• Same-Store Sales Growth: 0.5% growth in Q1, despite challenging conditions.
• New Store Openings: Record 126 units opened in Q1.
• Digital Sales: Increased to 72% of total sales.
• Adjusted EBITDA: Increased 18.4% to $59.5 million.
• System-Wide Sales: Increased 15.7% to $1.3 billion.
• Total Revenue: Increased 17.4% to $171 million.
• Company-Owned Restaurant Sales: Increased by $1.5 million with 1.4% same-store sales growth.
• SG&A Expenses: Increased by $6.3 million to $31.4 million.
• Adjusted EPS: $0.99, a 1% increase versus the prior year.
• Share Repurchase: 830,012 shares repurchased at an average price of $257.40 per share.
• Dividend: $0.27 per share, totaling approximately $7.5 million.
• Net New Global Unit Growth Rate: Increased to 16% to 17% for 2025.

• Warning! GuruFocus has detected 6 Warning Signs with FNLIF.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Wingstop Inc (NASDAQ:WING) reported a record opening of 126 new units in the first quarter, showcasing strong development momentum.
• Digital sales increased to 72%, indicating a successful digital transformation strategy.
• Adjusted EBITDA increased by 18.4% to $59.5 million, demonstrating strong financial performance.
• The company launched the Wingstop Smart Kitchen in over 200 restaurants, reducing order times by 50% and improving guest satisfaction.
• Wingstop Inc (NASDAQ:WING) achieved a record level of new guest acquisition in March, driven by the relaunch of crispy chicken tenders.

Negative Points

• Consumer sentiment has dropped to its second lowest level since 1952, affecting the macro environment.
• The company is experiencing a near-term pullback in certain geographic pockets, particularly among Hispanic and lower middle-income consumers.
• Same-store sales growth was only 0.5%, impacted by California fires, severe winter weather, and macroeconomic challenges.
• The company anticipates a same-store sales decline by mid-single digits in the second quarter due to strong prior-year comparisons.
• Increased SG&A expenses by $6.3 million due to investments in long-term growth and nonrecurring system implementation costs.

Q & A Highlights

Q: Can you provide more insight into the comp outlook for 2025, especially given the macro headwinds? A: Michael Skipworth, President and CEO, explained that the first half of the year is expected to be tougher due to strong comparisons from previous years. The company observed a pullback in consumer confidence, particularly in pockets over-indexed to Hispanic and lower-middle-income consumers. However, this is not broad-based, and Wingstop remains confident in its strategies and the underlying health of the business.

Q: How are franchisees responding to the current environment, and what are their main concerns? A: Skipworth noted that franchisees are primarily focused on unit growth rather than same-store sales growth. The strong unit economics and predictable food costs have strengthened franchisee returns, leading to increased demand for new territories and unit growth. This confidence is reflected in the record number of new restaurant openings.

Q: What impact has the Wingstop Smart Kitchen had on sales, and how quickly do benefits materialize? A: Alex Kaleida, CFO, stated that while there is a lag in consumer awareness, restaurants with the Smart Kitchen are showing positive sales trends compared to control restaurants. The rollout in Dallas-Fort Worth showed a 5% increase in conversion rates, indicating the potential for improved guest satisfaction and sales.

Q: Can you discuss the international expansion strategy, particularly in new markets like China and India? A: Skipworth highlighted strong performance in international markets, with record openings in Kuwait and upcoming launches in Australia. While China remains a significant opportunity, current geopolitical conditions have shifted focus. India is also seen as a promising market for expansion, contributing to the goal of 10,000 global units.

Q: How is the relaunch of tenders impacting sales and consumer behavior? A: Skipworth expressed excitement about the tenders' relaunch, noting that new guests acquired through tenders exhibit similar behaviors to those from the chicken sandwich launch. Tenders are mixing higher than sandwiches and are seen as a key opportunity to capture more individual eater occasions and drive repeat visits.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.