Wingstop(US:WING)2022-02-16 22:38Financial Data and Key Metrics Changes - In Q4 2021, domestic same store sales grew by 7.5%, and for the full year, it was 8%, translating to a two-year growth of 25.7% for Q4 and 29.4% for the full year [16] - System-wide sales reached $2.3 billion in 2021, an increase of 20.2% compared to 2020 [16] - Adjusted EBITDA for Q4 was $20.2 million, reflecting a 24.5% increase, with a consistent growth rate of over 20% since the company went public [19][21] Business Line Data and Key Metrics Changes - Company-owned restaurant sales increased by $1.1 million in Q4 to $17.1 million, driven by a 5.3% same store sales growth [17] - Royalty revenue, franchise fees, and other revenue rose by $5.1 million in Q4 to $33.1 million, primarily due to same store sales growth [16] Market Data and Key Metrics Changes - The company opened 193 net new units in 2021, marking a 12.5% growth and setting a new record for the brand [11] - The international business returned to pre-pandemic levels and plans to open new markets in 2022, aiming for over 3,000 restaurants globally [11][12] Company Strategy and Development Direction - The company plans to consolidate local marketing funds with national marketing, increasing total marketing spend to over $100 million [12] - A focus on technology investments continues, with a multiyear $50 million initiative to redefine the tech stack [12] - The company aims to scale its domestic footprint to 4,000 restaurants and maintain a target of 3,000 international locations, totaling over 7,000 restaurants [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-single digit same store sales growth despite potential economic slowdowns [26] - The company believes it can navigate economic headwinds effectively, as customer frequency remains stable even during challenging times [26] - Management anticipates year-over-year deflation in wing prices in the second half of 2022, contributing positively to margins [18] Other Important Information - The company ended 2021 with $425.6 million in net debt and a leverage ratio of 4.8x, showing improvement in debt management [21] - Wingstop Charities provided over $1 million to community organizations and restaurant team members since its inception, highlighting the company's commitment to community support [22] Q&A Session Summary Question: Same store sales outlook and economic concerns - Management is confident in achieving mid-single digit growth despite potential economic slowdowns, noting that customers tend to protect indulgent occasions like Wingstop [26] Question: Unit guidance for 2022 - Management is confident in the target of 200 new units, citing a strong start to the year and positive trends in chicken wing prices [30] Question: Menu pricing and consumer elasticity - Management noted that while there were significant price increases, transaction volumes remained stable, indicating strong consumer demand [35] Question: Marketing strategy and spending - The company is shifting to a 100% national marketing spend, which is expected to enhance marketing efficiency and effectiveness [38] Question: Impact of thigh product introduction - The introduction of thighs has helped mitigate wing price volatility and is expected to contribute positively to sales [45] Question: Long-term margin recovery - Management expects wing prices to decrease over time and is exploring ways to gain more control over the supply chain to stabilize costs [69]