Wingstop Inc. Q3 FY2025 earnings call

• Priorities: Accelerate global footprint towards over 10,000 restaurants, national rollout of new kitchen operating platform, and deliver AUV growth. • Opened 369 net new restaurants, approaching 3,000 global restaurants. Implemented new kitchen platform in over 2,000 restaurants. • Strategies: - Wingstop Smart Kitchen: Over 2,000 restaurants live, seeing 10-minute speed of service, improving guest satisfaction, with Southwest region showing mid-single-digit comp delta. - New marketing campaign 'Wingstop Is Here': Showcases Wingstop in everyday life moments to broaden top of funnel. - Loyalty program Club Wingstop: In pilot phase, national launch planned for Q2 2026. • Global expansion: Opening over 1 Wingstop per day, progress in GCC, Netherlands, France, India, etc. • Partnership with St. Jude's raised nearly $3.5 million as a system.

System-wide sales grew by 13%, with trailing 12-month system-wide sales exceeding over $5 billion. Unit growth: 369 net new restaurants opened, representing a 19% unit growth rate. Adjusted EBITDA grew 17% during the period. Same-store sales declined 5.6% in Q3. Company-owned restaurants had a 3.8% same-store sales growth. Domestic AUVs are at $2.1 million with industry-leading unlevered cash-on-cash returns of 70% plus on an average upfront investment of $500,000. System-wide sales in Q3 grew 10%, unit growth 19%, and adjusted EBITDA grew nearly 19%.

• Updated domestic same-store sales guidance to a decline of 3% to 4% for 2025, expect return to same-store sales growth in 2026. • Increased global unit growth guidance to a range of 475 to 485 net new restaurants for 2025. • Updated SG&A guidance to a range of $131 million to $132 million, including approximately $26 million of stock-based compensation expense and $4.5 million for nonrecurring system implementation costs.

• Consumer environment cyclicality, potential longer duration of soft sales. • Execution risks of new strategies like the Wingstop Smart Kitchen and loyalty program may impact performance.

Q: On the comp outlook, is Q4 expected to be worse than Q3?

A: Michael Skipworth said they expect the trend to somewhat continue into Q4 just based on current data, but see stabilizing and encouraging data points.

Q: What are the key drivers to return to positive comps in 2026?

A: Alex Kaleida mentioned early signs from Wingstop Smart Kitchen, loyalty program launch, and new advertising campaign as key drivers.

Q: How long will change management take for Smart Kitchen benefits across franchise stores?

A: Michael Skipworth said as more restaurants execute Wingstop Smart Kitchen and deliver new operating standards, the gap will close over time.

Q: Any cannibalization from net unit growth?

A: Alex Kaleida said cannibalization has been concentrated on higher-volume restaurants in small footprints, with recent lapping of openings in single markets.

Q: Key messages of new ad campaign?

A: Michael Skipworth said the campaign showcases moments in everyday life, speed, quality, and abundance to broaden the top of the funnel.

Q: Testing of new ad campaign?

A: Michael Skipworth said early feedback and testing are positive, with the ad informing new guests about Wingstop.

Q: India market agreement?

A: Michael Skipworth said finalized agreement with a proven multinational operator in India, seeing over 1,000 restaurant opportunity.

Q: Exposure to lower income and Hispanic cohorts?

A: Michael Skipworth said broad strokes show comp trend change, but brand health metrics remain encouraging.

Q: Driver of development outperformance?

A: Alex Kaleida said market-level playbooks, international expansion, and Smart Kitchen rollout drove development outperformance.

Q: Frequency trends?

A: Michael Skipworth said dinner daypart saw growth, and Alex Kaleida noted tenders and 18-25 age demographic as related to frequency.

Q: Smart Kitchen franchisee feedback and rollout?

A: Michael Skipworth said encouraged by Smart Kitchen rollout, seeing speed of service improvements and guest satisfaction impacts over time.