WING - Earnings call transcript Q3 2024

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Wingstop Fiscal Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded today, Wednesday, October 30, 2024.

On the call today are Michael Skipworth, President and Chief Executive Officer; and Alex Kaleida, Senior Vice President and Chief Financial Officer.

I would now like to turn the conference over to Alex. ahead. go Please

Alex Kaleida

welcome conference and fiscal quarter third Thank for to Wingstop. earnings call XXXX you, our

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

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

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

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

we you to that the Lastly, participants please follow-up, allow session, for question one possible as Q&A question. keep as a to many a and ask each to ask

the like that, Michael. turn I would call With over to to

Michael Skipworth

We you, appreciate Thank morning, our call. Alex, joining everyone and good everyone.

Our another industry-leading benefits showcases strategies of that third quarter power and multiyear provide. they was the our the staying quarter

has our to I Before by into the entire effort these support into and restaurants I been their that in our achieved another results, our the for in not members dive want without and tremendous that to the record our team. Wingstop results thank I team could center, want acknowledge translated have supplier executing partners strategy long-term partners global quarter. our brand relentless on focus

sales consecutive was on same-store growth, way by growth, well transaction domestic of XX.X%, our record. unprecedented continues track driven primarily XXst our putting same-store which an QX sales to growth be to us year

our unit $X.X to million quarter supply has This ability chain $X.X economics. continues time. restaurants to million. to prior strategy, million in growth, AUVs fueling compares over surpassed our with This and to the strengthen just $X $X combined The in quarter, industry-leading confidence AUV our year AUV scale our for our last million now

The and demand in Wingstop are remains at to business strength average $XXX,XXX, cash-on-cash a returns of translated third investment excess life growth This we Wingstop And that where around development. partners community. partner record had overall saw brand the restaurant to in has unlevered the excitement for a a our record from our for quarter, come XX%. as to new level of open seeing in brand we QX

restaurants in a XXX over unit truly third XX%, opened delivering of We growth quarter, the remarkable. rate

We in roughly out translated which prior are of also brand. on the gates for AUVs the the strongest of vintage, seeing well development year. $X.X come year million This first at record pipeline productivity strong already new ahead the has unit the was into

now in of We the XXXX. restaurant and net increase target our of has again. community open allowed net partner restaurants between XXX to our to Wingstop The to XXX strategies to new brand effectiveness excitement our reinvest new us expect in

shared opportunity. AUV discussing we targets new quarter, $X global with starting million. and path a system for our AUVs total to those new our of minutes today I'll targets, target Last achieving spend few our restaurant

long-term over expanding in digital consist strategies us. our we growth years, scaling couple the data-driven pretty confidence past transformation. we awareness, of have we While remarkable menu brand have of and delivery These strategies the delivered to incredible our front in some innovation, marketing channel, of runway look as our

a Brand awareness remains Wingstop. huge opportunity for

with as the approximately be to is our very proving same media are leaning a scale highly effective. focused is sales placements, fueled And strategy opportunity that to growth awareness, of growing combined fund this being online system rate streaming in is our that media creative live by XX%. targeted ad at on breakthrough an into toward work sports and brand video strategy, we As and we approach

NBA and events, awareness, and major in the brand record are Amazon NFL as Thursday increase as guest Prime's us seasons pregame of acquisition. have You've up seen to placements These Football us helping show. show the media well contributed including and Night of levels start new

delivered quarters XXXX, couple moved and by the only of have same-store of in X the points, front opportunity percentage of we've growth us. we awareness brand first through we industry-leading While highlighting a sales have potential

year, platforms finding out we lot and reach ways dollars the going As on to new a expand We'll games partner. look invest close to to NFL more to and XXXX, continue NBA our NBA. to we're our be advertising and as this we're across NFL such

A haven't is of announced been major strategy. partner wing will unlock and exciting great in first access we week. able NBA, league. past professional perfectly chicken and NBA. now opportunities example sponsorship official fits partnership a new we an official the sports to The it our within the This our the the is official the last Wingstop with is within partnership

our The with tech earlier quarter quarter past our full marked this which proprietary first stack, year. MyWingstop, launched

be seeing excited results. what more the While we're early the couldn't I we're by in still in days,

before, the first shared was to platform, have we tech through moving the digital stack. operationalize of billion $X.X As over our step sales

operational brand team how we seamless provide I'm this digital Since partners analytics restaurant level proud for that platform a advanced introduced increased transition variety and was visibility our and have greater restaurants. capabilities of business insights drives of our the drive profitability. for to their that KPIs the launch, across into

will insights guest improve personalization. content made a welcome unlock only rich hyper out new the and We're allow with to time. focused website many of to experience profiles on now guest us developed guests we've beginning our level over optimize our app personalize further and included whole database, years. that relevant in on to investments the building of enhancements that the also over first-party MyWingstop We've that

increased product within prior featured Digital has database we at app more our user our now XX% of by downloads the During a and XX% app flavors level efficiency times, compared year. in or personalized than and are quarter, the sales both AI-enabled a and mix sessions, hit website. now and in measured We content. order record XX% first-party is improvement to

already enabling for and transaction. experience investments guests, while every digital our technology aspirational advance best-in-class our of goal Our digitizing an

$X I unit highlighted us further a AUVs, examples economics. path will our industry-leading million to which that in just our couple of give strengthen confidence

We taken the experienced that also in year mitigate volatility supply our is spot of wings, window commodity. full nearly market core bone-in effect. year market has XXX%. weekly peak This progress purchase strategy with tremendous Historically, we first in our to chain strategy have been inflation for spot XXXX made and the a classic the a to this had anchored

that are XXXX we and seeing flows million, continue of AUVs partners. to line our $X.X exceeding as And have pricing and Our to able targeted we of into with wing cash for our restaurants XXXX execute This, into coupled range translated have into of record been mid-XX%. level avoid our brand cut within strategy. inflation has food our sight

partners in unit XX in executing aspirations the a new a are scale record we highlight restaurants. market-level domestic feel growth, partners' will as a be brand countries. this as states have opportunities To trade brand of sustainable X,XXX-plus match with over XXX a our support unprecedented our and To And partners playbooks target our an pace experiencing opened their infrastructure. of result, this brand the to covering XX development, XX year, net showcased depth level for growth schedule, QX for breadth restaurant Wingstop. we that area we different are

known an of flavor to to long opportunity be by France in the recently called capitalized Olympics, lines continues make also that presence for XX million during business pop-up X.X on the Flavor. fire. flavor fans, showcasing pop-up big a waiting opening international We We venue, on in global Wingstop into the experience wings way to a in gave House days, first our Our the just to we of our with away time. wrapping around nearly get restaurant

we for amount will future this believe be in we generated, of expansion Europe. catalyst excitement event the With Western a

opportunity for believe we're Shortly deliver city recently restaurants a we combine we we our as first expand if we after the new more And these XXX development France our not France opportunity as can in continue The execute and when with restaurant, over in pop-up than -- U.K. markets building we and aggressive plan restaurants markets alone. towards Paris, we France. large, in broader opened signed, greater international what is other the to our across to

to for restaurants the clear expand XX,XXX as is brand markets, the international our globe. growth, international as we story across expect incredible responding we a wings we for super see more how partner to brand which the demand and than I playbook globe. to business our as charged It's across become truly scale growth are guests well part to of the believe our up footprint for have We bigger our as a pretty community from

announce over Before to I Alex, Wingstop. new a for call to partnership turn excited the I'm

our roundup from Children's of the donated month of St. Hospital. will October, During to Research Jude's contributions received XXX% program be

happening obligation drive remarkable, to continues give cure members life-saving St. as a The mission: to back childhood that our embrace our business grows our to is believe finding the will Jude's well. and and opportunity at team we brand partners, As contribute to fans St. is Jude's growth, industry-leading work for cancer.

be to record year for just up But feel we shaping yet, like are another is XXXX started. getting Wingstop. we

as we we and truly top an have It execution into brand. time at focused XX are global Our restaurant staying Wingstop. on scale proven strategies exciting Wingstop laser power, is a

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

Alex Kaleida

at of of Thank and you, here the and amount good morning. Wingstop incredibly front The is momentum growth energizing. in us

point proof Wingstop's Category another positioning. Our third results X in quarter are

Domestic the the also strength a This underlying true basis, and driven on AUVs which same-store driven translates increased by to majority primarily in health growth a transaction QX, by domestic brand. sales, driven by a of XX.X% comp of transactions, growth. in a increase million $X.X of Wingstop the demonstration XX.X% the includes X-year to

XX line fund same-store benchmarked fuel work restaurants in more the gap mature brands. when in This in system-wide our gives brand the QSR awareness sales opening to over against XX.X% growth a months, in combined to advertising third delivered quarter. double-digit XXX top with last growth sales us growth, This the

quality continue in trends. delivering we an restaurants high prioritize value hear Wingstop to are as quality their outlier offer consumers clearly we to While believe that is both they industry and and scores our relative experience, value from and as will

quarters. Our which achieving and restaurants, We X the net a economics pace the XXX best-in-class driving of new continue record each our our QX, growth, to unit strengthen, follows opened of which surpassed in for this prior set expectations is record year. has

best-in-class Our generated our leveraging brand from are more in are to the eager economics, and invest partners Wingstops. unit cash

of levels our openings development excitement A we testament is attaining as apparent are store XX% partner in strength that to our partners. from Brand coming great see to existing brand we record of is the our returns pipeline. continue

XXXX. development new net to restaurants, to XXX XXX we which pipeline us outlook net visibility to previously new restaurants to XXX our a for at raise our confidence gives today was have XXX The the range of set into

XX.X% of increased other quarter XX.X%. the by to $XXX.X for franchise by revenues, fees increase franchise revenue versus Royalty the comparable growth and million, prior million driven openings prior primarily sales in increased $XX.X Total million year. restaurant since year of an the $XX.X and net QX, period same-store revenue

$X.X net new Company-owned XX sales, restaurant transaction an QX, primarily restaurants sales company-owned by comparable increase and totaled million to the in driven year increase million, same-store $XX.X prior growth in X.X% due versus period. of a

supply been unit the year strategy, having our Over discussing our it's first economics. past on full our XXXX the we've and showcase marked couple of impact years, chain

As minimizing volatility creating centered costs. and a is reminder, food strategy predictability our around in

happened market range. price what as in the wings into year, $X just food and north XX% market past, could surged is reached this XXX% over bone-in spot have when of the the the inflation the well pound as per In cost for

the our with strengthening providing predictability supply today, our we unit economics. with strategy, chain are further execution partners our food and However, of costs, brand

cost the visibility in the have food a mid-XX% into be on we As our and we in also the among effectiveness we have at partners in pipeline. record continues we deliver the but our mid-XX% target brand are range this excitement average XXXX. of for to year. development costs demand to Due strategy, mid-XX% into food our The strategies confidence in system-wide fuel to of start that year, this targeted range, shared the to track

and million this to million, driven $XX.X investments of the to shifting phase also of company performance-based period versus headcount-related compensation by total we by growth. prior on our the a increased SG&A based stock in SG&A. an increase year Now next performance, $X.X comparable expenses position industry-leading in for by as primarily

per diluted the EBITDA, of versus year. we $X.XX, Adjusted during XX.X% the a prior the million quarter, $XX.X non-GAAP And an year. measure, earnings of a versus increase prior increase delivered was share XX.X%

Our model us asset-light, highly an returns. for franchised shareholder to is enabler enhance

which launched As in at $XXX a repurchase last was authorized inaugural of million. program, share year, reminder, QX we our

this quarter. and XXX,XXX our $XXX. of progress repurchased have the make inception weighted have we the year shares We repurchase share just authorization at $XX.X Since under third continue a current end program, of to average of million remaining the at the price over

our be stock. This $X.X cash to million, Board dividend approved strong November and due our combination on Additionally, December $X.XX per the a Directors remain X, of of through XXXX, returns flow quarterly of paid stockholders of common our XX of October regular asset-light our committed shareholder record share generation dividend, of to from will on program. totaling a to We XX, repurchases approximately XXXX. share model, as dividend enhancing

to XXXX. our for outlook Moving

reiterating guidance of domestic same-store are We approximately growth sales XX%.

compensation between million new earlier, guidance increase update stock-based million net for performance to discussed SG&A of guidance restaurants I approximately and between expense, primarily driven million, $XXX a are $XX million business. million, previously In SG&A in compensation result of the be $XXX.X including in as $XXX the addition and is million. to estimates for by The approximately previously our our $XX.X we updating $XXX.X stock-based

Our center the third achieve best-in-class for would thank confidence support restaurant quarter like global members, members, sustained partners fans and to a Wingstop. serve team results guest gives team while of power record experience. for flavor, brand showcase partners to our year I another us strategies, the our to continuing providing our supplier and

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

Operator

is first Bernstein Our Barclays. from with Instructions] [Operator question Jeffrey today

Jeffrey Bernstein

the first on question trends. just My Great. is comp

of imply, would been XX%. obviously, the had year you range, deceleration a which But it third be reiteration the and strong full to XX% X-year could quarter but Another to fourth a holding. closer north a the something seem quarter, for in does in basis, XX% of which the on be

slowdown, just could or again, attribute you you share different might by wondering comp what or quarter-to-date one internally macro the follow-up. something could I'm had doing comp whether potential obviously, be And So a the could XX% trends trying incredible it's questioning are to what some Just is or October you issues? to be capacity driven a maybe I competition but the get implications. quarter investors sense, fourth traffic, or then

Michael Skipworth

question. would managing quarter. But executing the we one say back, step or benefits. take strategies Jeff, for that not I we're definitely against that we you thank the to term, and a for for strategies we And a what is managing the the business anticipated. our are you solve have It's multiyear proven believe business are if long we

sales QX And XX%. you we quarters lapping again, if where mark think about consecutive same-store it, will the of over first of be X growth will

north as And same-store a so our XX% it remarkable. comps, growth to scale a that's on look able be to pretty AUVs we stack our at of sales is by basis, X-year

double-digit is which the couple a our experienced think sales same-store health remarkable. points single to other we've vintage, of across the pretty and strategies And of I data the just growth overall that brand, of is speak in effectiveness every XXXX, year-to-date

strong supply $X.X at strategy, sits from exciting now that brand in chain growth our our million show cash seeing AUV that is partners. for up Combine pretty it way development a this a with perspective. so flows And you're creating incredibly

pretty from scale, a was remarkable. rate, a XX% development units We year than and for at XXX% quarter size front. XXX, year our exciting opened us growth is more over delivering last at which, this unit pretty a QX

Jeffrey Bernstein

assume, But because, question again, I side the is the very the And of into your you And uptick comp well growth like looks openings third long-term preferred then like on you on demand mid-teens based the growth 'XX, my did promise. about going is would follow-up, of my quarter, what 'XX unit strong. the for as seem beyond which things, of in with XX% the just short-term Understood. focus. it I think now agree you kind

lots So franchisees, that and have if quicker, to unlike from lots especially accelerate franchise with standpoint it a up with the the to just growing like systems ability challenges of the growth momentum that the standpoint, people markets ramp would new strong brands. maybe so new in capital in have system, seem company-operated is of you a a

why there doing XX% Or Is of well we wouldn't year look any reason into is just sustain promise? another should unit that 'XX excess to as kind of 'XX of you kind that there wondering, XX? any factors? mid-teen of you're in I'm in directionally growth So speaking, limiting that

Michael Skipworth

from the for record one appreciate demand for we've strong navigating is extremely you I the pipeline for strengthen. question. is unit numbers, nailed ever partner strongest our thank Jeff, that continue it, we brand And our it. to large are obviously, law had The community. of growth development. on We referenced but the you the economics

pipeline growth. very responsible is and the industry-leading continued we're to on so sustainable there And focused growth. support But

And so we're be really back annual for chain think continue year, to But step guide us the fact of. to take proud opening something it basis, represents disciplined. that pretty small you'll like this our we're a an see is which about we and a on

Operator

Next question Tarantino with Baird. from is David

David Tarantino

the for your wanted QX. the on to at the Michael, ago slice you in does you comparisons business it big difficult in to I material years can But comparisons of ago answer. X And you're I of ways. up or look not? change I what guidance a implied or ask that year follow change the the question is, QX about that comps different to trajectory a to comparisons, a giving a know it or represent the in can wanted lot relative are question I mind, making guess,

Michael Skipworth

is change basis, not in it a suggest growth would looked XX%. look a basis way I of of growth more business. X-year material on the we've delivering the when know actually David, sales it's to that's at of which we're trend And north difficult Yes, kind at the X-year a stack same-store on

in an to importantly, as acquire most we every we to business we're pretty continuing to excited think growth our see in showcase record cohort, new single which of transaction uptick I frequency guests. And across healthy continue levels we're to continue about. see And

overall health of the business fundamentals and strong. are So our extremely

David Tarantino

And some unit in new you then in think opportunity referenced markets XXX Europe. I

could Europe. which for So markets that I out than on to? elaborate laid previously I hoping was a target had was Western you that that lower applies you Because think

are So why more understand I number? markets and you're maybe which just wanted now, bullish included in that to

Michael Skipworth

outside that markets just David, that are it to Western of we're new about. but we clarify, Yes, is includes Europe, signed super number -- excited some

talked new how brand of the continued in over report just interest but over signings of to includes partner we've brand and quarters mentioned, the a about strengthen, aggregate last And of term, excited handful as we pipeline to couple an restaurants long that XXX of it to the has we're opportunity France. that,

several actually pretty that new also have market similar opportunities these with already Coast which includes exciting. region XX Australia roll pretty to restaurants, domestic restaurants Gulf aggregate, we in XXX potential But to another signed. that where countries are our for And we that in presence then over performed business. It we as up have a the

Operator

is question next from Cowen. with TD Andrew The Charles

Andrew Charles

the from context XQ the roll then X-year very saw you comps it were XXXX, the track. guys view trends should in these great helpful that suggests this mid-single-digit that way X-year that XQ year you I Sticking for theme basis. If on of on comps. Michael, of a through next be kind on that and

digits way the thinking the XXXX I'm that make that right right to seen here, of the that about is great beyond. this Just years about kind want and still way mid-single to think you've few after sure

Michael Skipworth

the question. I appreciate Andrew,

it's strategies of against. the I the highlighted have of several confidence would we to in to fair it's front gain think delivery occasions, the continuing whether the have us examples to of runway our of we to executing continuing And what relates it we're whether we awareness, is how expand and point have just amount we're the share sandwich executing, strategies chicken channel. brand I as

talked we're we about And of excited about. MyWingstop, then which really the launch

the to but it's showing up. to that we in level highest business. do have some are have that to in into we're how allowing saw still that to able personalization that's we early seen the platform digital we with those innings MyWingstop, exciting quarter, that's is third retention and some guest we've impacting new of profiles and it's would proof hyper the And pretty We pretty exciting a us ever -- showcasing leverage demonstrate one new points and point invest lean guest

a We're long business. have And lot we we we're the here in point runway XXXX, strategies executing guide against. the I story to so but think would to that fact in confidence to short, see just the of not we

Andrew Charles

second That's ago. than went when million. I new store And very see very XX to mean of nearly million helpful. my economics $X very volumes guys encouraging roughly years -- Okay. question, [indiscernible] up you public, higher encouraged $X.X that's

just the advertising, you this So do a Or room the I'm given just more place, on have think playbook in of higher? the curious, do delivery think do ceiling you third-party for see you sales, ability more national run benefits is this? you has to that this

Michael Skipworth

under to than our growth. really think that if but gas got encouraging how the they're you of those continue that We coming which vintage, vintage, full year vintage current a see. obviously, drive not this you a is I annualize are lot referenced, stronger will, out XXXX we've this XXXX gate, Andrew, of you if left referenced the performing Yes, restaurants to in much to belt, year tank,

this commented sales ago, vintage, growth did every XX how million, across same-store which includes Wingstop we I single we across $X years doing then earlier saw that's double-digit year single that original opened vintage. And every see of north

that think us we $X there's gives target So quarter set drive confidence our and quarter revealed or in of last us growth, front million of to last we runway of a AUV. a continue lot in to

Operator

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

Sara Senatore

follow-up on Actually, just was agreements. Follow-up question. the first those a international, then maybe and a

gets I out you a that that out only like store existing the there. X,XXX the know put long-term put I quarter would your way put recently think to plus you there. of think of that count you I -- kind those you've

it revise that should So you again. I'm not suggesting

you it just long-term on contemplate I'm versus seems trying conservative question, of But how understand because please. I increase to just ground a that And have findings new all what a pretty is? the then number separate And like gave side these now? did meaningful I'm curious, that

Alex Kaleida

this the it outside did we across Alex. X,XXX-plus showcases our expansion sign have presence also plus we targets referenced, we That expanding growing contemplate the we're opening. found U.S. But a markets the is Sara, discussed think for and and a number we the domestic haven't reason today. we're XXXX-plus, ceiling that I units on our still and that

is U.K. Our a market great example.

We have over and XX showcase stack the you restaurants transaction and AUVs now market. each are is over story. growth. continue They $X When vintage, same vintage million growing in to the that comping

that So that. these I have think now, to reevaluate. think our markets that just high we'll to hitting as showcase we've we for out target in I in past, degree confidence of want a and we demonstrated put a continue But signed we

Sara Senatore

we And up like that yes. XXXX compare in of then XX% to like of with underlying this which this one the was partnership kind ago, things guess I saw of the is been the seemed sort I pre-COVID, Certainly, long in was if consistently question step-up very it time year about I more it a that of range. NBA. in kind volumes, broadly, know the And maybe

had more when of as again, sort And comps. so like you of partnership I change? is such I meant I what little another -- for potentially grown we mean? was of to what step before could into But just And including you said was this you insight understand, give as not if just unlock sort opportunity is this opportunities -- visibility? drivers, know a a about, think your your as you fast awareness trying does bit haven't has this

Michael Skipworth

with drive for funnel, us. that help think We our we're continue of a first awareness. the And it And at start top this Sara. It's really to it's Absolutely, we excited executing. within the going partnership Yes. think strategy the about to perfectly fits NBA. we're obviously, to

able carpet exciting own to in-game. partnership strong events TV game. going presence some this going we're be we're from be pointed our We're be on, built like to brand on celebrity be there, But But a already. the to in you going able presence to event to out, as green the to profile pretty able All-Star is going to And game. for actually have the a

outside logo So or on a arena. think of of even court the the

And in give well access spots leverage with series to addition NBA talent. unlock custom the TV to perhaps as to us that to allow some going allow us to some that, it's NBA us social content as

And so as think pretty scale of drive and of evolution for in of continuing a think we awareness the brand exciting we our strategy. top-of-mind is Wingstop brand, evolution the the this to

Operator

Inc. Jim is from next question Salera The Stephens with

James Salera

you I lot existing able strong break parse wanted volume of we people platform. advertising I'm sure, is if -- versus new trends, frequency to a this ask increasing a you're new if of can since of be huge guys customers, in increase would to potentially the customers out into but to this there's very that frequency still awareness that bringing gap closing the and obviously, year,

details new by So coming you being people driven volume how customers? much could on is of give versus any the frequently more

Michael Skipworth

Thank you for question. the

this with of to additional the the see guests, year. pretty We've addition seen the addition channels a tenure consistent seeing frequency That that it's access is it's growth, new actually exciting. pretty is and with the which of strategies growth story another pretty highlights these that uptick unique our We're points frequency, brand, something both, Chicken coming from of profile of is. is pretty new an this for brand. and think I our my and us or the element Sandwich, over in exciting

advertising new also frequency, And guests. are helping then but drive it's helping our then lot of all us a acquire

quarter guest on new quarter set records to acquisition. We continue after

this for pretty industry-leading our that so of XX%. fueling impressive things of of there XXst And up year not combination number sales the outlook are growth. remarkable but this else And it's our reiteration consecutive which about our that same-store itself, to There's us of of also those just both approximately think out nobody is is sets year only that. by it doing growth,

James Salera

about mix talk just context increasing one that appreciate primarily the by more the double-click driven it. of Maybe on to I seeing you're we If kind and Yes. frequency, is on. or higher greater more more? customers customer purchasing traditional the are sandwich you have also with out Or the who awareness a just wing there as frequency is frequency? seeing boneless bone-in

Alex Kaleida

increasing Jim, aware as we're consideration the we we and the moving And this both our is the metrics, awareness if about, back boneless Alex. Actually, funnel purchase us. business. and from We're then step intent becomes think up seeing that consumer as wings classic in year-over-year. our is brand growth and grow health seeing and of

more calls industry. And then right prior those we that quality we our that deliver We consumers going sweet for over prioritizing measure value, we specifically. see what broadly in this brands spot in we're and guest consumers of expectations. seeing And we're on across those on to metrics think talked growth about and are the

And cohorts frankly, are we frequencies last seeing in in of growth our income frequency growth all see as area quarter. the that across or another in database

Operator

The Morgan next is question Stanley. with Brian Harbour from

Brian Harbour

high forward? kind that Just the And company-owned has consistent not? I The gone system to food sort looking mid- from there range. what low kind mid-XX% at to to or of of store guess XX% quickly. your you that of expect And going is like is I margins cost see with

bit given to And you like, sort range higher then that have term? are I now? that prices that, higher, wing a contemplate with right near happy do moved you guess price related of Or

Alex Kaleida

a market we there. X, set quarter for to we training some call up to Dallas made in and bit little We carry restaurants the ] up I of expenses labor noise address term for expect bit food those catch Brian, did things company the that just have R&M that in that specifically have to a acquisitions we X and relates restaurants long before costs. and a into restaurant [ to related

XX%. spot And purchase, reported was we have basis quarter pound. our historically, when market that would XXX been last points the anchored on your for what But per And our $X.XX than a our cost, address move market is expectations. spot We deliver last of wings chain supply did example strategy. saw effectiveness food question the to on to higher our bio company restaurants cost the it quarter past upon XXX of good weekly to of food

about excitement our So really felt brand The partners. we're excited this. among is

actually your the than the company brand as on relative they're based their restaurants answer boneless food basis points what company food average. to cost on higher are partner to purely lower averaging, a XXX the costs, question mix seeing And

into So translated, development mentioned, pipeline. as Michael that pace our a in has record excitement

Brian Harbour

really have G&A yet? And Okay. there? change there versus that kind planned guide, on sort if year is you of varied else anything the like what Is any don't know thoughts looks driven? your next And that's comp just I of incentive there

Alex Kaleida

as stock-based the That's you saw compensation in despite correct, both stock -- for as based our that update associated performance Brian. our guidance well It's with purely the adjustments comp on SG&A, our of system even about rate was year. as with a imply are of about And we X.X%. showing would then SG&A those percent a investments, sales leverage our though, year-over-year. this X.X% where guidance

time. of I leverage gain continue so and aspirations business, continue we're to you'll us our behind also kind to growth long-term And think over to the strategies going in invest our but see

Operator

Danilo from is question next Gargiulo with Bernstein. The

Danilo Gargiulo

stores on given pipeline you Can you maybe the international the visibility you've you view for can both domestic actual that stores the the share and on please talk of your U.S.? updated about split the model success to? And in have seen that

Michael Skipworth

please? your repeat last of Our can part phone Danilo, over question, the here. broke you

Danilo Gargiulo

States? great on the seeing United What is split your yes. updated development given that in Sorry, stores view you're successes in some

Michael Skipworth

What split I'm mean do sorry. stores? by you

Danilo Gargiulo

in are existing open [indiscernible] stores that to already. to Stores addition

So your in any that ] cannibalization you threats [ see existing strategy.

Michael Skipworth

today, it's I U.S. strong from the in brand growth No, a earlier yes. significant have our ever the for demand think we There's of partners call, it's existing amount strategy, we as mentioned on Infill it pipeline Yes. as the been.

And partners as of our we opened, restaurants that reinvesting. existing same remains said XX% the I the we've the brand testaments one that think before of

end update pipeline the count. markets exact so when of year at pipeline And the for the we'll really, new international, that really you on the combine that, is these with obviously, strong. But

more a unit to opportunity in quarter ladder restaurants, provided take in that U.S. X,XXX down or locations built actually back trade you last if up unit step U.S. our playbooks overall on the we updated are see we'd the to that that Now site identified of area-specific that opportunity we roughly we see

in million with -- so contemplated target completed I we conjunction strategy another. new $X with both was those conjunction the that of that development of work in and and AUV think exercise were our And one

partners, we inherently to economics industry-leading And will our so continued our growth. for feel which unit fuel confident improve brand unit in continuing

Danilo Gargiulo

And a in earlier, XXXX. beyond gas of lot that you also mentioned you had tank the

the is the lever and for specifically XXXX? trend about, what So that most you're excited

Michael Skipworth

strategy, I not component executing one strategies of been it's the lot just confidence other of runway us in concert excitement over another the it's fuel and And think year kind of for one how give lot a work to strategies AUVs and have. XXXX, it's to these to amount $X ability of a really no and we've different time. each in our of scale in with we really the continue million that this

It's quarter celebrated already million quarter, we to later. last target, just remarkable AUV above million and achieving our one pretty $X we're think $X.X

strategies just I So excitement. and effectiveness of to speaks the think our it our

Operator

next question with Barish Jefferies. Andy is The from

Andrew Barish

bit of from is it's with quantify line the, growth, there 'XX you I of sales sales look to should system that, of system growth? of if relatively like Guys, a anything kind of? in it we the out But XX% the divert more marketing maybe the that kind regular kind TRP way wondering few 'XX, a NBA if kind tracks the you versus aware little sponsorship anything weights Does sort dollars different kind be can or of growth. assume maybe of in the approaching

Michael Skipworth

not for a it's look combine Andy, you, look a and interesting. you media streaming we basis Thank We invest just anymore platforms TRP basis because It's at our to little difficult It's on question. where at some TRP the when dollars. comparable. it a of really it on don't other the

a scale and on bring any say and think enhance a look about. I all it the And opportunity what this of But we away more in programming year. within live say placements excited that would sports. to helps wouldn't around It just it spots, have to that we're awareness. really heck pretty the dollars we're more than back I -- in sponsorship last year NBA we're by I really on will continuing invest feed center NBA continuing is we to us more at And and front were diverts we from this on a spot lot

a But dollars. increase bigger we of one-for-one I think obviously, we bit our get little as ad But looking bigger efficiency and well. fund a at obviously, in on system it's sales, those dollars get as

in, continue the a So to being lean bigger way as brand. to scale able in we

Andrew Barish

year. costs. one during food on of quick And Cool. an seen kind then XX% is increase the The follow-up

little to to guys a bit there please? a company-owned level, do of that some XQ absorb how Just a about food is understand not historically. that supply us XQ so bit or we in on cost chain, help lag, little as then obviously, it, the the same quarter of the relative spike lag kind just wing you relative And to costs think

Alex Kaleida

there's cost. our Andy, slight a perhaps in food lag

So what for you stepped likely would QX. We costs QX anticipate a in saw peak more the restaurants. in for in food the so little company year, was down bit

restaurants we training company That's investments and are I have. to into QX as additional you a did maintenance that specifically But flag will unique flow some repair the bit and that on acquisitions made. labor there well from though as expenses

Operator

from Gordon is The Haskett. with Farmer next question Jeff

Jeffrey Farmer

about up on from advertising. Andy's Just Sara question and well earlier as following

big Obviously, that growing picture, at is fund XX% coming the what clip? that next NBA comes advertising a just So for is national there.

things But couple guys marketing the front next on of You looking a are basically media of of strategy some what the years? years ago. got couple on over to that at are you more always the aspirational

Michael Skipworth

that Jeff. game. still over we're more a in Yes. do think but not on year, think [ if we spot actually question, we it's It's give two breakthrough than game. bigger we we're impression are a are. still great a game, And or up ] We're creative, are showcasing every we a and We a I much last meaningfully on

a But awareness lean front size brand NBA can is our to we're continue how in current strategy. and driving awareness example of So in drive more lot ad there's of experiencing sponsorship on the a the runway think growth in and fund. evolve, us through continue we our still to I great

them. to So effective, be highly But fair continue current amount yes, tactics, associated I runway of are would say each to that. more a proving of have our of which with

Jeffrey Farmer

just Okay. follow-up. an And unrelated

But your touched are give level economics what little guys units. some You bit they good units? franchisees for Obviously, international are international it front. us of can seeing the international or as on on context as economics get. those But you return, a give as unit type with U.S. to cash-on-cash the us those

Michael Skipworth

Yes.

similar here strong and we $X cash-on-cash build-out the mentioned the XX talk us economics you the to very restaurants You unit that say, AUVs in are But higher Alex the a about there of the experienced that the bit I lot. the would hear And when million, U.S., maybe are cash-on-cash Jeff, returns, a earlier, costs. those at little look there. really north U.K. returns

Alex Kaleida

just Jeff, their markets size the footprint seeing. have to re-up have each the markets of And XX-year to double their they're that agreement near add development well, returns as their in reached showcasing

Jeffrey Farmer

sort before those get comps do where think need now, consistently? I'm last of to pushing one, you I know just XXX-some-odd for to you the guys start units And envelope right reporting units here, international but you

Michael Skipworth

market each close Even number, XXX, aggregate, in at though in territory its is phase different I pretty it's think, a cycle. to or growth decent-sized a each

still demonstration to But that's of little So start our business that I bit a investors something analysts a before bit we it's health think the and of out. little a radar, overall the and more scale hear breaking loud more we and want on see and clear. representative, we

Operator

next with Gregory is The from question Guggenheim. Francfort

Gregory Francfort

item? about to I of is G&A XX%, forward, thinking want to at revenue as I ask if is that line maybe the about -- for up years, rate look kind you the G&A just how and leverage last opportunity the XX%. going think X up I maybe that growth about are And

XX, XX same-store will or to if that, G&A pretty a year? be sensitive to what a And line the follow-up or as could outlook maybe count how sales guys of scenario possibilities just X wide next you be

Alex Kaleida

to technology, the we're is connected SG&A the to have we industry-leading areas, what you're Greg, invest whether This scaling related performance. us then ahead in performance in adjustments investing had investments some in to it's seeing compensation. we've the making delivered And capabilities there. of in incentive-based international long-term, growth,

back we have ago, relative And leverage But system-wide as where range as G&A is probably showing to of showing -- for more you X of a that year. were percentage our this that X were low years year last I is if we percent sales. we trace that mentioned, outlook in

outlook adjusted that's driving. you and couple and additional provided, you to of that with guidance the line delivering, of -- would top for, XX% what XX%. also expense that's this of believe that in the guidance, We And shows we for provided quarter sustainability prior we delivered give that results approximately if an top an If take growth. just year provided we're take you we the context profit and for industry-leading that an picture a growth on rate the XXXX EBITDA adjusted EBITDA imply we're

Operator

with next Christine GS. Cho question is The from

Hyun Jin Cho

been trying in So and a the X from think AUV majority experienced impact increased X, developed scaled of factor growth? partner X a synergies ago by probably a stores your higher Alex, are understand on that brand a and a again, So yes, base and your brand handful maybe whether And in store just I to years your units in of existing to comments few long-term partners between mentioned new you seeing more gauge accelerating and just lot this to past? the your of stores now are ramp meaningful their trying I'm kind has years? partners, being to compared as go a they unit of new the

Alex Kaleida

question, for the Christine. Thanks

brand we in out relative remarks I partners prepared a think is there. to this over a which think pretty called earlier, I this his different in system unique we -- had others franchise XX open year, Michael restaurant on

Wingstop evolve with brand showcase what Wingstops growing and that are partners that is in to and size their And more interested there's adding portfolios. scale

this translate to of XX% of restaurants, So of to XX XX pipeline drives seeing. X unit from we're number scale which seeing brand this we're growth existing operators coming operators and into our scale pace partners that unit record XX,

Operator

with is question Vaccaro James. next Raymond from Brian The

Brian Vaccaro

for Just me. X ones quick

us your maybe Alex, what And wing level inflation set store year-on-year company margins, just third bone-in margin on in the up could fourth and quarter? the on Following expectations? you was COGS quarter

Alex Kaleida

wing to we've and year peak the where been Brian, chain the XXX% that than inflation inflation over that -- on it yes, window more and XXX%. able was chain. we're executing market our this great we last example with of were of supply think navigate strategies We able I the by quarter, strategy. spot price, a to had that's what a effectiveness supply In on navigate the was

little a that that company that earlier cost food down the beyond mentioned do into importantly, food the bit cost I anticipate I would we is the our think quarter. step fourth And more restaurants seeing brand that's seeing partners company their points our us are what than better further and reported, food a for is basis what exciting cost which they're that's incredibly XXX returns. strengthening

Brian Vaccaro

any many and intense the you your environment, seen you've of customer And deals think about more meal heading just just like. how more QSRs, your light broadly, if I'm in industry into value broader year-end? posture order patterns pushing frequency, Okay. large in value curious and changes for including the then

Michael Skipworth

we would referenced the say, our and growth pretty in as I we're foremost, how earlier, We business. cut we we Brian, in cohort Yes, every single encouraged first saw what data. by it see

to and to quality levels that, continue measure addition in strong we In really value.

And has this said we've before, us. approach think, to for disciplined but pricing, our paid dividends we

year record positioned well to for believe so our this another we're ability brand. environment to navigate And we and in confident feel deliver the

Operator

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

disconnect. now may You

Wingstop (WING) 30 Oct 242024 Q3 Earnings call transcript