Despite a nearly 8% jump in the cost of bone-in chicken wings, Wingstop reported strong sales and revenue in the release of its Q4 earnings Wednesday.
Nevertheless, the chain is looking for ways to mitigate its reliance on bone-in wings.
As the fast-casual wing chain previewed last month, U.S. same-store sales grew 12.2% for the quarter ended Dec. 28. Systemwide sales increased 21.2% to $397.2 million, with total revenue increasing to $53.2 million. It’s the chain’s 16th-straight year of comps growth.
The chain sold nearly 18 million wings on Super Bowl Sunday.
Digital sales, a major focus of the brand’s efforts, increased to 39% of total sales in December, and Wingstop CEO Charlie Morrison told analysts that number climbed past 40% in January. The number is significant because the Dallas-based chain notes that digital orders carry a $5 higher average check.
Bone-in chicken wing prices rose 7.6% for the quarter, and the company expects the price to continue to climb in the high single digits for the fiscal year. The brand is testing new menu items involving whole chickens, to combat the volatility in wing prices. But those new items likely wouldn’t debut until 2021, Michael Skipworth, the chain’s CFO, told analysts.
“The indications from our research is that there is great potential demand” for chicken menu items beyond wings, Morrison said during the earnings call. “Obviously, we have to test that, which is what we’re going to start doing here in the second quarter.”
Global growth is a major area of interest for Wingstop, which invested $1.6 million in Q4 on a partnership with a consulting firm to develop international expansion strategy.
“A key insight from this engagement was the ability of our brand to be positioned as a premium globally, and as a result, charge a premium,” Morrison said.
Wingstop’s overall restaurant count grew by 10.6% in 2019, for a total of 1,385 total units. Among those are 154 global franchise locations, up from 128 year over year.
The chain recently added locations in France and the U.K., including a delivery-only kitchen there.
Enhancements to operations and technology have reduced transaction times to about five to eight minutes at international locations, Morrison said, “which is really important as we work on this premium positioning of our brand as well as placement of restaurants in key markets where speed of service is critical.”
Speed of service is less of a focus in U.S. stores, he said, because such a large percentage of orders are placed outside of the restaurants.
“It is important for us in really nontraditional-type assets,” he said. “That would include airports, kiosk locations, stadiums, et cetera.”
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