Wingstop Q2 same-store sales soar 31.9%
Fast-casual restaurant brand credits digital sales as it opens more ghost kitchens
Ron Ruggless | Jul 29, 2020
Wingstop Inc., with its reliance on digital delivery and carry-out sales, excelled amid coronavirus pandemic restrictions with a 31.9% increase in domestic same-store sales in the second quarter, the company said Wednesday.
The Dallas-based fast-casual brand, in releasing earnings for the second quarter ended June 27, said the sales gains, which were on top of a 12.8% same-store sales increase in the same quarter last year, pushed average unit volumes to near $1.4 million amid favorable wing commodity prices.
“The topline momentum in our business has continued into July,” said Charlie Morrison, Wingstop CEO and chairman, on an earnings call, “with quarter-to-date domestic same-store sales up 28.7%.”
Wingstop’s international business has been impacted more heavily, Morrison said, as it general relies more on dining rooms in malls or sports-bar-like formats. As of Wednesday, only seven of 162 international units were closed.
Wingstop opened a second ghost-kitchen unit in the United Kingdom during the second quarter, and its first ghost kitchen in the United States. The first opened late last year.
Morrison said Wingstop’s reliance on digital means it can occupy smaller and less attractive real estate than most restaurant brands.
The new delivery-only unit in Garland, Texas, covers less than 400 square feet, compared to Wingstop’s average restaurant footprint of about 1,750 square feet, and carries the full menu.
Wingstop maintains digital sales above 60%, said Michael Skipworth, Wingstop CFO, and for the second quarter it was 63.7%.
Through the quarter, Skipworth said check growth moderated a bit as the period progressed but transaction growth increased. “We’re also seeing a slight uptick in frequency with our core [consumer group],” he said.
For the second quarter ended June 27, Wingstop’s net income rose 134.6% to $11.5 million, or 39 cents a share, from $4.9 million, or 17 cents a share, in the same period a year ago. Revenues increased 36.1% to $66.1 million from $48.6 million in the prior-year quarter.
As of June 27, Wingstop had 1,436 restaurants systemwide. Those included 1,274 restaurants in the United States, of which 1,244 were franchised and 30 company-owned, and 162 franchised restaurants in international markets.
During the fiscal second quarter, Wingstop had 23 net new restaurant openings, with 17 in June alone, Morrison said. The company expects between 120 and 130 restaurant openings for the year.Back