Wingstop is testing bone-in chicken thighs in seven cities across the U.S. as the chain works to combat price fluctuations in the notoriously volatile wing market, the company revealed during a Q3 earnings call with analysts Monday.
The move is part of Wingstop’s “whole-bird strategy,” the chain said, an attempt to use more parts of the chicken and increase its amount of contract-based purchases.
Much like the chain’s wings, the bone-in thighs are crispy and can be tossed in any of the brand’s 11 sauces.
The bone-in thigh tests began about two weeks ago, and the chain said it is too early to release any results. A Wingstop spokeswoman said the chain hopes to have an update on Wingstop thighs early next year.
“Our research suggests it will be a fan favorite, and we’re excited for all Wingstop fans to get to try it soon,” CEO Charlie Morrison told analysts.
The Dallas-based chain said that, in addition to the thigh tests, it had recently negotiated a pricing deal with its largest poultry suppliers that “mitigates the impact of continued inflation of bone-in chicken wings over the near term,” Morrison said.
“This is really the byproduct of some really long-term strategic relationships with our supplier partners,” CFO Michael Skipworth said. “And they know that we’re buying wings year-round. We’re not just jumping in and out of the market or buying frozen wings. But they’re rewarding us for the long-term relationship we have with them.”
With rare exceptions, Wingstop uses fresh, bone-in wings. Many of the chain’s existing and new competitors, especially the recent slate of delivery-only wing concepts, use frozen wings, Morrison noted.
“The impact it’s having on us is more about what it does to the price of chicken wings because many of these new and/or emerging competitors or folks that have sold them before are really buying up all the frozen product that’s usually in the market at this time of year,” he said.
Morrison said Wingstop is not concerned about the new wing competition, including virtual concepts from major players like Brinker International’s It’s Just Wings operation.
“We know that they’re leveraging their kitchens wisely during a very difficult time for their business,” he said. “So I applaud the fact that they’re working hard to try and do everything they can to support their own locations. … Effectively, their virtual brand is operating the same as ours is. Ours is operating virtually quite well. We’re already on pace to generate over $1 billion in digital sales through selling wings this year. … So, we don’t see any impact to our business at all.”
As Wingstop previously noted last month, it notched another strong quarter for the period ended Sept. 26. The chain’s same-store sales climbed 25.4% and systemwide sales grew 32.8% during Q3, to $509.2 million.
All of the chain’s nearly 1,500 dining rooms remain closed amid the pandemic.
What’s more, Wingstop opened 43 net new U.S. restaurants during the third quarter and is upping its new store estimates from between 135 and 140 net new stores for fiscal 2020. At the end of Q1, Wingstop was on pace to open 95 new restaurants.
The chain has a strong new store pipeline going into next year, Morrison said.
“The real estate market is favorable for Wingstop, given the unfortunate circumstances of this pandemic,” he said.