Wingstop Inc. Q1 FY2026 earnings call

• 2026 is seen as transformational for Wingstop, focusing on execution of strategies like strengthening operations with Wingstop Smart Kitchen, expanding reach to new guests, and launching new loyalty program Club Wingstop to drive towards AUV target of $3 million. • Made progress in speed, accuracy, and consistency with Wingstop Smart Kitchen, seeing improvements in Friday and Saturday dinner day parts, and delivery customer satisfaction. • Launching order-ready tracker by end of Q2 to reinforce speed of service. • Club Wingstop loyalty program in pilot showing improved retention, reactivation, and engagement, with national launch planned by end of Q2. • Widening top of funnel with Wingstop is Here advertising campaign, seeing new guests skewing towards higher-income cohorts. • Opened 97 net new restaurants globally, with unit growth supported by strong unit economics and broad-based pipeline demand.

System-wide sales increased 5.9% to $1.4 billion in the quarter, fueled by net new unit development, and more than offset the 8.7% decline in same-source sales. Total revenue increased 7.4% to $183.7 million. Adjusted EBITDA was $65.4 million, an increase of 9.9% versus the prior year. Company-owned restaurant sales increased by $2.9 million to $33 million. Royalty revenue, franchise fees, and other increased $8.7 million to $87.5 million. Brand partner margins strengthened in Q1. Opened 97 net new restaurants globally at a more than 17% growth rate.

• Updated domestic same-store sales guidance to low single-digit decline. • Full-year SG&A outlook range $146 to $149 million, including $3 million restructuring charges and $28 million stock-based compensation. • Global unit growth guidance 15% to 16%. • Net interest expense approximately $43 million, depreciation and amortization approximately $30 million.

• Atypical winter weather causing temporary restaurant closures in over 700 restaurants. • Elevated gas prices due to Middle East conflict stressing lower-income consumer balance sheet, impacting same-store sales. • Uncertain macro environment with risks to future operating results and financial condition.

Q: David Tarantino asked about traffic loss and tactical response; A: Michael Skipworth discussed similar reaction to gas prices as in 2022, seeing normalization and focusing on strategies to position brand for growth.

Q: Jeffrey Bernstein followed up on comp trend, April trends, and drivers for turning back to positive; A: Michael and Alex Kaleida talked about improvement in Q2 trend, positive signals from Smart Kitchen, marketing, and Club Wingstop pilot results.

Q: Andy Barish asked about marketing evolution and move to $3 million AUVs; A: Michael Skipworth discussed targeted marketing and opportunities in chicken sandwich, tenders, and group occasions.

Q: Chris O'Call asked about unit growth driven by brand partners and reluctance to pivot linear TV to offers; A: Michael Skipworth and Alex Kaleida talked about market-level playbooks, intentional development agreements, and targeted messaging in OTT and streaming.

Q: Sarah Senador asked about low-income consumer mix and value opportunity; A: Alex Kaleida talked about low-income mix, trading up into larger bundles, and loyalty's role in strengthening value proposition.

Q: Brian Harbor asked about California and Texas market performance and Smart Kitchen impact; A: Michael Skipworth talked about Texas markets with Smart Kitchen performing better, and improvement in guest satisfaction in delivery channels.

Q: Danilo Gargiulio asked about impediment to stores delivering within 10 minutes and repurchase vs leverage; A: Michael Skipworth talked about fundamental change with Smart Kitchen, and commitment to buyback strategy.

Q: Sharon Zakfia asked about speed percentage and delivery progress; A: Michael Skipworth and Alex Kaleida talked about progress in Friday/Saturday dinner day part speed and delivery channel guest satisfaction.

Q: John Tower asked about franchisee pushback on menu price points and innovation; A: Alex Kaleida talked about lockstep with brand partners on unit economics and focus on innovation through flavor.