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Wingstop is beating last April's sales explosion

Despite high wing costs, the fast casual said same-store sales are positive for April, jumping 2020's 33% same-store sales growth.
Wingstop
Photo courtesy Wingstop

Wingstop had a high bar to jump, in surpassing last April’s 33% same-store sales numbers. But the fast casual on Wednesday reported it is succeeding in that Olympic feat.

“Our domestic same-store sales have remained positive during the first four weeks of our second quarter, which represents an acceleration in the two-year comp,” Wingstop CEO Charlie Morrison told analysts.

The Dallas-based fast casual has been a runaway hit of the past pandemic year, with a robust digital operation that catered well to groups of housebound diners.

It has also started 2021 strong, with systemwide sales for the quarter ended March 27 up 30% over the previous year, to $558.9 million. Domestic average unit volumes increased to $1.55 million, up from $1.27 million during the same period in 2020.

Wingstop’s digital sales grew to 63.6%, compared to 43.3% during the previous Q1. The chain has long stated that its goal is to convert 100% of its transactions into digital ones.

The chain ended the first quarter with 1,404 total domestic locations and 175 international units, for a total of 1,579 restaurants. Wingstop opened a record 41 net new locations during Q1, leading to year-over-year unit growth of 11.7%. It is also seeing the largest new restaurant development pipeline in the brand’s history, with more than 700 commitments at the beginning of the year.

Wingstop said it is expecting unit growth of more than 11% for the remainder of the year.

All of this growth comes amid a backdrop of “record high bone-in chicken wing prices,” Morrison said.

The chain expects wing prices to remain elevated for the rest of the year, due to a labor shortage at poultry producers.

Bone-in wing prices on the open market increased more than 50% year-over-year, CFO Michael Skipworth said. But Wingstop was able to negotiate better deals with suppliers, securing wing prices that were 25.8% higher than what the chain paid last year, he said.

Wingstop also announced a major, multi-year initiative to create a global tech platform as it expands its international business. The brand is investing $10 million this year in the endeavor, which will include software development, hiring and more.

“We expect that we will be, in a sense, rebuilding the stack to make sure that it is scalable globally,” Morrison said. “Much of our component parts in the domestic platform do not scale internationally. And we want to develop a single global tech stack with this project.”

He added: “Now is not the time to rest on our laurels, but instead, we must invest.”

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