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    Wingstop (WING)

    Q3 2024 Earnings Summary

    Reported on May 2, 2025 (Before Market Open)
    Pre-Earnings Price$368.94Last close (Oct 29, 2024)
    Post-Earnings Price$315.25Open (Oct 30, 2024)
    Price Change
    $-53.69(-14.55%)
    • Consistently strong same‐store sales growth and rising AUVs: Executives repeatedly highlighted robust 20%+ comp growth driving AUVs above $2.1 million, which bodes well for sustainable top‐line performance and margins.
    • Robust expansion supported by existing brand partners: With 95% of new restaurant openings coming from reinvestments by current partners and a record development pipeline, the growth engine and market confidence remain very strong.
    • Effective supply chain management mitigating input cost pressures: Despite wing inflation peaking over 200%, strategic actions kept company food costs around 37% and secured brand partners a 300‐basis point cost advantage, supporting long‑term profitability.
    • Potential Deceleration in Same-Store Sales Growth: Analysts questioned whether Q4 same-store sales comps might slow from the robust 20% growth seen in Q3 to around 10%, raising concerns about sustainability on a quarterly basis.
    • Margin Pressure from Volatile Food Costs: Company restaurants reported food costs of 37% amid wing price inflation peaking over 200% in the spot market. Despite supply chain strategies, further cost volatility could pressure margins if not effectively contained.
    • Reliance on Existing Brand Partners: With approximately 95% of new restaurant openings coming from existing brand partners, the company faces concentration risk. If these partners slow their reinvestment or experience market saturation, future growth may be adversely impacted.
    1. Comp Guidance
      Q: Reason for slower Q4 comps?
      A: Management stressed they aren’t managing for one quarter; despite hints of a Q4 slowdown, the focus remains on sustaining over 20% same‐store sales over a two‐year span, reflecting a resilient business model.

    2. Unit Growth
      Q: Will mid-teen unit growth persist?
      A: Leaders expressed confidence in a disciplined, record‐strong pipeline driven by existing brand partners, supporting sustained mid-teen new store growth into 2025.

    3. Margins & Food Costs
      Q: How are food costs trending?
      A: Company restaurants reported food costs around 37%—with expectations for a slight Q4 improvement—while brand partners benefit from a 300bps lower rate due to a favorable product mix.

    4. AUV Expansion
      Q: Is there more AUV upside?
      A: With AUVs currently at $2.1M, the team remains focused on pushing toward a $3M target through strategic initiatives and digital enhancements.

    5. International Growth
      Q: Which markets drive 750-unit opportunity?
      A: The opportunity spans new international markets including France, several Gulf countries, and Australia, aggregating to over 750 future restaurants.

    6. SG&A Guidance
      Q: Any surprises in SG&A spend?
      A: Increases stem mainly from performance-based stock compensation; overall, SG&A is showing improved leverage relative to rising sales.

    7. NBA Partnership
      Q: Impact of NBA sponsorship on brand?
      A: The NBA deal is set to boost visibility via TV integrations and event activations, strengthening top-of-mind brand awareness.

    8. Volume & Frequency
      Q: Are new or repeat orders driving volume?
      A: Both new guest acquisitions and a rise in existing customer frequency are fueling sales growth, reflecting a balanced volume driver mix.

    9. Advertising Strategy
      Q: Future ad fund and media plans?
      A: Management plans to continue robust investments in live sports and breakthrough creative placements, enhancing overall media efficiency without reallocating dollars from core spend.

    10. International Economics
      Q: What returns do international franchisees see?
      A: International units offer cash-on-cash returns comparable to the U.S., supported by high AUVs nearing $3M, delivering strong economic performance.

    11. G&A Leverage
      Q: How sensitive is G&A to sales changes?
      A: G&A increases are largely incentive-driven, and as sales grow, fixed expenses will yield better leverage and improved profitability.

    12. Cannibalization Risk
      Q: Is there risk of store cannibalization?
      A: Management indicated minimal cannibalization risk, noting that 95% of new openings come from existing brand partners reinvesting in growth.

    13. Media Efficiency
      Q: How does TRP relate to sales growth?
      A: Although traditional TRP metrics aren’t as directly applicable, increased spot buying in live sports continues to efficiently drive broad brand awareness and system sales growth.

    14. Digital Platform Impact
      Q: How is MyWingstop bolstering digital sales?
      A: The MyWingstop tech stack has processed over $2.5B in digital sales, improving guest engagement through personalized content and heightened operational efficiency.

    15. Customer Order Trends
      Q: Any shifts in order frequency?
      A: Despite competitive pressures, order frequency is steady, underpinned by strong quality and value perceptions that continue to attract both new and repeat customers.

    Research analysts covering Wingstop.