Wingstop is ready to take on Manhattan.
The fast casual, whose sales exploded during the pandemic, is planning to open 25 company-owned restaurants—a mix of ghost kitchens and traditional stores—in the heart of New York City, the company announced during a call with analysts Wednesday detailing its second quarter earnings.
“The New York market is one with a lot of white space for our brand,” Wingstop CEO Charlie Morrison said.
Wingstop will open its first ghost kitchen in Manhattan in a few weeks, with many more restaurants to come. Morrison said the chain has long held back this area for expansion of company-owned restaurants.
“It’s well-suited to be a company-owned market,” he said, calling in with other Wingstop executives from New York City. “We wanted to make sure we had access to real estate that is reasonably priced, which we believe exists in this market. We wanted a good partnership for ghost kitchen expansion. A delivery-focused market makes sense for us.”
Wingstop on Wednesday said it had surpassed its record same-store sales of a year ago, with a 2.1% increase for the quarter ended June 26, or 34% same-store sales growth on a two-year, stacked basis. Systemwide sales increased 15.8% to $589.7 million.
Wingstop currently has 15 ghost kitchen stores worldwide, all of which have similar average unit volumes to traditional restaurants. With ghost kitchens, the wing chain can open a new unit in about six weeks, Morrison said. And, what’s more, the sales-to-investment ratio can be more than three times higher for a ghost kitchen Wingstop than a typical store, he added.
“You can invest in these things for a fraction of the cost of a streetside location and generate the same, if not more, volume,” he said.
The expansion in Manhattan fits with Wingstop’s broader unit-growth mission. The Dallas-based chain opened 45 net new stores in Q2, an increase of 13.1%, and has upgraded its full-year forecast to overall unit growth of 12% or more. The chain, which ended the quarter with 1,449 U.S. locations, reported it had opened more than 200 new restaurants over the last 12 months. Of those U.S. units, just 34 are company-owned. The chain has 175 international franchise stores.
As for Manhattan’s new Wingstop locations, Morrison said: “We’ll get them open as fast as we can.”
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