Wingstop’s executives admitted the chain’s second quarter, including -7.5% same-store sales — its fifth in a row in the red — fell below expectations. But during the company’s earnings call Wednesday morning, they steeled their resolve to stay the course toward their long-term goals, albeit with some adjustments in the short term.
The long-term plan includes the continued execution of its Smart Kitchen, rolled out last year to digitize tickets and workflow and, ideally, improve speed and consistency. CEO Michael Skipworth told analysts that lower-performing restaurants with the technology have experienced an 11%-plus improvement in digital guest satisfaction scores.
The company’s development engine will also continue to churn at a swift pace. Skipworth said white space remains both domestically and internationally, as brand partners in the U.S. have opened more than 300 restaurants across 46 states in the past 12 months, marking 13%-plus pace. In the second quarter, the company recorded 102 net new openings.
“Our new restaurant development remains healthy, reinforcing the belief that our long-term unit economics remain firmly intact,” Skipworth said. “Our brand partners continue investing because they see the same opportunities we do ... Our brand partners are bought in."
That said, the company’s recent same-store sales slide has forced some short-term adjustments, particularly around value messaging to “protect its core consumers." Those core consumers are younger and lower-income and have been disproportionately impacted by relentlessly high inflation, gas prices, and general macroeconomic uncertainty.
“More than 55% of our domestic restaurants are located in urban trade areas where households are under more financial stress than higher-income households,” Skipworth said, adding that in those markets, digital visits and frequency declined by about 9%, while visits in higher-income trade areas grew in Q2. “That divergence reinforces our belief that the pressure we're seeing today in our core guests is macro-driven, not any change in the underlying strength of the brand.”
This reinforcement has presented an opportunity for the brand to test more value offerings to drive frequency, including single-user entry price points and price-per-person group occasions. During the second quarter, for instance, Wingstop deployed a "30 wings for $30" promotion, which drove transactions and increased the average first-party ticket by nearly 17%.
“What we saw was guests were building their own bundles with attachments, and that told us it’s not just price point, they saw compelling value in building their own bundles,” Skipworth said. “That tells us that quality, flavor, abundance and value-per-person are key to winning more occasions.”
Sharpening the brand’s position on value is critical, he added, because it’s “more exposed than other restaurant concepts to consumers who have been disproportionately impacted by persistent inflation and ongoing economic uncertainty.”
Another driver for Wingstop’s core customers is flavor innovation, which is why the company is ramping up its menu innovation in the second half of the year.
“We know that we can do a better job executing with our creative and messaging to include a call to action that shows not only quality and flavor but also breaks through with that value-per-person that exists on our menu today,” Skipworth said. “We see a real opportunity to focus on consideration and value-per-person messaging, as well as flavor innovation. Both (will) help us drive consideration, which will drive purchase. You’ll see us evolve our marketing in the second half to heavily focus on driving consideration and taking those learnings that we have from Q2.”
The company’s stout growth algorithm, Smart Kitchen rollout, value adjustments, and menu innovation are why executives are maintaining conviction in their strategy, despite shifting full-year same-store guidance down to -4% to -6% from a low-single-digit decline forecast in Q1.
“Our confidence in the strategies we've put in place has not changed,” Skipworth said. “As we move into the balance of 2026, we're executing against our strategies with a sharper focus on protecting our core guests while continuing to strengthen the business for the long term.”
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