Earning Date, Transcript Summary & Report

Earnings Beat Expectations: Wingstop Inc. beat earnings expectations with a reported EPS of $0.9, exceeding the expected $0.89.

Record Sales Growth: In 2024, Wingstop achieved record top and bottom line results, marking 21 consecutive years of same-store sales growth.

Same-Store Sales Growth: Domestic same-store sales grew by 19.9% in 2024, translating to a two-year stacked comp of 38%.

Record Restaurant Openings: The company opened a record 349 net new restaurants in 2024, resulting in a 15.8% unit growth.

Sales Growth Surge: System-wide sales increased by 36.8% to $4.8 billion in 2024, showcasing strong demand.

Strong EBITDA Growth: Adjusted EBITDA rose by 44.8% to $212 million for the full year, indicating robust financial health.

Restaurant Expansion and Sales Growth: In Q4, Wingstop opened 105 net new restaurants and achieved 10.1% same-store sales growth, primarily driven by transaction growth.

Digital Sales Transformation Success: Digital sales mix increased to 70%, reflecting a successful digital transformation strategy.

Digital Customer Growth: The company launched its proprietary tech stack, My Wingstop, which has seen a 30% growth in its digital customer database, surpassing 50 million customers.

Brand Awareness Expansion: Wingstop's brand awareness is steadily increasing, with a significant opportunity to attract new customers as it aims to close the gap with more mature brands.

Development Pipeline Strength: The company has a strong development pipeline with nearly 2,000 restaurant commitments under development agreements, the strongest ever for Wingstop.

Community Support Initiative: Wingstop raised over $2 million for St. Jude’s Children’s Research Hospital, demonstrating its commitment to community support and corporate responsibility.

Rising Cost of Sales: Cost of sales as a percentage of company-owned restaurant sales increased by 250 basis points in Q4 compared to the prior year, primarily driven by food and packaging costs.

Rising Food Costs: Food costs for brand partners ended the year just below the mid-30% target, which is historically higher than previous years, indicating rising costs.

SG&A Expense Increase: SG&A expenses increased to $31.2 million in Q4, driven by investments in headcount-related expenses, which could indicate rising operational costs.

Securitization Impact on EPS: The additional interest expense from the securitization transaction in December reduced Q4 EPS by approximately $0.05 per share, impacting earnings negatively.

Advertising Fund Contribution Increase: The advertising fund contribution rate will increase from 5.3% to 5.5%, which could lead to higher operating expenses for the company.