Dallas-based chicken wing brand Wingstop’s hot streak continues as the brand reported a 20.1% increase in same-store sales for the first quarter ended April 1, 2023, driven largely by transactions and traffic growth.
Company president and CEO Michael Skipworth said in Wednesday’s quarterly earnings call that double-digit growth across multiple channels is the result of focusing on strategic growth drivers that include improvements in brand awareness, menu innovation, expanding delivery channels, digital transformation, and data-driven marketing. Profitability is also being bolstered by increased supply chain stabilization, particularly lower chicken costs.
“2023 will mark our first full year deploying an always-on message, which will keep Wingstop top of mind with consumers throughout the entire year, a strategy we implemented in the back half of 2022 and one that we believe is working,” Skipworth said. “We are making great progress on closing our gap in awareness to other national brands, but there remains a significant opportunity ahead, as we look to, deliver our 20th consecutive year of same-store sales growth and sustain same-store sales growth over the long term.”
Wingstop is pulling multiple levers to continue its momentum and growth of brand awareness, starting with a renewed focus on advertising. The company recently partnered with a new ad agency “to propel Wingstop into its next phase of growth” with new advertising campaigns that focus on menu innovation, specifically hot categories like chicken sandwiches. The company launched 12 different chicken sandwiches in 2022, piggybacking off of the chicken sandwich trend that reached a pinnacle over the past few years.
“[The chicken sandwiches] have proven to be a powerful enabler for building awareness, increasing frequency and winning new occasions,” Skipworth said. “Chicken sandwiches give us an opportunity to deliver our Wingstop flavor in a category that has upwards of 2.8 billion servings annually.”
Besides menu and marketing innovation, he emphasized the expansion of the company’s digital channels, particularly in delivery. Digital sales now comprise 65% of total Wingstop sales, which has allowed the company to lean further into a digital transformation of its transactions and userbase. Skipworth said that the company is currently expanding a test of AI voice ordering capabilities: a technology that has recently become popular with brands across verticals as the labor environment continues to shift.
“The early results are promising as we see an improvement in the team member experience order time, guest satisfaction and an increase in ticket size with the ability to capture this guest digitally,” he said. “This also allows team members to focus on taking care of our guests that is picking up their order in the restaurant.”
As brand awareness grows, store footprint growth usually follows, and Skipworth noted that the 1,996-unit company has 1,200 stores in its pipeline, which would put Wingstop on track to nearly double its current portfolio size.
For the first quarter ended April 1, Wingstop’s net income increased 80.6% to $15.7 million, or 52 cents per share, up from $8.7 million, or 29 cents a share in the same period last year. Revenues increased 42.7% to $108.7 million, up from $76.2 million in the same quarter last year.
Wingstop added 37 net new stores in the first quarter, resulting in an increase in unit count of 11.4%.
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