Wingstop Inc. Q2 FY2025 earnings call

• Acknowledged support for Texans affected by Texas floods. • System-wide sales grew 13.9% to $1.3 billion; same-store sales declined 1.9%. Opened 129 net new restaurants in Q2, highest ever. • Brand health metrics improving; Wingstop Smart Kitchen live in 1,000 U.S. restaurants, showing faster speed and improved guest satisfaction. • New Crispy Chicken tenders performing well, driving new and reactivated guests. • International business growing; signed new markets (Italy, Netherlands) and saw strong performance in existing markets. • MyWingstop tech stack launched, digital database grown by 30% to $60 million; planning loyalty program pilot in Q4 2025.

System-wide sales increased 13.9% to $1.3 billion. Same-store sales declined 1.9%. Royalty revenues, franchise fees and other revenue increased by $8.7 million in Q2. Company-owned restaurant sales increased $2.6 million due to same-store sales growth of 3.6%. Cost of sales as a percentage of company-owned sales were 75.2% for the second quarter, a decline of 70 basis points. Adjusted EBITDA was $59.2 million, an increase of 14.3% versus the prior year. Adjusted EPS was $1 per diluted share, a 1.6% increase versus the prior year.

• Increased global unit growth rate to 17%-18% for 2025, up from prior range. • Reiterated domestic same-store sales growth guidance of approximately 1% for FY2025. • SG&A guidance of approximately $140 million, including nonrecurring system implementation costs. • Adjusted EBITDA growth rate expected to exceed 15% vs. 2024.

• Macro environment challenges, including consumer price concerns, job prospects, and general anxiety affecting spending habits. • Need to narrow brand awareness gap compared to established larger restaurant brands.

Q: Clarification on third quarter guidance and Smart Kitchen lift.

A: Michael Skipworth discussed third quarter comps and Smart Kitchen impact, noting current trends and easing comps.

Q: Follow-up on unit growth and international vs. U.S.

A: Michael Skipworth talked about franchisee demand and international momentum, highlighting strong pipeline and record pace.

Q: On value deals and consumer response.

A: Michael Skipworth and Alex Kaleida discussed value deals like 20 for 20 and consumer segments affected.

Q: On Smart Kitchen delivery mix and digital growth.

A: Alex Kaleida talked about Smart Kitchen delivery growth and digital mix trends.

Q: On new unit openings and Smart Kitchen density.

A: Michael Skipworth discussed new unit openings across states and Smart Kitchen's role in density.

Q: On marketing and addressing consumer challenges.

A: Michael Skipworth and Alex Kaleida talked about marketing initiatives and strategies to address consumer challenges.

Q: On unit growth normalization and labor leverage.

A: Michael Skipworth and Alex Kaleida discussed unit growth and labor leverage from Smart Kitchen.

Q: On customer visitation patterns and Smart Kitchen.

A: Michael Skipworth and Alex Kaleida talked about customer visitation changes and Smart Kitchen benefits.

Q: On innovation and daypart opportunities.

A: Michael Skipworth and Alex Kaleida discussed innovation in tenders/sandwiches and daypart products.

Q: On marketing fund and brand visibility.

A: Michael Skipworth talked about marketing fund growth and brand visibility opportunities.

Q: On delivery and marketing investment.

A: Michael Skipworth discussed delivery improvements and marketing investment in delivery channels.