What a difference a chicken sandwich can make.
Wingstop on Wednesday reported industry-busting second quarter results, with domestic same-store sales growing nearly 29%, driven almost entirely by transactions.
The 28.7% increase comes on top of a same-store sales increase of 16.8% in the second quarter of 2023, resulting in two-year growth of more than 45%.
The Dallas-based chain also surpassed its average unit volume (AUV) goal of reaching $2 million (up from $1.5 million two years ago) and is now gunning to reach AUVs of $3 million. CEO Michael Skipworth also plans to triple the footprint of the 2,352-unit chain by setting a goal of reaching 6,000 units domestically, and 10,000 globally.
The results are extraordinary, given a macroeconomic backdrop that has brands like McDonald’s losing traffic and promoting heavy discounts.
Wingstop, meanwhile, upped its guidance for the year, saying it expects domestic same-store sales growth of about 20%, after previously projecting the low double digits.
“I don’t know there’s many other brands in this environment that are increasing their outlook for same-store sales, like we are, much less expecting the year to shape up in that approximately 20% range,” said Skipworth.
How is Wingstop is continuously pulling off such record-setting numbers?
Skipworth credits a solid strategy set in place when he came in as CEO two years ago and a steady hand at the rudder.
The strategies included raising brand awareness, menu innovation, expanding delivery channels, data-driven marketing and the ongoing transformation to an all-digital business—all of which are still in play, and Skipworth sees much runway ahead for more growth.
A key factor, however, has been the introduction of the chicken sandwich line two years ago, which has brought new customers to Wingstop. Those customers visit more often, dining at Wingstop monthly, on average, versus the traditional guest who comes once a quarter. And those sandwich customers tend to stick with the brand, moving onto other aspects of the menu.
Wingstop has yet to really promote its chicken tenders, for example, which are on the menu but are not as popular yet as the chicken sandwich. That’s one of many opportunities Skipworth sees ahead.
Overall, the shift to boneless chicken has helped stabilize food costs at Wingstop. That stability has allowed the brand to be disciplined on pricing, which Skipworth said is paying off in a climate where guests are increasingly looking for value and quality.
“We still haven’t come anywhere close to reaching our fair share of the $2.8 billion chicken sandwich servings annually in the U.S.,” he said.
Increasing brand awareness is also an opportunity, Skipworth said.
Systemwide sales during the second quarter increased more than 45% to $1.2 billion and that has increased the buying power of the brand’s advertising fund. Wingstop has had success with advertising tied to live and streaming sports, for example, as well as on video gaming platforms.
The chain rolled out the new MyWingstop tech platform, which has so far shown a 20% increase in average check among its members. Skipworth called it a "game changer."
Tapping a database of about 45 million users, Wingstop has invested about $60 million in creating more hyper-personalized marketing that Skipworth said is expected to further move the needle.
Digital sales increased to 68.3% of systemwide sales during the second quarter, moving Wingstop closer to its goal of being 100% digital. About 30% was from third-party delivery channels.
Net income increased nearly 70% to $27.5 million during the second quarter.
Not surprisingly, the results are also fueling more demand from franchise partners. Of the 300 or so units open over the last 12 months, 90% were existing franchisees.
For the year, the chain also expects to open between 285 and 300 net new units globally, up from 275 to 295 previously. During the second quarter, Wingstop saw the opening of 73 net new openings.
International is also “super-charged for growth,” Skipworth said, noting that AUVs at international units have grown more than 82% over the last two years. Wingstop recently launched a popup in Paris to preview planned growth in France, but he said restaurants in Mexico and Indonesia are seeing double-digit growth and the playbook is proven in the U.K., as well as Canada and Puerto Rico.
“It’s about finding the right partner and scaling this thing,” he said.
Wingstop celebrated its 30th anniversary earlier this month. The brand was born in Dallas and the original store is still going strong, with an AUV of roughly $4 million and still growing.
“Over the last 30 years, not a lot has changed with our brand,” said Skipworth. “We added boneless wings, tenders and the chicken sandwich. And we have remained focused on our simple operating model and delivering guests that indulgent Wingstop occasion that has centered around quality, cooked-to-order wings, tossed and sauces in our bold distinctive flavors.
“I can confidently say we are just getting started at Wingstop,” he added.
UPDATE: This article has been updated to correct the investment in personalized marketing.
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