rewarding we that some we we that so

And the mentioned with in quarter, that's improvements to I but And offering. our scores guests. levels improvements restaurants, after the great we also occasion. we've combination, on we're guest delivering by within value We guest we've the think we of for seeing But supported our record think right this our measure brand making think a a obviously, been the walls scores quarter of it's X continue before, now.

supports And things, by I strategies into And look that growth, allowing think, lean continue I which so if is XX.X% of the to of those our substantially combination we're to working. a then us X comp, results, are you driven think little that's at a QX bit transaction all what saying here.

Operator

with Barish next Jefferies. is Andy from question The

Andrew Barish

helpful. stack piloted could that's tech have look a a I on you understanding that, I as be bit but being and may that a would to missed just forward us in restaurants just clarification there, of if color now more the what's launch. wanted different to little just on you bit get little provide something 'XX

Michael Skipworth

we're change earlier, something that's our a even expand or technology. as an unlock advance digital digital and the end-to-end, modern to the where tech Yes, we've entire are business. proprietary be our journey we the this continue we And been able we consumer made mentioned our think is we've with and today And excited transformation really progress to and leveraging Andy, something step most build, to going about it's as stack. we

conversion, leverage going and like hyper-personalization ultimately will is really leverage and lean things AI personalization, to allow really impact database to this that impact into that us lean that's users strong And into frequency. I think over million XX

and excited to And be about towards so scale being that move in of we broader QX we're XXXX.. rollout, in which starting in would said restaurant really pilot

Andrew Barish

on customer one just follow-up acquisition. And Great. then

glean in gave of more of a bit coming the to guess something out you've that your Or to was get investment? little from? definitely detail the that on terms able of a your that You kind that. recently been little results on been with what's there all on new color tech doing been over going Is that more year. bit studies Just programs trying you've last

Michael Skipworth

Yes, absolutely.

allowed and our they record gain be prepared level And we XX%, as grow a with that's brand, guests and under where of engage having dine, As our visit. chicken more we've guests second brought that's how they mentioned digital look more of on then brand where to return on about to data us see able new into our us learn with to we they the and to that quickly at business year our a with understand our really them, in, how they allowed brand. belt what a sandwich remarks, on a our lot engage how buy lot they

a Gen and core. already beautiful which providing impact supply just support mix, we've and further likely less a middle to is their guests to that's boneless new we're to strategy. That's mentioned, because in, in their that our unit halo what the overall tends growth And which income, us it bringing ties economics is is directly chain helping And that ticket to we have Z Millennials, effect our be kids our home higher And at business. called those, than best-in-class. or thing more continued average which our are ultimately boneless mix higher, enhance to allowing is

Operator

with The Long next Stephens. question is Joshua from

Joshua Long

meaningfully maybe Alex, When that level been curious, and stores thinking of have the into we called inputs above mix mix or awareness higher? about boneless what's strategies just successful for out, just XX% engagement with has system. threshold that broader you been you've higher learnings that to in up category any in of the that of getting has or drive opportunity curious, think that sort just terms that what driving seen here about just frequency boneless now, that either to -- the And

Michael Skipworth

as Josh, we've question. food in plenty ultimately, that those north bit basis appreciate these the XX%, that's, system of of I be just interesting. higher could in average. made mix as it, the continue could see the cost of boneless. There's sandwiches. basis a as There's call restaurants It's win And It's we well. tenders XXX, today new as structural we statement And of more they have not system points at those XXX bring than of boneless change north to cost boneless in, of mix not that think we our food well enjoying a little lower it's a target. And occasions, XX%. guests these restaurants are what behind our we are drive more just restaurants, that we

mix occasions to long-term so for north And ton just of translate more it's driving these XX%, deliver and to just pretty of our win on us to It's of for unit will those will shareholder units ultimately demand line going development best-in-class continue us. further there's fuel a to continue us for know which XX% best-in-class economics, algorithm year, growing returns. to we after that go continue of which of to we for our believe which each us bolster guest allow we to over believe opportunity give exciting exciting boneless is partners sight to because that to brand

Joshua Long

you And come think your the power what opportunity? brand a brand come channel how across bringing what platform navigated from. customers of the channel around kind the third-party of maybe opportunity your depending terms staying own on around Is there the maybe follow-up, to particular time? all out delivery has, the you that about the seen the Wingstop-branded strength as onto we over journey, curious to you delivery in And customers able called being you've that commentary the through an have channels, in in different and awareness just drive when

Michael Skipworth

been really in see I in all growth brand. think really restaurants Yes, really channels. that's absolutely. well. for And advertising it's we execution that seen is exciting working, a the believe the really delivery growth with strategy channel. is us our healthy But is the for to the And exciting we've what's it's mean, demonstration I our

that. And really so we're encouraged by

really and we how as journey in investments believe really launch to we think advance wingstop.com as to QX And to for occasions, and app that's in way occasions, to think customize brand. control brand. unlock the unlock win we our about engage to an to win of exciting to to of their with more continuing going customer for really in more be kind that's e-com them to want or us XXXX, national this But we've be we our to tie that I continue an that go our to towards made a allows pilot think us makes back our of going

Operator

next The Harbour Brian Morgan is with question from Stanley.

Brian Harbour

Maybe, year? talk first, you certain next assumption pricing just think food when about run one quick costs where one. a Was you will there

Michael Skipworth

No.

around the supply our strategy. really around are costs we've against think food progress our comments centered chain made I

to year. X approach X that which each to pricing taken over disciplined X committed continue over the We to price we've that windows be of is had points years, to

Brian Harbour

kind years, do done in that creative of versus that, you of you Where key do you Okay. a And think awareness. do your media really be of exiting with placements? of in dollars? you've successful it's momentum clear you was And be budget you else ad X saw advertising terms think -- then new just think like you'd you where want X where the to has been I thought driver driving else September kind larger today where do about and that can If campaign in what deploy think the you to to you quarter? quite in think then

Michael Skipworth

thanks the Brian, question. for

fund we Xx in over I brand think it's as mentioned, as has when ad We grown, national interesting. was it launched advertising -- what XXXX. a our we initially

in we seeing you're placements these as it's and And think premium up spots But in NBA. up of there, game. even show NFL growth. to X only us show or I significant that's the allowed like us X So

to we've is runway it have are brand up is just that for that continue our mature and opportunity brand mentioned the to within there's in of to -- ton other about we where years, linear We the drive us over talked continue And to more of scale brands more national front show opportunity so awareness. TV significant. us a to and awareness

with first-party same But the more. data who to that just even in that a message, us. consumers right our at continue look to show up leveraging target as the being digital-forward think to at database show up with to into right who channel grow like those and the brand sales, that looking continues have we'll system we we ad And engage fund time, we lean leveraging definitely with

strategy. for overall continue drive us will to lean a yet -- continue we confidence working, in of to is But of runway and us in lot our front ton a have our is the key and the that just exciting what thing And be to part brand. and of strategy of still so gives a us

think And driving all aggregate and an obviously, of supporting We the are about ultimately working definitely are we're had the working that to we as concert QX, particularly the these we're in excited creative. quarter. now. we which industry results that But in results the is think impact an it's unique the saw we pretty that together really in industry-leading things transactions, right exited

Operator

question next with Charles Cowen. TD is The from Andrew

Andrew Charles

that I in on to in Clearly, is quarter, very a comps ability business guidance have we'll mid-single encouraging gives XQ next there also and you digits the of how XQ. anything concern the next XXXX reach guidance but commentary know shaping medium-term follow-up. year? up your get I is

Michael Skipworth

that results been the And obviously really wanted these We and pleased on Andrew, strategies we today. that we really, the QX. was call talked we with was were in to about seeing in digital important, that chicken executing expand more a to growth more the continuing scale really record levels or awareness thanks felt occasions, a something measure thing delivery awareness pretty channel advertising whether we've excited And brand occasions, and we've our saw channel. our on expanding against, it our it's highlight question. delivery national one for win from really it's guests sandwich, bringing to that's the even whether in via way brand us new perspective continuing winning is

we've being drivers multiyear multiyear And understood those, are, some pretty talked them it's about of pulled appreciated fact, lapped we levers meaningful and our in in as these we business. all XXXX, that for we that And drivers. hope that

'XX, of those further that it we as economics. and of we so enhance will that think continue million to to drive to know a north lot just have, And confidence AUVs for best-in-class $X which we us ball unit advance continue about the target us gives

Andrew Charles

Excellent.

free Okay. and sheet favorable leverage for authorized. the that free to conditions plan plan Great. And Alex, more for foreseeable use stock stock then, flow million is for the of looking Xx flow cash close Is the cash future target. recap of buyback? what's buyback still pursuing $XXX ahead, Xx looking versus even that, balance Obviously, X the historically you But have use you've the to to is leverage -- for philosophy to use cash beyond is become the done? until the

Alex Kaleida

whether debt the repurchases highly the quickly. strategies, balance regular capital our sensitive of year, operating that Andrew, to it's flow include we you we to about But dividend at that current asset-light, free a share ahead. we generation, work, or that's in. this But includes, bit are support sheet our delever of may also flow. free beyond yes, funded of free flow cash transaction franchised that return put we And think we're we can had the to model fairly XX% position strength which were cash I with growth to our uncertainty a initiatives cash as our opportunistic recall, last backdrop in flexibility made on last to navigate

growth think we to ample have and continue to we liquidity available So flexibility to strategies. those us support

Operator

is Citi. The Jon from next with Tower question

Unknown Analyst

It's to on roll actually John sounds then Karen Thinking new operational for that you're the there's platform Holthouse to about the customer today. it. like It hoping technology also second facing in quarter. analytical or to stores and pieces out

of capabilities? maybe could expand new on you kind the If

Just that's or digital do philosophically, that you do to service companies your about as other parties Kind a also franchisees again, third you of, that about to through talk for? of get or kind replacing per-order something being some capabilities about how that? philosophically, recouping Wingstop think franchisees. that's investments just franchisee think fees of paid part have fees started already in of And to how their should other then you

Michael Skipworth

to us believe allow will will occasions. excited and provide really we're more frequency. to about believe forward a to we mentioned, just think as we improve we're calling do experience And that the impact tech going built. win ultimately And it yes, ordering Karen, platform that conversion, digital experience, and Wingstop, what to we digital we've continue continue best-in-class we consumer My advance ball ultimately this it's also

we it brand insights additional visibility, which the pretty is the analytics P&L the sit our providing on restaurants more added partners, costs we that improve will and be them today. over is visibility will this, X right, exciting. And for further which time, deploy just deplacing profitability certain will we the into their as just more within walls you're help that -- of think And business

partners. to is unit as operating the is associated with the ongoing in neutral think we cost expect in it's we where about expense covered it. ultimately, we just by would long further enhance think this a the think our way P&L Wingstop, and the to brand it My we structure operating And right ongoing the their that And something And economics that's to term. approach over do will cost

Operator

Andrew BMO. with from Strelzik is Next question

Unknown Analyst

Daniel Andrew Gold is This on for Strelzik.

there off you texture one? link link buy is structured, that disconnected from is the moving noted spot-linked you provide how model prices? you've initiatives, on the completely chain supply there Have your still some -- can Regarding Is if spot.

Michael Skipworth

Yes.

XXXX. to food we've about position cost. in progress excited chain over year a for haven't prepared been think continue our that's supply the before it going in where we've this the be position on a in and it meaningful And into that made that's partners. food we puts what's us his in strategy. strategy brand designed see And something we're think our important work And strategy. a have to referenced as And advancing expect pretty -- exciting is to frankly, and that past remarks, is -- then Alex progress minimizing volatility I cost around in some for we've really quite I we're to we brand, made the what really we visibility

us, a it's think sides. works partners we supplier and with there right strategy that are for both great Our

think structural food change from we in to something the And it's minimize continuing today. more Alex would as And in mentioned, food buy ensuring that to continue to north we XX% a further just enjoy away in mid-XXs we can partners market, ultimately our is we'll of boneless volatility the see the move our sight which more brand forward. mix of costs. And today. and spot something so we advance of then that low And XX% bolster to that that to drive costs economics unit be could range, that those a line

Unknown Analyst

this on you your an pressure growth? to Right. you're there's I looking in a mix in delivery and update some environment. give And us factor driving growth how understand are in can that channel? delivery on additional drive there And partners

Michael Skipworth

there's the believe we're consistent we're I upside to little seen last to pretty up Uber what ticked and was maybe a channel Yes. in mix continuing it meaningful we've bit. a delivery. our perspective, growth amount of From seen that DoorDash by mentioned prepared remarks pretty encouraged that both we've quarter, mean, in a We growth in in it's and Eats, that us. actually for

good a it's non-digital those But digital channels, we're growth carryout. growth whether seeing thing channels, seeing we're in carryout, all still in because while other that's

across but channels, very not sign really that because is good we so seeing And is from mix for a think all a the thing of perspective, we're moving strength the think healthy a number that's which much, we brand.

Operator

The Company. Tamas Michael next & question is with from Oppenheimer

Michael Tamas

sandwich. chicken on more when Michael, It's your I customers up quarter new about impressive. you gaining did wanted comment launched you this to follow than first pretty

are to new a pull national can you 'XX and what the levers do dig new are you that gaining you customers? some into TV Or customers can How these little maintain momentum? it other So time? in bit Is first continue campaigns? reaching you more, beyond for that just how the

Michael Skipworth

executing was we the stat growth excited of just pretty And against. multiple strategies guests, -- think sandwich incredibly It able we're again, about. lap launch a chicken we did also that and to think it's obviously delivered be the effectiveness that than with more we're Yes. successful that an new really guests during of we're it's had XXXX, to We we these that acquiring obviously in we and excited time, about. comp

for tough brands expansion we looking and that awareness Wingstop continuing which know of continued more that. and occasion, scale obviously for are is quality brand the the think, a where is big as catalyst of to And indulgent And in really think where out dining continue industry. a puts it's we time us the to than in a navigate this spot to in when else to just different there, tend behaviors everyone it unique environment trend,

Michael Tamas

U.S. slowly the number And the units ramping then of outside been year building international on side, you're you've each the new

there's step sort that or you it's So change, that we of somewhere happen? see going stair Or look a step to should else? is continuing think a at to be there that whether higher anything meaningful China about

Alex Kaleida

domestic slower expect U.K. little year our to restaurants And future opening development, Michael, in the step, agreements to rates. opening into be years, and for the amount the the little XX international market, in to of years, under Alex. our International fourth playbook Yes, is its like tend and level stair continue our start fifth tend development U.S., we're we then or this to it's mid-teens which the then be X a restaurant ramp. place smaller they to they commitment. in is get where our a its nature In would construct of to way of agreements. X we restaurants bit a

little got open the average. restaurants that being market about a did a at markets are new ramping U.K. Korea building pacing awareness, X Canada that's with playbook. already up. that and And corner we're just to excited We've U.S. They're near and are we've like AUVs domestic they're -- their level and starting Canada the turn like a that really year following got just over in

we international, to on call, the of Michael I will So our as expect bigger much mentioned part though think over story. a time be

Operator

BTIG. from Saleh next with is question The Peter

Peter Saleh

did should additional another you'll the the know don't back XX to leverage come rates the more that little more still higher patient next great XX I we on to expect environment to this go message is from down here are your to current next over intention months? add move or quarter. on But a balance and over to around that really be until In appreciate the months. Congrats the I you for come of rates longer, sheet. we the environment maybe going conversation want leverage? Or bit where

X, And then know be also, that to Xx. I your used in target

about going were Or the the to get target or in your to that around Xx I so that -- forward. leverage. comments sheet we be -- to think think a Is around clarity turn closer you just lower balance now? should trying past, on some

Michael Skipworth

start I'll is, us get we is note, rate on and we at than the I optionality. into at entered also frankly, was a and the what better we into at the funding providing that time of a market pricing competitive variable extremely But entered that's a lot are quite think at debt today. can open and we exactly leaned in. to flexible. which in, We lot jump on be we Alex debt then Peter, a be where position And and cash in put balance referencing are. of I we sheet could think in what But the last have to to our a options refinancing

it in puts us be great so flexible and And a options. spot to to have

sheet. And flow plenty of -- our a with so balance free generate have ton cash asset-light the on being cash we We of model. as

we've think continue front to And strategy us talked changes we're based lean current so and But structure about. capital leverage don't from of our return that see in of where capital anything we're we execute our that continue just comfortable. think said, and levels a think into I against I us, optionality you'll of on to our in position to

particularly out, a rate, we XX% north when which similar about to quarter, delever year. pretty our the you for that's and healthy think mark when us number think just of this last growth you a combine for still which We strong pretty on of at, be was point top pace to at EBITDA

generation And our so cash to allows free with us flow quickly. that, combined delever really

front we we in so where have feel comfortable us. options And the and are pretty of about today we

Peter Saleh

just then the on delivery real partners. quick And

of good You both partner have so are and for guys changed Has trading the or metrics I customers with for indicated still still XX% back that anything individual you have sizable you'd think of delivery channels -- those maybe partners. delivery XX% loyalty those X to In forth. kind Is of as about the each use? past, grown? an

Alex Kaleida

not based we you is this we something when Uber cannibalization. -- hypothesized that had have point that we Peter, referenced we on some done had research Eats last But actually the launching data was seen with year.

weekly Eats DoorDash a as As delivery both on call, the low business is an from level our this and of with growing we mentioned in still standpoint. transaction average well, awareness we're marketplaces. Uber growing is very

for opportunity what investments into coupled be to to we channels the us fund focused some awareness, we're all going that's there's with so And on to new that channels. guest have our of these build doing, acquisition and across deploy advertising

Operator

comes And Jake question with Truist. our from today final Bartlett

Jake Bartlett

My I first follow-up. have -- and then a

first question incentive 'XX. that 'XX, initial driving make recur just is for I importantly, of lot gone being on is has assume guidance comp the guidance. I might G&A most in The sure a reflected what and to The the XX% not that's from up there's understand G&A. XXXX. is I what's accrued, implication about really, want

'XX? with in then kind base follow-up. be I can grow of a And you there if set level just would So have from Any us to great. help

Michael Skipworth

quarter incentive-based is the from in the our in the and Sure, to relates balance based Jake. in the increase quarter, factors that fees prior in in guidance increase compensation of -- the consulting were for one And accrual business. then X performance There's in it's on short-term million. our our $X.X X really the investment

of in that so lap. total, going we And year. consulting will nonrecurring fee reset into obviously, then investments And short-term about will the next XXXX, $X.X million for have incentive

with that's would we have percent more XXXX something and year. system in of G&A detail for sales, we'll next consistent I a in but see what as think about So XXXX,

Jake Bartlett

quantify. When you But a just where exposure, you're you're kind seeing think you an whether difficult it's if that? any think then of you ], work about impact how I'm any impact? forward. to And about know wondering I Great. going question done to Okay. had react there really would potential I it, GLP-X [ there's guess an be to you've the could I way your markets if thinking impact,

Michael Skipworth

of But level remain think guests widespread we group that sustainable the Affordability, today, Sure. ] where questions we impact relatively target not think strong which a results out to GLP-X win, the Jake, delivered by that still positioned. answered. I we're think, seeing that Clearly, there's are occasion as [ still our of think lot about I business adoption, there for. an is our be we're on we around well supported unknown. in we

growth going strategies our and to we're focused that on we're to strategies remain our And just executing against so continue forward. long-term advance

Operator

attending concludes This question-and-answer the session, our has concluded. and for you now conference presentation. today's Thank also

You may now disconnect.

Wingstop (WING) 1 Nov 232023 Q3 Earnings call transcript