With 500 stores in the U.S. and Mexico and its 3 billionth wing sale fast approaching, it’s probably not essential to identify Wingstop as Chief executive officer James Flynn sometimes does: “We are not Buffalo Wild Wings ( BWLD).” Wingstop, that was founded in 1994 and began franchising 36 months later, has new private-equity owners and sees lots of opportunity to expand within the U.S. and internationally.
Wingstop, a 500-franchise chain, isn’t done growing nationally, internationally or into a whole sort of business. Why not? It provides had eight consecutive numerous years of same-store sales increases despite a tough economy that stalled many other franchises, which Flynn attributes to consumers trading down from casual dining to so-called fast-casual restaurants since they tightened the purse strings. “Our company is for a very good value for the purpose perform,” he says.
But more importantly, there doesn’t appear to be plenty of direct competitors. Along with a solid management team, skilled professionals says, which makes selling the Wingstop story to consumers and franchisees so much easier. “If you look around, we are the only real company which i know of virtually specializing in nothing but wings. If you are taking wings plus beverages plus fried potatoes, you got 90%” from the menu — an exaggeration, though Wingstop’s menu is not any-frills. It sells only wings, boneless and bone-in, though with 10 flavors to sauce them up, including “Original Hot, Cajun, Atomic, Mild, Teriyaki, Lemon Pepper, Hawaiian, Garlic Parmesan, Hickory Smoked BBQ and the newest offering, Louisiana Rub.” Orders are made fresh, cooked to acquire and customers could get a variety of side dishes.
Wingstop is really a fast food joint. Buffalo Wild Wings, on the other hand, continues to be hugely successful being a part sports bar, part casual-dining restaurant franchise. “We don’t have any real significant chicken-wing competitors,” Flynn says of Buffalo Wild Wings. “We consider pizza probably a bigger competitor.”
Record-high wing prices forced www.allfoodmenuprices.org to take pricing actions at the end of 2017. One of the negative effects: Ticket growth that boomed the 1,157-unit chain’s domestic same-store sales an eye-popping 9.5 percent inside the first quarter versus the prior-year period. Systemwide sales jumped 20.4 percent to $313 million and Wingstop had revenues of $37.39 million (adjusted earnings per share of 25 cents). These numbers jolted the chain’s stock greater than 7 percent in Friday afternoon trading. Shares are up 65 percent ofexab the very last year.
President and chief executive officer Charlie Morrison admitted during a May 3 conference call that Wingstop’s comps hike “does contain a little bit more ticket growth than we might normally prefer.” This is running about even for the company with transactions, Michael Skipworth, CFO, said.
The alteration stemmed, in some ways, from Wingstop’s decision to provide split-menu pricing in light of commodity concerns. The chain reduced the cost of boneless wings and conversely increased bone-in prices in some cases. “We did view a mix shift connected with that,” Morrison said, “that have benefited the P&L upward of 200 basis points on food cost, which was great, but concurrently, put a little bit more lift inside the ticket than we would have otherwise preferred.”
Nevertheless, Morrison said Wingstop were “quite happy” using the comp performance, understandably. Momentum carried from the fourth quarter into fiscal 2018, and Wingstop trusted a really strong March to bolster figures.
The company increased its systemwide restaurant count 12.2 percent compared to Q1 2017 because of 22 domestic openings and six international ones. Wingstop desires to reach 2,500-plus units domestically and become a “top 10 global restaurant brand,” Morrison said.
Unit-level economics would be the key driver, he added. During Q1, favorable wing prices together with the company’s leverage on labor and operating expenses resulted in a whopping 1,000 basis-point improvement to its company-owned restaurant margins. Same-store sales were up 12.5 percent at corporate units.