Sales for Wingstop slowed significantly in the first quarter, with a backdrop of economic uncertainty muting consumer spending.
The fast-casual chain reported domestic same-store sales up only 0.5% for the March 29-ended quarter, including positive transactions, though the increase is lapping 21.6% same-store sales growth in the first quarter last year.
The fires in Los Angeles and bad weather in the first quarter were also to blame. But slower sales have continued into the second quarter so far this year, when Wingstop faces even tougher comparisons with a nearly 29% same-store sales increase last year.
Sales are expected to improve in the third quarter, but for the year, the company downgraded projections, saying domestic same-store sales would be up about 1%, rather than the low- to mid-single-digit increases projected earlier.
President and CEO Michael Skipworth said the macro environment so far in 2025 has been dramatically different from the past two years, but it’s similar to difficult times seen in 2017, 2020 and 2022, with consumer behavior indicating “pockets of elevated concern” that ended up being short lived.
Slower sales are concentrated in certain geographies, he said, and are impacting lower-income, and Hispanic guests, rather than being broad based, Skipworth said.
But Wingstop is proving its resilience with its long-term strategies, saying much of the business is performing well, even in this environment, he said.
“And so, I think for us, it does feel like this is kind of a little bit of a temporary, near-term pullback in certain pockets that we feel comfortable we can navigate again,” Skipworth said.
Wingstop has found another hit with its recently launched crispy chicken tenders in the first quarter, which—like the game-changing chicken sandwich line introduced in 2022—are bringing in new guests for the first time. In March, for example, the chain recorded its largest single month of guest acquisition, Skipworth said.
The move comes as McDonald’s also steps into the chicken strip business. But Skipworth said Wingstop’s offering can be “sauced and tossed” with 12 of the brand’s sauces, which is unique.
In addition, Wingstop is rolling out a kitchen modernization effort that includes a new digital kitchen display system, customer-facing order tracking and better demand forecasting.
The chain has reached average unit volume of $2.1 million (up from $1.6 million two years ago) largely with restaurants that are still operating with paper tickets and limited back-of-house integration, Skipworth said.
Dubbed the Wingstop Smart Kitchen, the new operating system has so far shown to cut the chain’s 20-minute service quote time in half, as well as improving quality and order accuracy.
The Smart Kitchens are in about 200 units, and will be rolled out systemwide by the end of the year, he said.
Wingstop has also developed a database of guests that has reached 50 million users. The next step is to develop a loyalty program that will tap the existing insights to personalize guest engagement. A pilot of the new loyalty program is expected to be in test by the fourth quarter, with rollout plans for next year.
Despite the macro challenges, Wingstop is not slowing growth. The chain opened a record 126 restaurants in the first quarter for a total of 2,689, and projections for the year were upgraded to between 410 to 435 units globally, which would be an increase of 16% to 17%.
International growth remains a focus, with units opening in Kuwait for the first time, breaking records with weekly sales. Australia is next, where a franchisee plans to open more than 100 units, and the brand will enter five more international markets this year.
Franchisees are not so concerned about the macro climate, said Skipworth.
Seeing 70% returns, they are more interested in talking about unit growth as the chain pushes to reach 10,000 units globally, with average unit volumes of more than $3 million. About 10% of the system is already there, Skipworth noted.
That unit count growth has resulted in big increases in the chain’s advertising fund. Sports partnerships are paying off. Skipworth said Wingstop was the most-seen brand during NBA games this season, for example. Now the brand is looking at similar partnerships with WWE and UFC.
And that brand awareness is what Wingstop needs as it attempts to increase market share.
Wingstop is the “largest brand that nobody’s ever heard of,” said Skipworth.
Wall Street appeared happy with Wingstop results, with the chain’s stock jumping more than 14% on Wednesday afternoon, despite an earlier dip following the lowered same-store sales projections.
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