Delivery & Digital Drive Wingstop’s Growth

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Digital sales make up 30% of chain’s overall domestic sales.

Delivery & Digital Drive Wingstop’s Growth

By Dorothy Creamer - 10/31/2019

Wingstop is looking to fly into global markets, but it’s not clipping its wings when it comes to domestic strategy. The company reported its third quarter financial results on October 30 and the outlook is positive for the growing brand as system-wide sales increased roughly 22% to $383.5 million. During the company’s third quarter earnings call, Chairman & CEO, Charlie Morrison credits the uptick in part to the company’s rollout of delivery and a focus on growing digital sales. He credits the positive results in these areas as a demonstration of the progress the brand is making towards its vision of becoming a top 10 global restaurant brand.

Roughly 35% of Wingstop’s sales are generated through its digital channels which includes: Wingstop.com, the Wingstop app, and Wingbot, Wingstop’s social ordering platform available on Facebook Messenger, Twitter, SMS text and Amazon Alexa.

 “We are pleased with our results in the quarter as we continue to demonstrate strong momentum in the business in 2019, which reflects the continued execution against our key strategic pillars of driving long-term same store sales growth, maintaining best in class unit economics and expansion of our global footprint,” Morrison says.

Morrison told investors that the company has already reached its 2019 goal of offering delivery at 80% of domestic restaurants. This contributed to same store sales growth of slightly more than 12% and the opening of 37 net new restaurants in the third quarter.

The increase in third-party delivery fees due to the nationwide delivery launch at company-owned stores was a contributing factor in increased cost of sales. Cost of sales went from $8 million to $10.3 million in the fiscal third quarter of the prior year. This increase was offset by the rise in company-owned same store sales of 11.9%, which was primarily driven by an increase in transactions.

As of September 28, 2019, there were 1,340 Wingstop restaurants system-wide. This included 1,199 restaurants in the United States, of which 1,169 were franchised restaurants and 30 were company-owned, and 141 franchised restaurants in international markets. During the fiscal third quarter 2019, there were 37 net system-wide Wingstop restaurant openings.

In 2018, Wingstop’s system-wide sales increased 16% year-over-year to $1.3 billion, marking the 15th consecutive year of same store sales growth as well as 290% shareholder return since its 2015 initial public offering.