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April 7, 2020, 8:00 a.m. EDT

Wingstop Inc. Provides Business Update and Releases Preliminary First Quarter 2020 Sales Results

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DALLAS, April 07, Apr 07, 2020 (GLOBE NEWSWIRE via COMTEX) -- Wingstop Inc. ("Wingstop" or the "Company") /zigman2/quotes/206814832/composite WING -0.65% today released preliminary unaudited sales and unit development results from the fiscal first quarter ahead of its first quarter earnings release, which is scheduled for May 6, 2020.

Open Letter from Charlie Morrison, Chairman and CEO of Wingstop:

As I reflect on these unprecedented times, I'd like to thank the thousands of team members working in Wingstop restaurants for their continued commitment to serving our guests and our franchisees, whom we affectionately call our brand partners, as we navigate this difficult situation.

Several weeks ago, Wingstop, anchored in our core values, began our journey of navigating the ever-changing COVID-19 crisis. Our core values of being authentic, service-minded, and entrepreneurial, or what we refer to as The Wingstop Way, have guided our response these past few weeks and will continue to guide our approach in the future.

Authentic - Not only does this speak to our high-quality, cooked-to-order products, but we strive to be transparent and genuine in our decision making. As information becomes available and is rapidly accessed, this is passed on to our stakeholders, including our team members, brand partners, and guests.

Service-Minded - The needs of our stakeholders are at the forefront. This translates to a sense of urgency as we aim to be proactive in assessing all stakeholder needs.

Entrepreneurial - While these are extraordinary times, we have acted swiftly to make decisions that we believe are the best for our brand and stakeholders.

The foundation of The Wingstop Way led us to focus on the following priorities in response to the various challenges created by COVID-19:

Support the well-being and safety of our team members, brand partners, and guests

The health and safety of our team members, brand partners and guests has, and always will be, our top priority. As COVID-19 began to escalate, we reemphasized our robust and frequent cleaning procedures to ensure both guest and team member safety. We moved quickly with our entrepreneurial spirit to establish a COVID-19 task force consisting of cross-functional leadership to facilitate a constant flow of information enabling swift, strategic decision making during this crisis. This included closing our dining rooms and modifying our operating procedures to ensure a clean and safe environment, as well as enacting various safety measures to ensure proper social distancing and the protection of our guests and our team members. We have sourced and will distribute thermometers and protective equipment for each restaurant in our system as additional precautionary measures.

In addition, within company-owned restaurants we implemented a restaurant team member compensation incentive extending through April 30, 2020 that could provide as much as an additional $150 to full-time team members each week for their hard work. We have encouraged our brand partners to execute a similar best practice, and they are responding positively. We will continue having open and transparent communication with our team members and brand partners as the situation develops.

Continuing to serve our Wingstop fans flavor in a safe and clean environment

As I mentioned above, on March 16, 2020, we made the decision to close our domestic dining rooms and offer carryout and delivery only. Off-premise dining has historically been one of our differentiators and the Wingstop team is humbled by the trust our guests have placed in us as we continue to serve during this challenging time. Our business was well-positioned for the transition to 100% off-premise dining that has resulted from COVID-19. Carry-out and delivery represented approximately 80% of our sales mix before COVID-19, and our digital sales mix was just over 40% leading into COVID-19. We initiated a promotion to offer free delivery via Wingstop.com and our Wingstop App to ease the burden of delivery fees for guests. The free delivery promotion has been extended until April 30, 2020. Guests have taken advantage of the delivery channel and, while we have seen a slight decline in overall transactions due to the loss of dine in, growth in our average ticket has surpassed these transaction declines as we're primarily serving meals for families. In fact, the first three weeks of period 3 (February 23, 2020 to March 14, 2020), domestic same-store sales growth was 8.5%, and since then (post COVID-19 escalation) we saw an acceleration in same-store sales growth. During the last two weeks of period 3 (March 15, 2020 to March 28, 2020), domestic same-store sales growth was 8.9%.

Preliminary Estimated First Quarter 2020 Sales (Unaudited)







                                                  Period 1, 2020    Period 2, 2020    Period 3, 2020    First Quarter
                                                  (Dec. 29, 2019 to (Jan. 26, 2020 to (Feb. 23, 2020 to 2020
                                                  Jan. 25, 2020)    Feb. 22, 2020)    Mar. 28, 2020)
        Domestic same-store sales                 +11.5    %        +10.0    %        +8.6     %        +9.9   %
        Company-owned restaurant same store sales +6.1     %        +5.2     %        +7.0     %        +6.2   %
        


Give back to our communities where we operate

We are humbled by the strength of our business model during this trying time and as a result, we are making it a priority to do our part to give back to the communities in which we serve. Wingstop Charities, whose mission is to serve youth in the pursuit of their passions, provided donations to food banks across the country resulting in approximately 80,000 meals to impacted youth. Front and center during the COVID-19 pandemic are the health care workers. We deployed our food trucks to local hospitals serving meals to those medical heroes on the front-line saving lives.

Our brand partners, who live our core values daily, are joining us by offering their own unique approaches to give back to their communities, whether through supporting first responders or supporting health care workers. We also recognize our brethren in the broader restaurant industry who have not been able to experience the type of performance we have seen. While our brand partners have been able to weather this storm and keep their Wingstop teams together because of the growth we have seen, others have not. That is why Wingstop is joining forces with the National Restaurant Association Educational Foundation and Guy Fieri in their call to support restaurant workers that have been impacted by COVID-19 and need our support. Wingstop will donate $1 million to the Restaurant Employee Relief Fund to provide access to grants that restaurant workers will desperately need in the coming weeks and months as our industry gets back on its feet post COVID-19.

Looking forward I would like to comment on a few other components of our business. Temporary closures in international operations have been necessary and, in some cases, mandated. Most of our international restaurants enjoy a robust dine-in business, generally driven by their locations, including malls and high-density gathering areas. Much like the domestic business, state and local governments are shutting down dining rooms in response to COVID-19, and our international brand partners are navigating this challenge in the best way they can. We are closely monitoring each country we operate in and providing support where needed to mitigate the impact our brand partners are seeing financially.

A bit of good fortune for our domestic business comes in the increased supply of chicken breast meat needed to support grocery stores where volumes have escalated, which has resulted in excess supply of jumbo chicken wings which is in turn creating a deflationary wing price. This provides an immediate cash benefit to our brand partners as we purchase wings off the spot market weekly.

While this has been a challenging time for many, we want to remind you that our company-owned locations and many of our brand partners are actively hiring in many locations, providing additional jobs to communities in need.

When we issue our first quarter earnings results, we will provide an update on our 2020 guidance. While these are times of uncertainty surrounding the global pandemic, we remain confident in our 3-5 year outlook of mid-single digit domestic same-store sales and 10%+ global net unit growth. However, we expect a near-term impact to our development pipeline as a result of availability of construction, permitting, and inspections resources in this current environment. Despite these uncertain times, this will not deter us from our long-term strategy of becoming a Top 10 global restaurant brand.

We are very fortunate and grateful to have the continued support from our team members, guests, brand partners and suppliers during this challenging time. As I reflect on this situation, I am proud of our exceptional team and our brand partners as we continue to serve the world flavor. I especially appreciate all our team members on the front lines in our restaurants ensuring a safe experience for our guests and giving back to the community.

We will continue to navigate the COVID-19 pandemic anchored in our core values with a focus on serving our stakeholders during this challenging time.

With all my best wishes.

Business Update

Highlights for the fiscal first quarter 2020 as compared to the fiscal first quarter 2019:

-- 28 net openings resulting in 1,413 global restaurants

-- Domestic same store sales increased 9.9%

/zigman2/quotes/206814832/composite
US : U.S.: Nasdaq
$ 132.73
-0.87 -0.65%
Volume: 6.54M
Sept. 18, 2020 4:00p
P/E Ratio
138.13
Dividend Yield
0.42%
Market Cap
$3.93 billion
Rev. per Employee
$231,741
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