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WI

Wingstop Inc. (WING)·Q4 2024 Earnings Summary

Executive Summary

  • Wingstop delivered strong Q4 results with revenue up 27.4% to $161.8M, diluted EPS of $0.92 (+44% YoY), and adjusted EBITDA up 44% to $56.3M, supported by 10.1% domestic SSS growth, 27.6% system-wide sales growth to $1.23B, and digital mix rising to 70.3% .
  • Management issued initial FY2025 guidance: low- to mid-single digit domestic SSS growth; 14–15% global unit growth; ~$140M SG&A (incl. ~$4.5M system implementation); ~$26M SBC; ~$46M net interest; and $29–$30M D&A; implied ~15% adjusted EBITDA growth; ad fund rate to 5.5% from 5.3% in Q1’25 (P&L neutral) .
  • Structural drivers highlighted: MyWingstop digital platform (database >50M users) and a proprietary AI-enabled kitchen operating platform rolling out over ~12 months to materially reduce quote times and unlock frequency/throughput; both support a long-term AUV target of $3M and >10,000 units globally .
  • Capital returns remain robust: Board added $500M to buyback authorization; $250M ASR initiated (551,325 shares delivered, ~75% of total); $311.1M authorization remaining at 12/28/24; quarterly dividend maintained at $0.27 .

What Went Well and What Went Wrong

What Went Well

  • Sustained top-line momentum: Q4 revenue +27.4% YoY to $161.8M; adjusted EBITDA +44% to $56.3M; digital mix 70.3% (record), underpinned by 10.1% domestic SSS and 105 net new openings .
  • Strategic tech progress: MyWingstop launched in 2024 with >50M customer database and higher registration/retention; hyper-personalization improved frequency, satisfaction (+~6% YoY) and check, driving multi-year benefits .
  • Predictable food costs and unit economics: Supply chain strategy decoupled from spot wing volatility, anchoring food/packaging to mid-30% range (visibility into 2026), supporting cash flows and franchisee investment; company expects 75–76% cost of sales for company-owned restaurants in 2025 .

Selected quotes:

  • “We believe we can grow AUVs to $3 million and scale our global unit count to over 10,000 restaurants.”
  • “We have developed a proprietary AI-enabled kitchen operating platform... allow[s] a meaningful reduction in our quote times... we believe we will unlock pent-up demand.”

What Went Wrong

  • COGS pressure: Company-owned cost of sales increased to 77.6% vs. 75.1% last year, driven by higher bone-in wing costs vs prior-year deflationary spot market; similar pressure persisted through Q3 at 77.8% .
  • Comp deceleration: Domestic SSS growth moderated to 10.1% from 20.9% in Q3 and 28.7% in Q2 as the industry pivoted to value and Wingstop lapped exceptional transaction-driven comps; FY25 comp outlook is low–mid single digits .
  • Q1 2025 near-term noise: Management cited unusual weather in the Southeast and California wildfires as transitory headwinds impacting early Q1, on top of tough laps .

Financial Results

Core P&L and Profitability (sequential and YoY reference)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$155.7 $162.5 $161.8
Diluted EPS ($)$0.93 $0.88 $0.92
Operating Income ($USD Millions)$41.2 $39.8 $41.8
Adjusted EBITDA ($USD Millions)$51.8 $53.7 $56.3
Company-owned Cost of Sales (% of Co.-Owned Sales)75.9% 77.8% 77.6%
System-wide Sales ($USD Billions)$1.176 $1.233 $1.232

Q4 YoY Comparison

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$127.1 $161.8
Diluted EPS ($)$0.64 $0.92
Operating Income ($USD Millions)$29.8 $41.8
Adjusted EBITDA ($USD Millions)$39.1 $56.3
Company-owned Cost of Sales (% of Co.-Owned Sales)75.1% 77.6%
System-wide Sales ($USD Billions)$0.966 $1.232

Revenue Mix (Q4 and prior period comps)

Revenue Line ($USD Millions)Q4 2023Q4 2024
Royalty revenue, franchise fees and other$57.7 $75.7
Advertising fees$43.1 $56.1
Company-owned restaurant sales$26.2 $30.1
Total Revenue$127.1 $161.8

KPIs and Operating Metrics

KPIQ2 2024Q3 2024Q4 2024
Domestic Same-Store Sales Growth (%)28.7% 20.9% 10.1%
Digital Mix (% of System-wide Sales)68.3% 69.0% 70.3%
Domestic AUV ($USD Millions)$2.032 $2.116 $2.138
Net New Openings (Units)73 106 105
System-wide Restaurants (EOP)2,352 2,458 2,563
System-wide Sales ($USD Billions)$1.176 $1.233 $1.232

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Domestic SSS GrowthFY2025N/ALow- to mid-single digits New
Global Unit GrowthFY2025N/A14%–15% New
SG&AFY2025N/A~ $140M incl. ~$4.5M system implementation New
Stock-based CompensationFY2025N/A~ $26M New
Interest Expense, netFY2025N/A~ $46M New
Depreciation & AmortizationFY2025N/A$29–$30M New
Company-owned Cost of SalesFY2025N/A75%–76% New
Adjusted EBITDA GrowthFY2025N/A~15% New
Ad Fund Contribution RateQ1 2025 start5.3% 5.5% (P&L neutral) Raised
Quarterly DividendOngoing$0.27 (Q3’24) $0.27 (declared 2/18/25) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
AI/Technology & DigitalMyWingstop launched; AUV >$2.0M; target $3.0M AUV; digital mix 68–69% AI-enabled kitchen operating platform to reduce quote times; >50M digital database; hyper-personalization lifting frequency, check, satisfaction; rollout over ~12 months Accelerating investment and deployment
Supply Chain/Wing CostsNoted higher wing costs vs prior deflation; COGS % rising Predictability via contracting; food/packaging mid-30% in 2025, visibility into 2026; company-owned cost of sales 75–76% Stabilizing with improved visibility
Macro/Value EnvironmentN/AQSR value competition; Wingstop focused on “value for money” and quality; consumer “okay” but elevated anxiety Mixed macro; selective consumers
Product/MenuHot Honey Rub/innovation cadence in 2H’24 New crispy tenders nationwide with promo bundles ($9.99 combo; $23.99 bundle) Active innovation to drive traffic
InternationalParis/EMEA expansion (Q3 PR) U.K. business sold for >$500M; pipeline expansion to ~450 units opportunity; 2–4 new international markets in 2025 Strengthening traction and TAM
Brand Awareness/MediaNBA partnership announced in Oct’24 Scaling presence across NBA, NFL, WWE, UFC to close 20pt+ awareness gap Increasing brand investments

Management Commentary

  • “We reached new highs with domestic AUVs of $2.1 million and opened 349 net new restaurants... As we enter 2025, we remain confident... as we work towards our goal of becoming a Top 10 Global Restaurant Brand.” – CEO, Michael Skipworth .
  • “We believe we can grow AUVs to $3 million and scale our global unit count to over 10,000 restaurants.” – CEO, Michael Skipworth .
  • “We have developed a proprietary AI-enabled kitchen operating platform... allow us to have a meaningful reduction in our quote times... unlock pent-up demand.” – CEO, Michael Skipworth .
  • “Adjusted EBITDA... was $56.3 million for the quarter, an increase of 44.2%... earnings per diluted share of $0.92.” – CFO, Alex Kaleida .
  • “By utilizing these inputs, adjusted EBITDA growth rate translates to approximately 15% in 2025.” – CFO, Alex Kaleida .

Q&A Highlights

  • Comp cadence and Q1 context: Low–mid single-digit FY25 comps reflect tough laps; Q1 impacted by unusual Southeast weather and California fires; no quarterly guide but cadence follows laps .
  • Pricing: Expect disciplined 1–2% annual pricing, likely toward lower end in 2025 given consumer backdrop; average ticket low-to-mid $20s for multi-person occasions .
  • AI kitchen rollout: Tested in ~30 stores with consistent speed gains; system-wide rollout over ~12 months; expected to unlock demand and frequency .
  • Capital returns: $500M incremental authorization; $250M ASR in Q4; focus on long-term shareholder value vs. special dividend in current rate environment .
  • International: U.K. transaction (> $500M) evidences value creation; opportunity now ~450 units; 2–4 new markets expected in 2025 .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 could not be retrieved at this time due to a temporary request limit; as a result, we cannot quantify beats/misses versus Street for revenue, EPS, or EBITDA in this report. We will update this section when S&P Global data becomes available.

Key Takeaways for Investors

  • Multi-year growth algorithm intact: unit growth (14–15% in 2025) plus low–mid single-digit comps, yielding double-digit adjusted EBITDA growth (~15% guide) despite tougher laps .
  • Digital and AI are core differentiators: >50M customer database and an AI-enabled kitchen platform should support frequency and AUV expansion toward $3M over time, bolstering returns and capacity .
  • Cost visibility improved: Contracting reduced exposure to wing spot volatility; food/packaging targeted mid-30% in 2025 with visibility into 2026; company-owned cost of sales guided to 75–76% .
  • Brand investments accelerating: Expanded partnerships (NBA/NFL/WWE/UFC) aim to close a >20pt awareness gap, potentially supporting traffic against a value-focused QSR backdrop .
  • Capital returns remain a catalyst: $500M added authorization and $250M ASR executed with $311.1M remaining at year-end; dividend maintained at $0.27 .
  • Near-term watch items: Comp cadence versus tough transactions-driven laps; Q1 weather/fire noise; execution/timing of AI kitchen rollout; ad fund contribution rate increase to 5.5% starting Q1’25 (P&L neutral) .
  • Medium-term thesis: Asset-light, high-margin franchise model with predictable COGS, expanding international TAM, and data/AI flywheel supports durable growth and cash returns .

Sources: Q4 2024 8-K/press release and financial statements ; Q4 2024 earnings call transcript -; Q3 2024 press release -; Q2 2024 press release -; product PR (crispy tenders) .