Wingstop(US:WING)2025-11-04 16:00Financial Data and Key Metrics Changes - System-wide sales grew by 13%, exceeding $5 billion on a trailing 12-month basis [4] - Total revenue increased by 8.1% to $175.7 million compared to the prior year [20] - Adjusted EBITDA reached $63.6 million in Q3, marking a 19% year-over-year increase and the highest single quarter on record [23] - Adjusted earnings per diluted share increased by 15.6% to $1.09 [23] Business Line Data and Key Metrics Changes - Domestic same-store sales declined by 5.6% in Q3, following two years of strong growth [5][20] - Company-owned restaurants delivered same-store sales growth of 3.8%, outperforming the broader system [20][21] - Domestic average unit volumes (AUVs) are now at $2.1 million, with cash-on-cash returns exceeding 70% [20] Market Data and Key Metrics Changes - The company opened 369 net new restaurants in the first three quarters of 2025, achieving a 19% unit growth rate [4][19] - The development pipeline remains at a record level, indicating strong demand from brand partners [16] - International expansion includes openings in several countries, with a significant opportunity in India for over 1,000 restaurants [15][59] Company Strategy and Development Direction - The company aims to scale towards over 10,000 Wingstop restaurants globally [4][14] - Key strategic investments include the new kitchen operating platform, a marketing campaign targeting new guests, and the launch of a loyalty program [9][12][25] - The company is focused on maintaining industry-leading unit economics while expanding its footprint [17][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a temporary decline in same-store sales due to broader industry trends but remains confident in the brand's fundamentals [5][25] - The company expects to return to same-store sales growth in 2026, supported by strategic initiatives [25][33] - Management highlighted the importance of operationalizing the new kitchen platform and launching the loyalty program to drive future growth [51][53] Other Important Information - The company has raised nearly $3.5 million for St. Jude Children's Research Hospital through its partnership [16] - A quarterly dividend of 30 cents per share will be paid on December 12, 2025, totaling approximately $8.3 million [24] Q&A Session Summary Question: What is the outlook for Q4 same-store sales? - Management acknowledged near-term choppiness but noted stabilization in trends as they entered Q4, with growth in key segments like dinner [30][31] Question: What are the key drivers for returning to positive comps in 2026? - Management cited the rollout of the Smart Kitchen, the loyalty program, and a new advertising campaign as catalysts for growth [32][33] Question: How long will it take to see benefits from the Smart Kitchen across franchise stores? - Management indicated that as more restaurants implement the Smart Kitchen, improvements in guest satisfaction and sales are expected to follow [35][36] Question: What is the impact of cannibalization on new restaurant openings? - Management noted that cannibalization has typically been around 1% and is more pronounced in high-volume areas [38] Question: How does the company plan to emphasize value in the current environment? - Management stated that the company does not feel pressured to discount due to strong unit economics and is focused on long-term strategies [43] Question: What is the significance of the new ad campaign? - Management expressed confidence in the campaign's ability to resonate with consumers and drive brand awareness [58]