With 500 stores in the U.S. and Mexico and its 3 billionth wing sale fast approaching, it’s perhaps not required to discover 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 three years 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 in to a whole kind of business. Why not? It provides had eight consecutive numerous years of same-store sales increases despite a tricky economy that stalled many other franchises, which Flynn attributes to consumers trading down from casual dining to so-called fast-casual restaurants because they tightened the purse strings. “We are for an excellent value for the purpose we all do,” he says.
But more importantly, there doesn’t seem to be plenty of direct competitors. Coupled with a powerful management team, industry experts says, that makes selling the Wingstop story to consumers and franchisees much easier. “Should you browse around, our company is the sole company i are aware of virtually focusing on nothing but wings. If you are taking wings plus beverages plus fried potatoes, you got 90%” of the menu — an exaggeration, though Wingstop’s menu is not any-frills. It sells only wings, boneless and bone-in, however 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 created fresh, cooked to buy and customers can get many different side dishes.
Wingstop is actually a fast food joint. Buffalo Wild Wings, on the other hand, has become hugely successful being a part sports bar, part casual-dining restaurant franchise. “We don’t have real significant chicken-wing competitors,” Flynn says of Buffalo Wild Wings. “We really consider pizza probably a greater competitor.”
Record-high wing prices forced www.allfoodmenuprices.org to consider pricing actions in late 2017. Among the unwanted effects: Ticket growth that boomed the 1,157-unit chain’s domestic same-store sales an eye-popping 9.5 percent within 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 more 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 throughout a May 3 conference call that Wingstop’s comps hike “does contain a little bit more ticket growth than we might normally prefer.” This was running about even for the manufacturer with transactions, Michael Skipworth, CFO, said.
The modification stemmed, in some ways, from Wingstop’s decision to offer you split-menu pricing considering commodity concerns. The chain reduced the buying price of boneless wings and conversely increased bone-in prices in some cases. “We did visit a mix shift related to that,” Morrison said, “that have benefited the P&L upward of 200 basis points on food cost, which had been great, but at the same time, put a little bit more lift within the ticket than we might have otherwise preferred.”
Nevertheless, Morrison said Wingstop were “quite happy” with the comp performance, understandably. Momentum carried from the fourth quarter into fiscal 2018, and Wingstop used a very strong March to bolster figures.
The organization increased its systemwide restaurant count 12.2 percent when compared with Q1 2017 due to 22 domestic openings and six international ones. Wingstop would like to reach 2,500-plus units domestically and become a “top 10 global restaurant brand,” Morrison said.
Unit-level economics could be the key driver, he added. During Q1, favorable wing prices combined with company’s leverage on labor and operating expenses resulted in a whopping 1,000 basis-point improvement to the company-owned restaurant margins. Same-store sales were up 12.5 percent at corporate units.