On July 31, 2024, Wingstop Inc (WING, Financial) released its 8-K filing for the fiscal second quarter ended June 29, 2024. The company reported impressive financial results, surpassing analyst estimates for both earnings per share (EPS) and revenue.
Founded in 1994 in Garland, Texas, Wingstop is a restaurant operator specializing in indulgent bone-in and boneless chicken wings, chicken tenders, fries, and, recently, chicken sandwiches. The firm's footprint has grown quickly since its inception, reaching north of 2,200 global stores at the end of 2023, rendering Wingstop the 31st-largest restaurant brand in the U.S. by system sales, according to Euromonitor data. With a 98% franchised model, Wingstop generates the lion share of its revenue from franchise royalties and advertising fees, with the remainder derived from a small footprint of company-owned stores.
Performance Highlights
Wingstop Inc (WING, Financial) reported a 45.3% increase in total revenue, reaching $155.7 million, compared to $107.2 million in the same quarter last year. This figure significantly exceeded the analyst estimate of $144.01 million. The company's net income surged by 69.9% to $27.5 million, or $0.93 per diluted share, surpassing the estimated EPS of $0.81.
Key Financial Achievements
Wingstop's system-wide sales increased by 45.2% to $1.2 billion, driven by a 28.7% rise in domestic same-store sales. The company's digital sales also saw a significant boost, accounting for 68.3% of system-wide sales. The domestic average unit volume (AUV) increased to $2.0 million, reflecting the company's strong market position and effective growth strategies.
Income Statement Overview
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $155.7 million | $107.2 million |
| Net Income | $27.5 million | $16.2 million |
| EPS (Diluted) | $0.93 | $0.54 |
Balance Sheet and Cash Flow
As of June 29, 2024, Wingstop reported total assets of $451.8 million, up from $377.8 million at the end of 2023. The company's cash and cash equivalents stood at $96.7 million. Wingstop's long-term debt remained relatively stable at $713.3 million.
Operational Metrics
Wingstop opened 73 net new restaurants during the quarter, bringing the total number of system-wide restaurants to 2,352. The company's domestic franchise restaurants increased to 1,988, while international franchise restaurants grew to 312.
Commentary and Outlook
"The second quarter marked another industry-leading quarter for Wingstop, further solidifying our category-of-one position. With same store sales growth of 28.7%, driven primarily by transactions, our AUVs now exceed $2.0 million, a target we set only two years ago when AUVs just crossed $1.5 million. Due to the strength and staying power of our multi-year strategies, we believe we have line of sight to a new AUV target of $3.0 million," said Michael Skipworth, President and Chief Executive Officer.
Analysis
Wingstop Inc (WING, Financial) has demonstrated robust financial performance, significantly exceeding market expectations. The company's strong revenue growth, driven by increased same-store sales and digital sales, highlights its effective business strategies and market position. The substantial increase in net income and EPS further underscores Wingstop's operational efficiency and profitability.
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Explore the complete 8-K earnings release (here) from Wingstop Inc for further details.
