Wingstop’s same-store sales surged in the first quarter, while the cost of its primary food product plunged, the company said on Thursday.
Same-store sales at the 1,157-unit chain increased 9.5% in the first quarter ended March 31, thanks largely to customer growth, some higher prices and relatively easy comparisons, thanks to a 1.1% same-store sales decline in the same period a year ago.
CEO Charlie Morrison said on the company’s first quarter earnings call Thursday that the same-store sales increase was “the result of transaction growth,” but included “a little more ticket growth than we’d prefer.”
He said operators raised prices late in 2017 amid record-high chicken wing prices. “We’re working to strike the right balance of traffic and check,” Morrison said.
At the same time, chicken wing sales plunged by 11.3% in the quarter, the company said. As a result, cost of sales at company locations declined 1,000 basis points, to 67.2% of revenue from 77.2% a year ago.
Morrison said the company’s franchisees, who operate the vast majority of the chain’s restaurants, had a “similar margin improvement.”
System sales at the chain increased 20.4% to $313 million thanks to the increase in same-store sales and a 12% year-over-year increase in the number of restaurants.
Revenue increased 11.9% to $37.4 million, while net income adjusted for one-time events increased 16.4% to $7.3 million, or 25 cents per share.
Wingstop shares rose more than 2% in after-hours trading on Thursday.
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