Wingstop Surpasses EPS, Revenue Lags

Core Insights - Wingstop reported strong Q4 2024 results with a diluted EPS of $0.92, exceeding analyst expectations of $0.86, reflecting a year-over-year growth of 43.8% [2][3] - Revenue for the quarter was $161.8 million, slightly below the expected $165 million, but still representing a 27.4% increase compared to the previous year [2][3] Financial Performance - Key metrics for Q4 2024 include: - EPS: $0.92 (Q4 Estimate: $0.86, Q4 2023: $0.64) [3] - Revenue: $161.8 million (Q4 Estimate: $165 million, Q4 2023: $127.1 million) [3] - Net Income: $26.8 million (Q4 2023: $18.8 million) [3] - Adjusted EBITDA: $56.3 million (Q4 2023: $39.1 million) [3] Business Model - Wingstop operates primarily on a franchising model, with 98% of its 2,563 restaurants run by franchisees, allowing for high margins and consistent cash flow [4][7] - The company added 349 new restaurants in 2024, indicating strong franchise confidence and economic viability [4] Menu and Sales Growth - The diverse menu, featuring wings, tenders, and sandwiches in 12 flavors, drives high consumer demand and same-store sales growth [5] - System-wide sales reached $1.2 billion, up from $966 million year-over-year, with same-store sales increasing by 10.1% [6] Digital Strategy - Digital sales accounted for 70.3% of total sales, highlighting the effectiveness of Wingstop's investment in digital customer experiences [6] - The company plans to maintain over 70% of future revenue from digital channels [10][11] Marketing and Expansion - Marketing expenditures increased to 5.3% of sales, supporting growth through enhanced digital marketing and national advertising [8] - Wingstop opened 105 net new restaurants in Q4 2024, showcasing its strong franchising model [7] Future Outlook - The company forecasts a global unit growth rate of 14-15% for 2025, focusing on digital capabilities and same-store sales growth [9] - Planned spending on SG&A expenses is approximately $140 million, with expected depreciation and amortization of $29-$30 million [9]