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Wingstop (WING) Q2 EPS Jumps 15%
The Motley Fool· 2025-07-31 07:08
Core Insights - Wingstop reported Q2 FY2025 adjusted earnings per share of $1.00, surpassing analyst expectations of $0.87, while GAAP revenue reached $174.3 million, slightly above the forecast of $173.71 million [1][2] - The company experienced a 1.9% decline in domestic same store sales, marking the first negative growth in over 20 years, despite strong adjusted earnings and rapid expansion [1][7] - Wingstop raised its quarterly dividend by 11% to $0.30 per share, indicating a commitment to returning capital to shareholders [11] Financial Performance - Adjusted EBITDA for Q2 FY2025 was $59.2 million, reflecting a 14.3% increase year-over-year [2][6] - System-wide sales grew by 13.9% to $1.34 billion, supported by a 12.0% rise in GAAP revenue compared to the previous year [2][6] - The company added 129 new restaurant units, bringing the total to 2,818, a 19.8% increase from the prior year [5] Business Model and Strategy - Wingstop operates a highly franchised, asset-light business model, with nearly 98% of its locations run by independent franchisees [3][5] - The company focuses on a limited menu of chicken wings and sandwiches, emphasizing customization and omnichannel ordering [3] - Recent corporate priorities include global expansion, investment in digital ordering, and enhancing franchisee economics [4] Consumer Trends and Challenges - The decline in domestic same store sales was attributed to pullbacks among lower-income and Hispanic consumer segments, with company-owned stores showing a 3.6% positive growth [7] - The introduction of new menu items like tenders and chicken sandwiches has attracted individual eaters, potentially leading to higher future group orders [9] International Expansion - Wingstop opened a record 21 new international locations, increasing its international store count to 407, with strong performance in new markets like Kuwait and Puerto Rico [8] Technological Initiatives - The "Wingstop Smart Kitchen" project aims to enhance operational efficiency through AI-driven demand forecasting and improved guest experience, with early pilot results showing a 5% increase in conversion rates [10] Future Outlook - For FY2025, the company raised its global unit growth guidance to 17-18%, while same store sales growth in the U.S. is expected to remain flat at around 1% [11] - Interest expense guidance was adjusted to $39 million for FY2025, reflecting balance sheet improvements [11]
Wingstop(WING) - 2025 Q2 - Earnings Call Transcript
2025-07-30 15:02
Financial Data and Key Metrics Changes - System-wide sales increased by 13.9% to $1.3 billion, while same-store sales declined by 1.9% for the quarter [7][25] - Total revenue increased by 12% to $174.3 million compared to the prior year [25] - Adjusted EBITDA rose by 14.3% to $59.2 million, and adjusted EPS was $1 per diluted share, a 1.6% increase year-over-year [27] Business Line Data and Key Metrics Changes - Company-owned restaurant sales increased by $2.6 million due to same-store sales growth of 3.6% [25] - Cost of sales as a percentage of company-owned sales was 75.2%, a decline of 70 basis points [26] - The implementation of the Wingstop Smart Kitchen has led to a consistent average ticket time of ten minutes [26][15] Market Data and Key Metrics Changes - The company opened 129 net new restaurants globally in the second quarter, marking a nearly 20% growth rate [9][20] - The international business is showing strong demand, with new restaurants in Sydney and Paris exceeding expectations [21][22] Company Strategy and Development Direction - The company aims to scale brand awareness, drive menu innovation, expand delivery channels, and invest in digital transformation [9][19] - The long-term target is to achieve average unit volumes (AUVs) of $3 million, supported by the success of the Wingstop Smart Kitchen [17][19] - The company has updated its guidance for unit growth to 17% to 18% for 2025, reflecting strong demand from brand partners [20][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged uncertainty in consumer behavior and spending habits but remains focused on executing strategies [10][22] - The company expects to return to positive same-store sales growth as the year progresses, particularly in the latter half of the third quarter [38][86] - Management expressed confidence in the long-term strategies and the potential of the Wingstop Smart Kitchen to enhance operational efficiency [41][43] Other Important Information - The company has increased its quarterly dividend from $0.27 to $0.30 per share, reflecting the strength of its business model [28] - The digital database has grown by 30%, now approaching 60 million, which will support the upcoming loyalty program [18][56] Q&A Session Summary Question: Clarification on third quarter guidance - Management noted some softness in consumer demand but expects to return to growth as comparisons ease in the latter half of the third quarter [36][38] Question: Impact of Smart Kitchen on sales - Early results from the Smart Kitchen indicate improvements in speed and guest satisfaction, with sales outperformance noted in the Dallas Fort Worth market [41][43] Question: Unit growth and franchisee demand - The company is encouraged by the pace of development and the record level of sold commitments, indicating strong franchisee demand [46][50] Question: Details on the loyalty program - The loyalty program is designed to create an emotional connection with guests, leveraging insights from the growing digital database [56][57] Question: Impact of value deals on customer behavior - The 20 for 20 bundle performed well, leading to higher average checks and demonstrating the company's ability to offer value without sacrificing margins [62][63] Question: Changes in delivery mix with Smart Kitchen - Restaurants with Smart Kitchen are seeing mid-single-digit growth in delivery sales, indicating improved performance [69] Question: Future unit growth normalization - Management is focused on disciplined and sustainable growth, with a strong pipeline of sold commitments supporting future expansion [98][100]
WING's Earnings Estimates Trending Up: Is It Time to Buy the Stock?
ZACKS· 2025-06-04 13:35
Core Insights - Wingstop Inc.'s earnings estimates for fiscal 2025 and 2026 have increased by 0.5% to $3.90 per share and 0.8% to $5.03 per share, reflecting year-over-year growth of 6.6% and 29% respectively [1][2] Financial Performance - WING stock has surged 50.2% over the past three months, outperforming the Zacks Retail - Restaurants industry, the broader Retail-Wholesale sector, and the S&P 500 index [3] - The fiscal 2025 EPS estimates indicate a 6.6% year-over-year growth, supported by the new AI-powered Smart Kitchen, which has halved order times and is now implemented in over 200 locations [7][10] Strategic Initiatives - The newly developed Wingstop Smart Kitchen aims to enhance guest visits and delivery times, featuring AI-driven demand forecasting and a customer-facing order tracking system [9] - Wingstop is focusing on menu innovation, digital enhancements, and expanding delivery channels to drive brand awareness and guest traffic, including a recent pop-up bar in Brooklyn dedicated to chicken tenders [12] Shareholder Value - The company has initiated a share repurchase program, retiring 2,196,768 shares at an average price of $258.58 per share, and declared a quarterly dividend of 27 cents per share, totaling approximately $7.5 million [13][14] Market Position - WING is trading above both its 50- and 200-day simple moving averages, indicating strong market sentiment and confidence in its financial health [15] - The stock is currently trading at a premium compared to industry peers on a forward 12-month price-to-earnings ratio basis, reflecting strong market potential [16][17] Analyst Sentiment - Analysts show optimism for WING stock, with 15 out of 23 recommendations indicating a "Strong Buy" and two indicating a "Buy," representing 65.2% and 8.7% of all recommendations respectively [19]