Wingstop(US:WING)2019-10-30 22:20Financial Data and Key Metrics Changes - The company reported system-wide sales growth of 21.6%, totaling $383.5 million for the quarter [30] - Same-store sales increased by 12.3%, with an 18.6% growth on a two-year basis [31] - Adjusted EBITDA rose by 25.8% to $15.4 million [36] - Net income was $5.9 million, or $0.20 per diluted share, down from $0.21 in the prior year [37] Business Line Data and Key Metrics Changes - Domestic same-store sales growth was 12.3%, contributing to total revenue of $49.9 million for the quarter [31] - Royalties, franchise fees, and other revenue increased by $4.1 million to $21.9 million, driven by new franchise openings and same-store sales growth [31] - Company-owned restaurant sales increased by 17.7% to $13.9 million, attributed to same-store sales growth and acquisitions [33] Market Data and Key Metrics Changes - Digital sales accounted for 36% of domestic system-wide sales, an increase of over 1,000 basis points compared to the prior year [18] - The company ended the quarter with 75% of domestic restaurants offering delivery, with expectations to exceed 90% by the end of 2019 [20] Company Strategy and Development Direction - The company aims to drive same-store sales growth through increased brand awareness and innovation, maintaining best-in-class unit economics, and expanding globally [10] - A focus on technological innovation includes digitizing transactions and enhancing the online ordering experience [17] - The company is expanding its international footprint, with significant growth in Mexico and the UK [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the effectiveness of their strategic pillars and the positive momentum in the business [10] - The company is raising its full-year guidance for domestic same-store sales growth to between 10% and 11% [39] - Management noted that while wing prices did not increase in Q3, they expect a 15% inflation for the fourth quarter [35] Other Important Information - The company announced a quarterly dividend of $0.11 per share, totaling approximately $3.2 million [39] - The company is committed to corporate social responsibility, focusing on community engagement and reducing food waste [25][26] Q&A Session All Questions and Answers Question: Plans for 2020 and sustaining positive comps - Management highlighted the strength of strategic pillars and the importance of national advertising and delivery expansion as key drivers for sustaining growth [46][48] Question: Delivery growth and competitive activity - Management does not see delivery slowing and has observed continued organic growth in test markets [53] Question: SG&A growth and underlying investments - The adjusted SG&A for 2018 was $33.6 million, and investments are primarily in technology and support for national advertising [58][90] Question: Wing costs and competitive activity - Wing prices remained steady for six months, and recent strategies have shown a positive impact on pricing [62][64] Question: Update on the 2020 pipeline - Management is pleased with the results from international locations and plans to expand new relationships in 2020 [68][69] Question: Delivery economics and advertising - The negotiation with DoorDash improved unit economics, and management plans to advertise delivery in the upcoming quarters [105]