Wingstop Inc. has released its financial results for the fiscal third quarter ended September 28, 2024. Key highlights for the quarter compared to the same period in 2023 include:
- A 39.4% increase in system-wide sales, reaching $1.2 billion
- 106 net new restaurant openings
- Domestic average unit volume (AUV) rising to $2.1 million
- Domestic same-store sales growing by 20.9%
- Digital sales comprising 69.0% of system-wide sales
- Total revenue climbing 38.8% to $162.5 million
- Net income increasing 31.9% to $25.7 million, or $0.88 per diluted share
- Adjusted EBITDA, a non-GAAP measure, rising 39.5% to $53.7 million
Michael Skipworth, President and CEO, commented, “Our third quarter results reflect the effectiveness of our long-term strategies, evidenced by 20.9% same-store sales growth driven mainly by transaction increases. We also achieved a record 106 net new unit openings during the quarter, representing a 17.1% growth in our system-wide restaurants year-over-year, highlighting the enthusiasm among our Brand Partners who are experiencing industry-leading returns.”
Fiscal Third Quarter 2024 Financial Overview
Total revenue for the quarter surged to $162.5 million, up from $117.1 million in the previous year. This increase was driven by:
- A $21.2 million rise in royalty revenue, franchise fees, and other, attributed to $9.6 million from domestic same-store sales growth of 20.9% and $9.3 million from new franchise development.
- An increase of $16.8 million in advertising fees, spurred by a 39.4% boost in system-wide sales and a rise in the national advertising fund contribution rate from 5.0% to 5.3%.
- Company-owned restaurant sales grew by $7.4 million, reflecting the addition of 10 new company-owned restaurants and a 7.3% increase in domestic same-store sales.
The cost of sales rose to $24.4 million compared to $17.6 million in the same quarter last year, with costs as a percentage of company-owned sales climbing to 77.8% from 73.6%. This increase was primarily due to higher food, beverage, and packaging costs, particularly for bone-in chicken wings.
Selling, general, and administrative (SG&A) expenses increased by $9.2 million to $32.3 million, driven by performance-based stock compensation, additional headcount-related expenses, and consulting fees associated with strategic initiatives.
Depreciation and amortization also rose by $1.7 million to $5.1 million, mainly due to new software assets related to the MyWingstop technology platform.
Financial Guidance
The Company reaffirms its guidance for approximately 20% growth in domestic same-store sales for fiscal year 2024. It also updates its 2024 forecasts:
- Expecting 320 to 330 global net new units, up from a previous estimate of 285 to 300
- Stock-based compensation expenses projected at around $22.5 million, previously $20 million
- SG&A expenses estimated between $117.5 million and $118.5 million, revised from $114 million to $116 million
- Depreciation and amortization anticipated at approximately $19 million, previously estimated at $18 million to $19 million
Restaurant Development
As of September 28, 2024, Wingstop had 2,458 restaurants system-wide, including 2,120 in the United States (2,064 franchised and 56 company-owned) and 338 franchised locations in international markets and U.S. territories. The third quarter saw the opening of 106 net new Wingstop restaurants.
Quarterly Dividend
In recognition of its robust cash flow and commitment to shareholder value, the Board of Directors declared a quarterly dividend of $0.27 per share on October 29, 2024. This equates to approximately $7.9 million and will be paid on December 6, 2024, to shareholders on record as of November 15, 2024.
Share Repurchases
During the third quarter, the Company repurchased and retired 93,617 shares of its common stock at an average price of $373.68 per share. As of September 28, 2024, there was $61.1 million remaining in the share repurchase program. Since its inception in August 2023, the Company has repurchased 815,431 shares at an average price of $276.43.
