• Domestic Same-Store Sales Growth: 19.9% for fiscal 2024.
• System-Wide Sales: Increased by 36.8% to $4.8 billion for fiscal 2024.
• Adjusted EBITDA: Increased by 44.8% to $212 million for fiscal 2024.
• Net New Restaurants Opened: 349 in fiscal 2024, with a 15.8% unit growth.
• Fourth Quarter Same-Store Sales Growth: 10.1%.
• Digital Sales Mix: Increased to 70% in the fourth quarter.
• Fourth Quarter Adjusted EBITDA: Increased by 44% to $56.3 million.
• Company-Owned Restaurant Sales: Increased by $3.8 million in Q4.
• SG&A Expenses: Increased by $3.2 million to $31.2 million in Q4.
• Earnings Per Diluted Share: $0.92 for the fourth quarter, a 44% increase.
• Share Repurchase Program: Additional $500 million authorized, with $311.1 million remaining available.
• Quarterly Dividend: $0.27 per share, totaling approximately $7.7 million.
• 2025 Global Unit Growth Rate Outlook: 14% to 15%.
• 2025 SG&A Guidance: Estimated at approximately $140 million.
• 2025 Adjusted EBITDA Growth Rate: Approximately 15%.

• Warning! GuruFocus has detected 2 Warning Sign with WING.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Wingstop Inc (NASDAQ:WING) achieved record top- and bottom-line results in 2024, marking 21 consecutive years of same-store sales growth.
• Domestic same-store sales grew by 19.9% in 2024, driven primarily by transactions, with a two-year stacked comp of 38%.
• The company opened a record 349 net new restaurants in 2024, delivering a 15.8% unit growth.
• Digital sales mix increased to 70%, and the digital database surpassed 50 million customers, showing nearly 30% growth.
• Wingstop Inc (NASDAQ:WING) launched a proprietary AI-enabled kitchen operating platform to improve service speed and team member productivity.

Negative Points

• The company anticipates food and packaging costs to remain in the mid-30% range for 2025, reflecting ongoing cost pressures.
• SG&A expenses increased by $3.2 million in Q4 2024, driven by investments in headcount-related expenses.
• The company is facing a competitive QSR environment with heavy value promotions, which could impact transaction growth.
• There is an elevated consumer anxiety about the future, which could affect spending behavior and dining out frequency.
• The company is managing a significant increase in interest expense due to a recent securitization transaction, impacting EPS.

Q & A Highlights

Q: Can you comment on the comps outlook for 2025 and the long-term expectations? A: Michael Skipworth, President and CEO, explained that the low to mid-single-digit comps outlook for 2025 is part of a broader three- to five-year target of mid-single digits. This target is meant to guide long-term expectations, and while Wingstop has outperformed in recent years, the target serves as an average over time.

Q: How do you see the comp trajectory for 2025, particularly for Q1? A: Michael Skipworth noted that while the restaurant industry has seen declining traffic, Wingstop has gained market share. The company expects the comp trajectory to be influenced by the laps of previous high transaction growth. Alex Kaleida, CFO, added that Q1 might see some noise due to unseasonal weather and fires in California, but overall, the pacing will follow the laps.

Q: How do you measure your value scores, and how do you communicate value to consumers? A: Michael Skipworth emphasized that value is more than just a price point; it's about value for money paired with quality. Wingstop has seen improvements in brand health metrics, exiting 2024 at record highs. The company focuses on delivering quality and value rather than competing with low-price value meals.

Q: Is there any impact of accelerating unit growth on same-store sales? A: Michael Skipworth stated that there is no significant impact from unit growth on same-store sales. The domestic business has a lot of white space for expansion, and new restaurants are showing strong productivity, which excites both the company and its brand partners.

Q: Can you share insights on the new kitchen operating system and its deployment? A: Michael Skipworth described the new AI-enabled kitchen operating platform as a game-changer for Wingstop. It is designed to enhance kitchen operations, improve team member productivity, and manage guest expectations. The system is expected to be rolled out within the next 12 months and is anticipated to unlock unmet demand and increase frequency.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.