Wingstop (WING) 22 Feb 232022 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Wingstop Inc. Fiscal Fourth Quarter and Full Year 2022 Earnings Conference Call. [Operator Instructions]. Please note that this conference is being recorded today, Wednesday, February 22, 2023.

are Kaleida, President Chief Senior today Officer; Chief Financial call Alex and Vice the Michael and Skipworth, Executive Officer. On President and to now would like turn conference I to over the Alex. ahead. go Please

the Thank you, XXXX conference for call fourth and full earnings fiscal Wingstop. and year quarter to welcome

results earlier and this Our are Investor our on were at website published Relations ir.wingstop morning available com.

that actual subject These of future Our to guarantees to risks from discussion currently not numerous today what our statements expect. includes are could and differ materially uncertainties forward-looking results and are cause statements. we performance

could Our condition. SEC filings affect describe our operating various financial risks and that results future

or We use results prepared a accordance useful of be performance. in substitute with certain can in Presentation comparable release. to earnings GAAP. contained non-GAAP isolation financial such are information we be GAAP as believe evaluating our not measures our that for in should Reconciliations measures in considered

we to many a you I the that please to now Q&A for would as like possible keep participants to session, follow-up question. to call ask to each With Lastly, Michael. over the a and that, ask allow question turn X as

to I may record we another Wingstop. Thank you, another our of year we the be couldn't spoke delivered being everyone. came Alex, deliver morning, despite the for what perfect recall, Wingstop described of and faced Wingstop. with you a story storm prouder together as XXXX. our about But of We business as a at half in industry-leading half good year year second how for first team

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globally, growth achieving XX.X%, adjusted development. and rate, this international EBITDA XX.X% for This was representing new growth record of XXX our showcased to through We another units businesses. translated years of domestic for both a the model. opened strength our highlighting And net record asset-light year

strong global at of restaurant pipeline partners, stands brand have development our As XXXX, commitments. we we base enter X,XXX an roughly energized and

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supply And suggests strategy of our favorable average that sit and as continue a XXXX. million best-in-class. the backdrop seeing commodity $X.X mid-$XXX,XXX are investment we here less than to an through today, an our progress of At leading to combination truly partners chain payback, in initial unit translate the indicators volume brand and range, against returns X-year

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awareness, driving Our $X further consists achieve expanding and of leading our transformation of target channel, to platform. of and path marketing innovation, our AUVs brand approach digital menu clear is delivery our million a data-driven

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in for a chicken just and to our chicken AUVs not our XXXX an and path on craveable tossed have Wingstop. we exciting innovation. launched $X bold menu the version, plain is lever distinctive XX but and We million sandwiches, flavors. sandwich, and spicy Another year soft was

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believe Rub. our Carolina Barbecue our LTO, Honey economics. XXXX, chicken and, Hot with mix mix We sales cost long-term with a As which innovated we also range, successful flavor sandwich in we in doubled most yield of more -- launch food our flavors, unit our that to the we would introducing XX%, further low our in win In followed continue to a see path LTO. boneless we leading occasions, XX% excess cases, flavor levels typical achieved Honey both Hot Dry level strengthening

flavors marks have from fully-stocked high of testing. We a with consumer pantry

cravings continue satisfy the Wingstop in with to will look fans We to XXXX LTOs. flavor of additional flavor

Another expand growth lever delivery for provider XXXX, channel. a our channel Wingstop in took is second opportunity delivery in to And with to we the Eats. our Uber

And build size are just almost and occasions. We delivery are delivery. additional the business. Eats awareness scratching double we an us avenues the opportunity marketplaces see our to DoorDash of for capture Uber to and surface incremental on

of The advantage a significant platform investments in advertising, us continues our in acquisition increased platform the with of launch sandwich, catalysts billion technology to in from chicken new national digital $X.X nearly for digital and retention growth level generated our the competitive be during were digital and best-in-class XXXX. Our sales guest for rates quarter.

Wingstop experienced seen back pre-pandemic at has is different. we've behaviors, what to industry the revert consumers As

represents Our build our we only help strategic digital mix drive growth of in XX%, greater an has every goal new personalization will and in further stickiness which digitizing achieve giving We QX $X frequency we've to our the further unit excess believe to in-source us targeted in platform will believe sales confidence multiyear combined strengthen growth and have our the transaction. economics. significant digital expand opportunities, of levers aspirational have above fact, reached and achieving AUVs sustained million, guests transaction the in of these high Each investments acquired. components us and in of all-time

I'm also markets I the opportunity not their new of for both excited these launched Korea. could the In I've and progress more really we've markets. Canada excited markets. X our markets: and about be in to potential in for visit X for had months, the both openings, the last international international Wingstop

brand is are market already count above our million. opened their pacing market, Canadian ahead with pleased our sites. the Wingstop U.K. where following playbook development Both Our restaurant successful and of XX globally, schedule. $X We the AUVs and mid-January now for the is of market opportunity pipeline in markets showcased from the Korean

development exciting I business our and business growth, been will the outside for new fuel -- for of Wingstop to successes markets our to to the investments lot believe There our Our we've supercharged help excitement making speak and U.S., growth. is their early of remains a continue the support international brand demand pipeline.

gives consider continue to to Wingstop another the you We're sales to in well transactions grow, great the strength in a with any the our is to XXXX for guiding us XXXX mid-single-digit sales navigate exiting to macroeconomic brand strength partners economics driven growth year. And have momentum. If of of levers, unit ahead. same-store and uncertainty confidence outlook our the of with by our ability enthusiasm the growth our is strategy this, positioned and what record combined

net pace of restaurants unit maintain rate. and to XXXX, new well opening our which opportunity see XXX in above X-year also X- accelerated growth We is approximately this growth targeted to anticipate

as to our to to share Good ESG efforts, Flavor to refer we news hand A area giving around Flavor platform I'd what focus in is communities Before in the call key the serve. we for Good. I our like exciting Alex, back which some for

their mission passions. the in Wingstop in is our communities engage youth Our pursuit to Charities' of

Our scholarship college. charities' team attend program first to and supporting assistance of their a who grants, core generation community the are consist team members in programs families member

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partners to and be ahead Support to as With for about brand deliver to close well in the excited over Alex. us team these restaurants the Global the couldn't in position all thanking incredible opportunity like beyond. results. call and I turn our commitment their I'd for Wingstop work I'll as members and the more to XXXX our Center by that,

time, Thank our of year and consecutive we XXX how same-store demonstration of of first uniquely net million XXXX EBITDA results than in Michael. restaurants during you, than is growth, long-term our more a the sales strength strategies Wingstop adjusted more XXth $XXX year. generated hit and for positioned. the are great new We the opened

Before XXXX I dive operating into week, that an fourth the for a which the or represents year. in prior results financials, include versus reminder XX-week the XX-week a period quarter a brief period a XXrd week extra

apples-to-apples As are a identified. result, comparisons not unless year-over-year strictly

X.X% during versus since is of and excluding XXrd $X quarter fourth domestic from Our revenues, fourth period, and the associated was Royalty quarter, week, which by million sales sales $XX franchise estimated growth sales of million franchise fees same-store by nearly openings the the in comparable year XX.X% the in rate $XX the additional impact system-wide year. prior the with XXXX million increased year prior billion, week. the revenue XXX When driven a in full other revenue an growth XX.X%. system-wide the totaled $X.X net XXrd primarily increase

and chicken comp week. a in Company-owned $X.X year, costs and XXrd of food Cost restaurants net to half. million by second wings. sales, QX sales to percentage primarily versus driven decrease of strength a sales the expenses of preopening increased XX% restaurant by cost a transaction points by and $X.X the in XXX fourth X to growth, primarily million basis by of additional X.X% new comparable excluding growth, prior sales year period the of speaking entirely Our increase was driven prior from same-store sales bone-in in our as decreased quarter the company-owned due restaurant transaction by in the compared driven QX

a our wings anticipate strength. today near-term outlook we in exiting We for versus breast This one our XXXX. deflation be by Based approximately $XXX,XXX driven total comparable the unit year-over-year by basis bone-in impact economics favorable was partially of year from of year modeling commodity, approximately by offset $X than are sales the what of XX%, know brands significant improvement from to position is in and not stock also period of of million prior cost were implying for XXrd we an compensation in $XX.X the more few commodity experience only week. a investments to and points XXX expense. for on The SG&A meat. full increased versus XXXX but decrease to an talent XXXX a and core purposes, million,

by non-GAAP XX% of in of adjusted was a from million And estimated the When the We the $X.X XXrd the totaled adjusted increased adjusted $XX.X an by increase delivered impact, EBITDA, fourth measure, which XXX%. prior the versus earnings $X.XX, earnings share, XXrd increase the estimated per year. a week, the impact the of excluding measure, a nearly diluted year. million. quarter. includes prior XXX% when versus $X.XX per share an XX% non-GAAP diluted impact Adjusted quarter, in This EBITDA increased excluding week,

model asset-light continues franchised strong deliver flows. to free cash highly Our

end fourth had quarter, of we debt. million As of $XXX.X the net the in

XX-month debt strong of at and our trailing first transaction, delever The is X.Xx X.Xx, growth cash quarter. a adjusted underscoring lower at ability free of for generation. Our end adjusted timing flow EBITDA combination the a through to which EBITDA was net quickly full last our to the than debt

XXXX, our March stock, and March remain a of XXXX. will capital as quarterly record a declared This of the regular We common shareholders share of Today, to our million per on of dividend XX, model. has $X.XX demonstration through paid returning of $X.X shareholder driving stockholders approximately of to strength value dividend our Directors totaling of be XX, dividend. to committed Board

Now our outlook XXXX. to turning for

from for you remain sales our strategy outlook growth we of today, our mid-single-digit and As heard in us same-store confident XXXX.

We development translates maintaining more increased units. pace with net to unit This growth year. also XX% prior an anticipate of approximately of XXX versus a than new the

compensation is occur anticipate quarter we to to the $XX X be XXrd $XX.X restaurants translates adjusted purposes, in estimated expense. in opening of openings million company-owned the excluding XXXX. $XX.X to XX% stock-based million to new and of fourth estimated likely including when of modeling guidance For million million, XXXX between growth versus an with approximately impact This outlook EBITDA week. SG&A the $XX

team Wingstop year. have achieving please brand. Q&A. thank helped XX top and and becoming line record for that, that throughout global open brand deliver like members I'd to to a now us the confidence dedication in our partners system us restaurant I'd With commitment Their the Operator, of the questions. the incredible to gives another vision like turn

[Operator Instructions].

Our first from from comes David Tarantino question Baird.

So, could question's strong key investors was of Congratulations if is major And questions hear this on of I strong to color, such of results. any outlook. and in My second half had comps you've the And in you cycle planning you to related how confidence to drive you the first, such the XXXX. second a portfolio XXXX. that that performance you've on year? secondly, your started I expect the second cycling the would year then whether you comps year levers or describe how out in pulled great. of be you to how are half the one the guess, get maybe the the wondering, all to half in from when And lot play I

get Yes, I'm that asked really important, Thanks. we that where you spot. I Wingstop hear And if because in positioned, our tried in a think to But happy really about across that's a question X unique and actually that remarks. know I is lot. prepared it's it's we that think you message

category as often of being one. to in ourselves heard You've refer a us

But around yet we significant making ladder still dollars to pull our in about a scale a there they gap But believe of progress. in executing that we're growth million brands ad is brand have AUVs XX% $X $X.X And all a to the that million. had in and increase north awareness. are of big the that today could to remains we closing continue and we opportunity up XXXX invest to part other opportunity think against, will We from national strategy there. levers did when our you we that fund

about single-digit 'XX that our system continue a scale the more our example small gap about awareness. sales quarter, maintained brand talked those in mix of fourth our think it just ended where that sandwich chicken in with great we We Chicken for there gives opportunity a the And in a more of ton the And growth where fund a is 'XX Wingstop. with and and sales think, Interact brand. XXX consumers we as there's win alone, continue brand. the growth high for lot of sales U.S. sandwich in the to is pleased know you There today, we we to of that and chicken to We're of I believe are million ammo us advance chicken fraction we will driver from that sandwich, years mix, where drive innovation. engaging sales but have multiyear believe occasions. are out to multiple consumers to those sandwich

And other then tenders, to for occasions really can provider also just of our north mix sit and for Eats businesses We to who consumers we here their you we same pull think recently heavy adding delivery nationally. talked we off-premise similar And is second our of is consumers today, channel benchmark see is are Uber. behave win. Uber another about as that XX%. delivery delivery about Wingstop, more likely delivery, where exciting us us where those against and business to lever

that growth a channel. see in we So significant

unique that digital expand, only another that. And transformation which are there, consumer starts with us from businesses Uber our platform for digital just business around think and the to know expanding. engaging to you're continue again, continuing we on seeing behavior we're digital not get pre-pandemic to further retract grow about that starting in see scratching business with there's And conversations we is of with to those the of all more number the back is there revert behaviors, then surface industry brand. opportunity to to the on attribute our Wingstop actually ours to as we based you're Eats know and And their users and

And helping brand. of engine that data occasions, lot more powerful marketing bring into that's a and win given guests the new that's us frequency, drive feeding us

all business the those of impact, David, X-year to And so of us to I multiyear but a yet really of think our those that levers, give million. of impact it's and $X culmination things that a AUVs -- scaling sight aren't line north

I think to is all gives this still so outlook a come And there what a out and confidence that to environment uncertainty out out guide is of sales same-store fair amount of us for XXXX. come but where mid-single-digit there, in to

comment Great. year has Any started? the how on

we Yes. posted We QX, saw the build obviously, of saw comp David, comp October, for saw think an quarter, X.X% we've -- that comp X% obviously about being throughout that as you talked driven XXX% momentum QX. we how by transaction growth. in that, we our about is And being and the signaled

it we momentum us And we think a starting gives so think lot XXXX. about of great as

comes Barclays. from Bernstein next from Our Jeffrey question

the revenue being on growth. Just driver unit other key

'XX another growth. strong year XX% You mentioned with in

unit U.S. international. to maybe related? you macro-related And then follow-up. new can bit growth the broadly. whether elevated talk I And around a have Just environment, current Just that or wondering interest trying at whether if about rate in get franchisee more all little concerned versus existing there's any X sense versus a markets,

current as strength, a model or about, been, key something excitement of a really as brand community our equally ever grow. is in their you of economic some the but perspective. is in prepared to growth component we talked Yes, We're we're more a it's as at most to unit continue think fourth seeing story we partner on and great -- I top and from strong Wingstop. the story the importantly excited positive. remarks, long-term really about, sentiment with as they're the quarter real is mentioned, line as it our lot is And seeing talked it's really is the creating probably But about what about unit P&Ls

isn't And that excitement the just U.S. in

in. XXXX, in being from the emerging but for continuing what the about target development And we we brand, in executed of markets gate, of had we've similar our into the that markets we so as volumes strong not The and results haven't continuing perspective. really U.S. to XXXX our development international presence of is the excited U.S. well with only what see that we in we're some a really of strong to really outlook we're for seeing as a another some out XXXX We're domestic year pretty against mix encouraging. expand footprint. those expand And early strong to to outside versus the similar our delivered in

And Alex. Understood. the then for follow-up maybe

I Just usage, you I Xx. your to about, historical at X.Xx. talked the cash you're is said you target think believe Xx

just you related in as how continue you're used. potential elevated not could the update an and I'm be ratio fall supply think your whether let wondering, environment, to to or So cash or else investment there's willing whether this chain rate to about cash, one, current

or and cadence shareholders. volatility our IPO, capital a do on provide return to Thanks us our taking have over our costs years chain seen leverage model built question. our that Since more million opportunistic, being of clearly That balance that -- sheet the capital we've returns. model maximize on And capital. from shareholders. best-in-class you've said, our our we cash could in a allocations include, returned to business we've such returns on talked other is And asset-light be supply in before, that to $XXX food up. mitigate than focus to as as for our And that to for our the of strategy

dialogue use with of continue best that our prioritize really Board that we'll have and to mind. to in capital look with So the

from comes from Citigroup. Jon Tower question next Our

I'm is. the what royalty relative been clarification to rate And past quick a you just then curious X so. explain then the to a pretty The that. nicely follow-up or what Just effective stepped that fourth question. in up could seeing if and year in we've quarter

of little years that and so of that probably, saw remember may had And that in a renewed a flowed fund flow-through bit. we into you that's and a ad this the you vendor other well. fourth Jon, effect several big little quarter you quarterly we that revenue. a rebate, But bit as pop the retro in results, that if what's our ago, renegotiated But we actually impacts on a will, contract had the number. chunk in the

going So that's sustainable royalty just level forward, of a rate then be going not to a onetimer?

Yes, Jon, you can point as effective rate about. back to a quarter good X to think

then can thinking of the markets making good of pour growth And like onesie, at across Can you the X great. unit about probably look policy like side? allocation I there, not opportunities Understanding not these capital stores. capital, company I'm particularly get on capital new be into AUVs, more towards years the unit why but be and if increasing, $X discuss paybacks. less paybacks guess on that twosies out back way you paybacks company than would it the uses here with looks different Okay, growth more targeted you that your Manhattan market major of may assuming there million considering

Yes.

to the came of seen And you'll to we're shift I those think required allocation and us can. believe of Jon, towards us pursue acquire don't capital shareholders. present a the designed Worth And you'll be require a opportunistic we fundamentally great as strategy, for think, I our a I advantage the would Dallas-Fort needed over of fourth quarter that opportunities, And restaurants up themselves. think, opportunistic of company approach continue But to us take couple quite see where shift our example which because a these you've was infrastructure great us some frankly, continuing see be opportunities G&A our for the a restaurants we where the we investment, us they more then advance saw fundamental in I franchisor. think to return years, to, area. are

question Cowen. Andrew next from Our Charles from comes

pretty XXXX a lot we've about and industry, have build that range. But CapEx the is mid-$XXX,XXX know a hearing to increased about you in talked new I guys cost stores. been consistently

to a the so able keep pretty what consistent just And you of have been curious level help trend to mitigate guys store. CapEx and per do industry

Thanks the for question.

building we're an up areas less little inflation. model the efficiency have in-line think just we're little I but you've costs little seen out of in quite think bit, bit fact we build inflationary And speaks space, a of a labor, a our the requires the a immune maybe it not to that and more which tick I of bit frankly. of some being the seen construction, that lot to

little I think so that's bit. us a helped And

been from But a chain system the a help perspective of not brands an I would development entire seen a the for supply you this lot of price some address have disruptions that perspective. will, from and negotiate say other but if us only strong from we have or favorable proactive chain pricing also help get supply us to buys in side of front equipment negotiate,

that's well, bundle. Okay, to a bone-in this I as helpful. wanted year we ask And saw then earlier

on that value use in certainly bundle? of bundles decision more. that. in guys wings the bone-in of But years, it's a think the thought always defense first of do I time of kind is prohibitive a you do we've is your and wings more these to using obviously, what's of cost last defense. seen I Usually in the couple

your wings beyond the what So just curious bundle. to of drove decision cost the lower bone-in do about

a And up. bulk may targeted towards in hitting this of to audience, to have a been could, a those test perform. a understand would resolutions who targeted but those how for the so of included was you you to say it degree, bundle audience bit gym pretty it and Andrew, was set that and New us Year's wanting bone-in little Yes, was some

us. And so for it short lived was presenting value. long-term I would it definitely with approach I but interesting it's well a consumers a that audience, pretty be argue shift pretty nonetheless, to performed but But our test know going and around was fundamental don't an contained in

it. bring my I'll so more for if I'm Year's back, resolution New you that to definitely forward it use looking

Andrew. Thanks, deal. Good

comes Brian question Stanley. Harbour from next from Our Morgan

your think labor have last tailwind this same-store assumptions there's do favorable sales inflation, year. you any year? not of but were take In kind price Do they still will Because commodities obviously, quite the are you that? any franchisees outlook, maybe around

we Yes, back to talked to to a consist around the price, approach a little and approach, we roughly that historical this which took XXXX approach about different to would X impact a bit consumer. as disciplined windows what with we expect X what to before bit little of of in the overall refer considering our But historically. points done Brian, to X we obviously of little of that's XXXX, of in we've get a about bit pricing, a

great. some perhaps? on have I of And Uber tick know the maybe the digital year could comment from kind Eats maybe bit delivery it did -- like maybe much little and earlier seen up looks how driven in Okay, then might and how a that from mix you just you've seasonality. of that transactions But of drive on that been delivery by side.

been it's Brian, interesting. Yes,

strong that of and channels. of spot not even but in similar we've takeout. just delivery growth across unique all non-digital We a We've in seen are all seen little across really so growth kind bit channels, takeout a digital

call X or out out any to there's area to contributed so really And that. not that point

The comes Joshua Stephens. next from from Long question

the maybe the some orders of have chicken of guests been into and in in into in of of bringing brand? the you've seen like consumers. And lunch from the shifted resonating of what Curious part? party sounds kind have usage. usage guests maybe on that transactions is larger in menu It with some terms you've what the more new individual Or day and frequency learned terms sandwich and it is innovation working you

seen -- anything or and sandwich incremental. question. the trade-down actually to to seen prior similar be the seeing highly part, It for which mix maybe orders to continues a we're to comments, over we've thanks an Josh, We've anything the prove like And our versus chicken lunch like Yes, like be we'd to add-on day see. it really that. nicely

us say in as would drive it guests And as I well bring frequency. helped new

north approach think development chain our of an because but will as sandwich to be that this brand also we've line sight can term, supply only business, could perspective. a to that long And and shared partners to predictable food sales a excited what for costs overall chicken we a allows see we part see mix from bigger as we in to be perspective us before, see grow supply game changer so of become can scenario, XX%, boneless And have we deliver XX%. to driver our about mean from we a where which strategy where we're could chain our continue the a not a low perspective in of our

Great.

share of that, as a that who you in that that? or involved of particularly bringing where bringing to And not I as innovation, as helpful. making with some want historically in imagine near-term and of to customer any the the kind progress in you the there's to slow terms of helping kind heavier new about insight As some efforts could opportunity, guests chicken bridge desire build and on lot QSR be gap a you of communicated these would of strategy sort are Are how Wingstop? follow-up, you there close think menu be of to your speak but sandwich, given does go a may you

Yes, it's bringing it time traction look into times interesting that at seeing what's question. you of is about frequency, if month we're or heavy a brand. QSR lot And quarter. really great remains X a great a a against X them our consumer, still And the

that's occasion. a low-frequency occasion, this with So think, guests still that pretty allows that to engage I differently. us Wingstop and uniquely in is us that occasion something, space presents indulgent And

those think little it opportunity for influence sandwiches, we a that as as over an time do a about occasion. to high-frequency we But see be And of frequency. to bit tend more chicken

in something is also to opportunity know we our working the it so continue to of sustain you as exciting an And nonetheless million. guests impact we're against. target have continue more, acquisition will AUVs of of achieving but not but us new only which we'll help us ultimately north frequency, $X But to for updates provide

The from Haskett. next Gordon Jeff question from comes Farmer

sort performing restaurant how in different tack to of understand Just the trying curious, early a on is XXXX.

you from early large last So impact XXXX saw us year? just can Omicron an how of you in remind

question. see to didn't thanks for the real in our impact a Yes, yes. XXXX. We Omicron actually from back business Jeff,

We majority the that rooms at see our really closed February January an period. time, impact. If period, didn't you of time were time recall dining the in

hear to total well? And benefit you said lion's XX% in that you of at then Is line the think is as going COGS it down guidance on unrelated, sales the on or are XXXX, operating I did the that I see year-over-year. of for, labor basis points other cost or roughly share to XXX it coming assume safe

of the you Yes, will line. COGS that's as chain supply the the our in our seeing Michael mentioned with commodities be our as see the expect through on that indicators majority remarks, combination in Yes, to -- on executing right. of what well we're leading as And the strategy. could prepared it

from Strelzik next Our comes question Andrew BMO. from

of much on the there seem sales viable particular. talked food chicken an you and but into comment you the on can And in? broader really strategy playing breast at thinking made us maybe that the about as that the Can wanted which buying partnerships, bird down point? whole then on where options, follow this you to a of of kick things, that frame of Just up being they less now, the bone-in the in chicken on the your or is timing always as focus just different you on line, in lot kind impact plant, starts to there? prices various are. stand a more to you've cost give terms on How Obviously, which wings update

that that of chicken mentioned, And is really boneless with first of allows pricing the us in whole midpoint strategy the of a launched combination chain conversations a sandwich Michael heading chicken strategy. different as -- supply of is component our And year cost-plus mix our suppliers. component year, lapping our the so reached question. be Great the the their of breast Last prices peaks where that. we'll component, a Yes. around to bird with more have that's

not So imply chain the we're of the only our leading what part year, as the benefits it's we supply seeing also we're executing. indicators, what and in think about that about first

into approximately does in cost that back a low XX%, imply food our XXXX. you about if XX% So

strategies? any time. about ways You of just the And update and maybe various about some try partnerships chain on plants chicken conversations on great. other there how Okay, broader thinking stability to talked over the some you're and supply to create

Yes.

We very from solve of we're conversation partners. or obviously of the focused, active because to continue a it little outcome, where which further differently structure what a some in us willingness with move talked the the bit which execute agreements to And the for to is really, I pricing lot which our think a minimize are be and those before, we've this some is to market volatility potential is to about of spot and and further efficient dialogue in win-win trying conversations way a for us for, food is costs. away

with great So lot for we're has progress, food to and think it a seeing what of costs targeted XXXX. I able to do signal we're

Wedbush Securities. Our from next question Setyan comes from Nick

amazing quarter. Congrats the on

base a growth growth has terms the couple on question of of the trailed year-over-year comp. now AUV the in stores comp and where It's comp by substantial like a differential amount. the AUV a Just between the quarters

going on delta wondering should Just that going there we forward. how and think about what's

out AUVs comp bit And impacts gate seeing at still delta strength entering that AUV Nick, strong base, because and that exist comping the thank a you. is we you're really really in little hope restaurant the continues calculation after the average what the year. is new of first to that comes higher of that obviously which openings coming

good So for we dynamic which at is play, the that business. a you're pretty seeing think thing

the we on So going about of forward. the think of trending year volumes sort maybe right the been how and how in recent comment should just AUVs that's X sort opening now past and

years seeing of X $X.X year a out about $XXX,XXX. Nick, And average -- we out alone, were million, year just out this coming of Yes. $X.X it's few at vintage on coming recent ago, million. north volumes there just of X

marked year which are versus pure increase can year-over-year you see the just So of restaurants coming growth. influence AUV can ultimately kind a X, in the how out change in comp of

And just XXXX? then for CapEx

high that XXXX, It in saw will Yes. you fairly be in mark. with XXs what consistent

comes question from next & Co. from The Michael Tamas Oppenheimer

of You delivery talked over your business double about plans the to size time.

So other can getting about maybe reach simply we're the industry? consumer across think the goal, of some that will at time that you into your of Wingstop? methods to talk specific a when to base headwinds Do delivery some from particularly seeing some you shift strategies just delivery of cause

Yes.

a I for and just there, to opportunity awareness. X that's that's think tied the opportunity broader it's really Wingstop

low. Our platforms awareness really on these is still delivery

But or anything we'll our actually so strategies of on ad promotions it's different And using we're specific build some whether platforms. advertise some to it's that, of continue to those than through other not executing the dollars that.

strong and that's Wingstop. something business, it know of about. awareness actually we're a questions and a awareness. our continue opportunity excited that growth at I guests scale about there's talked then perspective new delivery And the just speak we've broader to huge to seen earlier, have scale really we industry It's from in acquisition here delivery But we business, we as our

can overall terms maybe Okay. consumer your legacy a either you can that of or gap? talk -- or mature about Is spend? difference think about between that And why of like new a do consumer talked the what to there noticeable difference then frequency do versus you then in close And you X? more you exists base sort the base and

heavy mean, little time, less we've think bit over a the I which into ethically more brought diverse, I income. about, a Yes. those talked little QSR of brand, higher guests are we've bit

seen about lower-income our mix to XX%. we've of shift consumer that down so And

but say a wouldn't difference material. is behavior anything there I so little bit of And a in

not same. average the with the about different materially is they frequency engage The in how check is The brand.

brand that historical really opportunities or shape we're seeing our some of I to and introduced customer. some the could guests chicken to longer-term sandwich, than be legacy different is what bit think a new speak I via are that these little think,

comes from Raymond question next Brian from James. Our Vaccaro

mentioned high-level stands bogeys. you're mix, in mix each And metric, boneless this On see sales you the sales adding then where lift above you a ballpark and platform? willing on delivery since their boneless us seeing Eats level-set just Uber On greater XXXX? exiting also you getting the you've out be Could delivery. couple to sales you delivery, would XX%. currently delivery that laid XX% than call, And the peers also often of eventually to of noted on

we've growth Yes. We've is the to strong to mix but we've two, little reopened tricky levels, bit what's One on things asking continue a And And us extremely seen is delivery across then dining our of rooms. seeing we're couple comment last you're happen. over question with channels. year, a strong. the perform seen all

we've it's just so But below dollars XX%. an sales from hovering seen from absolute And in a perspective, delivery still perspective. mix really growth strong

that's to something speaks we opportunity comment the of earlier almost the double which it. made strong, to It's

sandwich to we're the that. so And excited Historically, in highs seeing and for seeing And about right boneless and we're brand. mix, obviously, now about. the contributed low XXs XX% approach all-time we're chicken mix been it's we're excited reach that that in something

growing step-up big guidance, seems you're And depreciation of just company guide, great. Alex, I that It implies that noticed laid that level growth to then, where level-set you in me infrastructure. you're that you it sort D&A 'XX right, the exceed a how into just making tech 'XX about follow-up. All in the Could and the 'XX? your thinking out. was thinking a that investment pretty and of unit about got into

Yes, thanks.

-- to in couple tech and First, tech really about million of $XX years this infrastructure. wraparound opened about restaurants ago, impact million of that. strategic new we the investment components the the talked the balance to investment so And within related some a components take of is our $XX related in-source of a effect past other that to then just that we to X/X that is the year,

for our a take more and we're control in that that, up strategy. and on progress D&A. you're to show to we've heading -- about our of see the our to bit more we're working starting so But made system excited component our where a of that's key And date

comes next question from RBC. Our from Chris Carril

outside and the saw you of U.K. the the thinking in about growth, you're the on unit results you U.S.? strong as speak for from growth strategy international learnings So some next the stages to could

more we on Absolutely. market and The there's where little business a we as a our obviously something delivery a off-premise, deployment textbook to referred kind in strategy, of where affluent consumer the consumer, a business. focus U.K. digitally-savvy is bit heavy of strong

will, target for we've to we used criteria and prioritize go taken you that, which that if growth. and really And so markets to

us that as just think in you to openings our fit well this strategy. South Korea, speak opening Toronto I And year they really so both how first markets earlier showing And up gate, the and in about of out the results that volumes which really like feel we've those U.K. the seeing in early make markets We're in seen in those success there's some on. we a strong in found the January it's Seoul, similar or us think of opportunity

the going U.S. a pacing LTOs Great. versus year how basis normalized thinking are maybe past historical of you of or I mean, I this on guess about business, forward the levels? And cadence for then kind flavor

historically, flavor target cadence the pattern, feel -- about did really it bit consideration we flavor the a guests. sure. in we than XXXX, news, It was with and like like variety. drives would there a year. they LTOs a Yes, well or X and We little more We -- that think if resonated purchase. We that ultimately

saw about could LTOs similar you the with so X very throughout And us at see in we -- to XXXX going what X flavor year. least

Dennis Geiger from comes question next Our from UBS.

speak the from to on consumer customers X another seeing bit you're consumer, but what out? across looking consumer that's more ask as to could seeing of to the sort your worth specific in you're the menu you little any want a at promotional income purchase quarter, behaviors, calling lower observations to if relates if there's that And quarter. it utilization the usage, whether I other

our we do Yes, consumer. hear else -- the everyone Wingstop, as see that lower-income own, headlines we it's a it consumer bit category research question. for guests. there indulgent positioning, all -- look at little look these our Dennis, where engaging show do has our are to that thanks it positioning the we an occasion really not of, consumers on a still it's seeing I for research unique tough at for the our We with how do obviously, one, consumer, and the But business, out we're in of and as particularly think we with We up. sees. lot And

like X think so out consumers on their a And occasions. demonstrated to business. XXXX occasions, themselves so it's they of find if if reward historically, what what feel heavy QSR are presenting we're these more retain in money top throughout to seen situation typically and value And they in ability we tendency, saw first occasions, a high-frequency back X I with and and a they saved to they week almost they've And they target themselves. times the going deserve month those have where mind, indulgent them the we've is to pull dining then we've

business we really while reads, of haven't everyone anything seen we everything our So show kind in else yet. read that up

Very helpful, Michael.

there. is, an X. maybe Just I so that's help levels still in strength X just where and other of believe want seeing kind on staffing your the fine chance traffic the staffing, given to traffic that's opportunity the quarter, last out to by if case. curious that's that demand meet I the staffing ask given growth. But were you're just

consistent we've it's a message front got in to about lot labor we I in job heart And good -- And a think taken that this And of a our wage. and with Yes. right did good brand I No, question. we the of focused we of this. a on front along partners, getting was really of paying think environment.

issues not I staffing quarter, a a saw commented -- seeing lot so perspective. really last as from think And we you of

the And to new issues. you think that our if speaks alone, obviously, really in to net I look part ability units And of opening without real restaurants XX quarter any at staff fourth profile that team Wingstop have run $X.X is us where X you a as the at labor as just can few AUV, members. helps we a with Wingstop at what unique do million

others. roster a bit in much require a to think that just I allows this efficient little a navigate smaller we so And profile us environment more differently than labor

question from BTIG. next from Peter Saleh The comes

in XXXX. about ask to the media national wanted I

the benefit you sales will XXX units. basis higher of points clearly transition have of plus that year this think and first the I be the more full

if can just and talk what, where opportunities be you 'XX media side, in you'll So you doing the 'XX? about in the are than differently national anything, on did

the think right great with our half that and in deploy moments And a us talked in it XXXX. this to able media social. show linear to the really allowed question. Peter, was digital, were the in to streaming the prepared about up message. right little places We wasn't right at on of paid we It alluded always-on remarks, to Yes. bit where we second approach that No. just to search TV. We

And excited that to strategy I being we're and think what about XXXX full for that. for deploy benefit the year so able is from

the XXXX go contributing a that obviously, that isolated consolidating what was beginning to fund. little business, when the QX the drive quarter, X% of national ad from the we to started, and us fund second that brand lap that more And bit a I the think I at ammo. -- and you'll strategy and effective XXXX into local true, not X% lean I guess, in awareness believe You guess, national the where into gives extra ad of really to is drive there. see But in us continue having

any all demand? just meet this then have on any or processes new are testing to substantially there other help or tests your over throughput Are pretty years. accelerated increase -- that you equipment guys volumes past And several increased the to

Yes.

also differently well system restaurants lot I the the little of think -- would now capacity. in same a And of a I around get doing we are million that asked kitchen. in question north $X that we've got

think there's from And don't throughput We're so it. we a far issue.

it We yet. haven't found

continue most for to we strengthen economics don't AUV see just a that so for us brand drive and growth to unit And importantly, constraint our the to as continue to partners.

Instructions]. [Operator

from Todd Benchmark comes question Brooks Our from Company. next The

getting food are with the at up right parts success maybe on how and like supply mix earlier with returns as given and as potentially structured boneless secondly, these sandwich, to good commentary: the the developments, economics assets do as the the solve you are as and in the feel of maybe or two time. the returns far need as are, XXs producers? for a chicken you're one, deeply needs XX% issues? the partners X strong now about how are; looking Wingstop looking doesn't to the following guess, of you at they place Michael, supply how over be in I mixing it's the the strategy brand chicken more were solution north guys Just chain you what owning now the aggressive go maybe where low the that talking and as if costs chain can in to far Or with year partnering be where of to

of vertically it's saw advance And take that But Todd, great to more us positioned, component in maybe control. we multifaceted opportunity just a that as an to leverage early an a strategy that Yes, in opportunistic a take just take was our question. what opportunity be allowed integrate we to X to a well rising we think we we're be back, saw working against. if and step XXXX rate saw to of And environment. up

that less I of is buy moving more around could costs predictability more think and and now food you earlier, I it strategy, mentioned we a restaurants. of efforts creating from call market and our don't right really I the energy our anything the capital-intensive But away guess, landed as part majority to And move are which on, is of the are from that strategy. and think we broader more say going away our the would spot for this

we're remain could we on feel is Longer be that to we impact could scale further it continue different deliver for take term, more returns focused a nothing agreements. the that and continue But going grow right there. step ultimately right to not structuring that But our but to come way through can the now, look these unit But ways doesn't those improve step a having still step that to immediate. from to we industry-leading a we economics. that be in just to mean and

that QX we delever high as of a growth model have we capital-intensive quickly, model the And even Alex mentioned earlier unique XXXX, And balance fundamental that really strategy a the Wingstop, cash change in lot asset-light not where overall supply the chain on cash. a very is X.X around sheet the which allows turns shells I mentioned, Alex is in a -- structure think deleverage. really as doesn't response off since of of of

that profile capital of shareholder the to our continue -- shareholders. model that for provide will of is deliver returns so strong And and opportunities one return

so And to that's not going change. fundamentally

just Very some walk you. maybe then through X dollar still it for Can a $XX of helpful. for spend compensation G&A guidance, for And I I incremental to know components you there's responsible $XX quick the in what's but the lift million there, the Alex, a looks year-over-year. million lift know stock G&A? like in

million. with Yes, Todd, you lapping mentioned compensation, from that were forfeitures the stock $X the -- we're some XXXX, about which

XXXX. what you in that, we actually below for if saw slightly rate growth is normalize So our

and to we're to support continue of in we've So over our mentioned the front going strategies we to have the invest years, as us. growth

from comes Truist question next from Our Bartlett Securities. Jake

Mine traffic. in And 'XX importance back the 'XX. of driving what had the of I in versus detail any think for started bundling the hoping you of strategy maybe on was terms launching 'XX, I'm you mix those on in bundles or in historically

how has just mix So the bundle shifted.

Yes, had thought for about, Deal, Meal indulgent we X%, great with around the consumer. us. we we're to a some for mix occasion, level when value question. lower-income the drive really that about on mix present that and in the excited record something and business we guests a success the Boneless was that Jake, And serve pretty at the was bundle X%, pressure saw XXXX way We that you thank talked about you which saw

desire you as think that as helps would or retain an the so than it's I the pressure us a indulgent when can that it's back. not about a feeling anything, impact example, something But is those to say more consumer to pull overall And material growth. occasions really

strong about Great. it's of increased weeks, or of the in of of I be pricing sandwich. And just that few pretty are system. wondering, the couple seeing? weeks franchisees I one, helpful. demand broadly the that last would I'm a had And across there a a the is reflection believe it's then more question comment chicken just Any

the the we it's for again Jake, enhance even system further had compelling And just Yes, unit our country And price took the economics -- and to we initially sandwich trial. we benchmarked brand an throughout as still and very throughout we value we and saw still opportunity chicken flow-through -- partners. think that the drive sandwich on it the competitively. priced we combo, a priced would at

that that really us we seen the pricing saw haven't so around to an And opportunity gives concern just improve economics. anything and

real Great. And quick. just

My terms stores to openings You going in X Where Manhattan? be XX of do in stand was was for there 'XX. mentioned that openings. you impression company

I think far, the is you What in that? X X have more coming. open us plan to on so remind just Manhattan,

in long-term to to I it's would committed out. still probably a bigger remain it But quite that similar Yes. that the think I to not other have I the there market city, recovering. build like see opportunity say mean, still presence we much brands back, feels we

close how lean and city. faring are for behaving are within to how watching But and kind right further it in to staying other now, we're the recovery as well sense expand close consumers within businesses and And continue when so of to makes the there. as traffic we're staying and the

session, question-and-answer conference and presentation. now our for today's the has concluded. attending Thank concludes you This

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