Wingstop Restaurants Inc. Investor Relations

Quarterly Results

Wingstop Inc. Reports Fiscal Second Quarter 2024 Financial Results

Delivers 15.0% Unit Growth

Domestic Same Store Sales Increased 28.7%, Driven by Transaction Growth

DALLAS, July 31, 2024 — Wingstop Inc. (NASDAQ: WING) today announced financial results for the fiscal second quarter ended June 29, 2024.

Highlights for the fiscal second quarter 2024 compared to the fiscal second quarter 2023:

  • System-wide sales increased 45.2% to $1.2 billion
  • 73 net new openings in the fiscal second quarter 2024
  • Domestic restaurant AUV increased to $2.0 million
  • Domestic same store sales increased 28.7%
  • Digital sales increased to 68.3% of system-wide sales
  • Total revenue increased 45.3% to $155.7 million
  • Net income increased 69.9% to $27.5 million, or $0.93 per diluted share
  • Adjusted EBITDA, a non-GAAP measure, increased 50.7% to $51.8 million

Adjusted EBITDA is a non-GAAP measure. A reconciliation of adjusted EBITDA to the most directly comparable financial measure presented in accordance with accounting principles generally accepted in the United States (“GAAP”) is set forth in the schedule accompanying this release. See “Non-GAAP Financial Measures.”

“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. “This growth in AUVs has further enhanced our best-in-class unit economics, and as we continue to open new restaurants at a record pace, we believe there is an opportunity to more than triple our current U.S. footprint.”

Key operating metrics for the fiscal second quarter 2024 compared to the fiscal second quarter 2023:

Thirteen Weeks Ended

June 29, 2024

July 1, 2023

Number of system-wide restaurants open at end of period

2,352

2,046

Number of domestic franchise restaurants open at end of period

1,988

1,749

Number of international franchise restaurants open at end of period (1)

312

252

System-wide sales (in millions)

$ 1,176

$ 810

Domestic AUV (in thousands)

$ 2,032

$ 1,704

Domestic same store sales growth

28.7 %

16.8 %

Company-owned domestic same store sales growth

14.1 %

5.7 %

Net income (in thousands)

$ 27,485

$ 16,181

Adjusted EBITDA (in thousands)

$ 51,778

$ 34,350

______________________________

(1) Including U.S. territories.

Fiscal second quarter 2024 financial results

Total revenue for the fiscal second quarter 2024 increased to $155.7 million from $107.2 million in the fiscal second quarter last year. Royalty revenue, franchise fees and other increased $23.2 million, of which $12.1 million was due to domestic same store sales growth of 28.7%, and $8.1 million was due to net new franchise development. Advertising fees increased $18.1 million due to a 45.2% increase in system-wide sales in the fiscal second quarter 2024, as well as an increase in the national advertising fund contribution rate to 5.3% from 5.0%, effective the first day of the fiscal second quarter 2024. Company-owned restaurant sales increased $7.3 million due to the addition of seven net new company-owned restaurants since the prior fiscal second quarter and 14.1% company-owned domestic same store sales growth, driven primarily by an increase in transactions.

Cost of sales was $22.7 million compared to $16.6 million in the fiscal second quarter of the prior year. As a percentage of company-owned restaurant sales, cost of sales increased to 75.9% from 73.7% in the prior year comparable period. The increase as a percentage of company-owned restaurant sales was driven by food, beverage and packaging costs primarily resulting from an increase in the cost of bone-in chicken wings as compared to the prior fiscal second quarter. Our purchases in the prior fiscal second quarter were tied primarily to the spot market, which benefited from significant deflation in the cost of bone-in chicken wings. The increase in food, beverage and packaging costs was partially offset by a decrease in labor costs and other restaurant operating expenses as a percentage of company-owned restaurant sales primarily due to leverage related to the company-owned domestic same store sales increase of 14.1%.

Selling, general & administrative (“SG&A”) expense increased $6.0 million to $28.1 million from $22.1 million in the fiscal second quarter of the prior year. The increase in SG&A expense was driven by an increase in headcount-related expenses of $1.9 million to support the growth in our business, an increase in incentive compensation and performance-based stock compensation expense of $1.9 million primarily related to our performance, and an increase in consulting and other professional fees of $1.0 million associated with our strategic initiatives.

Depreciation and amortization increased $1.9 million to $5.2 million from $3.2 million in the fiscal second quarter of the prior year. The increase in depreciation and amortization was primarily due to depreciation expense for the software assets placed in service related to our MyWingstop technology platform during the fiscal second quarter 2024.

Financial Outlook

Based on year-to-date results, the Company is providing updated guidance for 2024:

  • Approximately 20% domestic same store sales growth, previously low double digits;
  • 285 to 300 global net new units, previously 275 to 295; and
  • SG&A expense of between $114$116 million, previously $111 million.

Additionally, the Company is reiterating guidance for 2024:

  • Depreciation and amortization of between $18$19 million; and
  • Stock-based compensation expense of approximately $20 million.

Restaurant Development

As of June 29, 2024, there were 2,352 Wingstop restaurants system-wide. This included 2,040 restaurants in the United States, of which 1,988 were franchised restaurants and 52 were company-owned, and 312 franchised restaurants were in international markets and U.S. territories. During the fiscal second quarter 2024, there were 73 net system-wide Wingstop restaurant openings.

Quarterly Dividend

In recognition of the Company’s strong cash flow generation and our commitment to returning value to stockholders, on July 30, 2024, our Board of Directors approved an increase in the quarterly dividend payable to Wingstop stockholders from $0.22 to $0.27 per share of common stock, resulting in a total dividend of approximately $7.9 million. This dividend will be paid on September 6, 2024 to stockholders of record as of August 16, 2024.

Share Repurchases

During the fiscal second quarter of 2024, the Company repurchased and retired 75,862 shares of its common stock at an average price of $381.29 per share. As of June 29, 2024, $96.1 million remained available under the share repurchase program previously approved by the Company’s Board of Directors.

The Company has repurchased and retired 721,814 shares of its common stock at an average price of $217.32 per share since inception of its share repurchase program in August 2023.

The following definitions apply to these terms as used in this release:

Domestic average unit volume (“AUV”) consists of the average annual sales of all restaurants that have been open for a trailing 52-week period or longer. This measure is calculated by dividing sales during the applicable period for all restaurants being measured by the number of restaurants being measured. Domestic AUV includes revenue from both company-owned and franchised restaurants. Domestic AUV allows management to assess our domestic company-owned and franchised restaurant economics. Changes in domestic AUV are primarily driven by increases in same store sales and are also influenced by opening new restaurants.

Domestic same store sales reflects the change in year-over-year sales for the same store restaurant base. We define the same store restaurant base to include those restaurants open for at least 52 full weeks. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and permanent closures. We review same store sales for domestic company-owned restaurants as well as system-wide domestic restaurants. Domestic same store sales growth is driven by increases in transactions and average transaction size. Transaction size increases are driven by price increases or favorable mix shift from either an increase in items purchased or shifts into higher priced items.

System-wide sales represents net sales for all of our company-owned and franchised restaurants, as reported by franchisees. This measure allows management to better assess changes in our royalty revenue, our overall store performance, the health of our brand and the strength of our market position relative to competitors. Our system-wide sales growth is driven by new restaurant openings as well as increases in same store sales.

Adjusted EBITDA is defined as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization (EBITDA), further adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and stock-based compensation expense.

We caution investors that amounts presented in accordance with our definitions above may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate certain non-GAAP measurements in the same manner.

Conference Call and Webcast

The Company will host a conference call today to discuss the fiscal second quarter 2024 financial results at 10:00 AM Eastern Time. The conference call can be joined telephonically by dialing 1-877-259-5243 or 1-412-317-5176 (international) and asking for the Wingstop conference call. A replay will be available two hours after the call and can be accessed by dialing 1-877-344-7529 or 1-412-317-0088 (international), then entering the replay code 7955331. The replay will be available through Wednesday, August 7, 2024.

The conference call will also be webcast live and later archived on the investor relations section of Wingstop’s corporate website at ir.wingstop.com under the ‘News & Events’ section.

About Wingstop

Founded in 1994 and headquartered in Dallas, TX, Wingstop Inc. (NASDAQ: WING) operates and franchises more than 2,350 locations worldwide. The Wing Experts are dedicated to Serving the World Flavor through an unparalleled guest experience and a best-in-class technology platform, all while offering classic and boneless wings, tenders, and chicken sandwiches, cooked to order and hand sauced-and-tossed in fans’ choice of 12 bold, distinctive flavors. Wingstop’s menu also features signature sides including fresh-cut, seasoned fries and freshly-made ranch and bleu cheese dips.

In fiscal year 2023, Wingstop’s system-wide sales increased 27.1% to approximately $3.5 billion, marking the 20th consecutive year of same store sales growth. With a vision of becoming a Top 10 Global Restaurant Brand, Wingstop’s system is comprised of corporate-owned restaurants and independent franchisees, or brand partners, who account for approximately 98% of Wingstop’s total restaurant count of 2,352 as of June 29, 2024.

A key to this business success and consumer fandom stems from The Wingstop Way, which includes a core value system of being Authentic, Entrepreneurial, Service-minded, and Fun. The Wingstop Way extends to the brand’s environmental, social and governance platform as Wingstop seeks to provide value to all guests.

In 2023, Wingstop earned its “Best Places to Work” certification. The Company landed on Entrepreneur Magazine’s “Fastest-Growing Franchises” list and ranked #16 on “Franchise 500.” Wingstop was listed on Technomic’s “Top 500 Chain Restaurant Report,” QSR Magazine’s “2023 QSR 50” and Franchise Time’s “40 Smartest-Growing Franchises.”

For more information, visit www.wingstop.com or www.wingstop.com/own-a-wingstop and follow @Wingstop on X, Instagram, Facebook, and TikTok. Learn more about Wingstop’s involvement in its local communities at www.wingstopcharities.org. Unless specifically noted otherwise, references to our website addresses, the website addresses of third parties or other references to online content in this press release do not constitute incorporation by reference of the information contained on such website and should not be considered part of this release.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP financial measures, including those indicated above. By providing non-GAAP financial measures, together with a reconciliation to the most comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. These measures are not intended to be considered in isolation or as substitutes for, or superior to, financial measures prepared and presented in accordance with GAAP. The non-GAAP measures used in this press release may be different from the measures used by other companies. A reconciliation of each measure to the most directly comparable GAAP measure is available in this news release. In addition, the Current Report on Form 8-K furnished to the Securities and Exchange Commission (the “SEC”) concurrent with the issuance of this press release includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.

Forward-looking Statements

This news release includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to the discussion of our business strategies and our expectations concerning future operations, margins, profitability, trends, liquidity and capital resources and to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “may,” “will,” “should,” “expect,” “intend,” “plan,” “outlook,” “guidance,” “anticipate,” “believe,” “think,” “estimate,” “seek,” “predict,” “can,” “could,” “project,” “potential” or, in each case, their negative or other variations or comparable terminology, although not all forward-looking statements are accompanied by such terms. Examples of forward-looking statements in this news release include, but are not limited to, our 2024 fiscal year outlook for domestic same store sales growth, global net new units, SG&A expense, stock-based compensation expense, and depreciation and amortization, as well as references to domestic AUV targets and our potential domestic restaurant footprint. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties, risks, and factors relating to our operations and business environments, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by these forward-looking statements. Please refer to the risk factors discussed in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which can be found at the SEC’s website www.sec.gov. The discussion of these risks is specifically incorporated by reference into this news release.

When considering forward-looking statements in this news release or that we make in other reports or statements, you should keep in mind the cautionary statements in this news release and future reports we file with the SEC. New risks and uncertainties arise from time to time, and we cannot predict when they may arise or how they may affect us. Any forward-looking statement in this news release speaks only as of the date on which it was made. Except as required by law, we assume no obligation to update or revise any forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Media Contact
Maddie Lupori
[email protected]

Investor Contact
Kristen Thomas
[email protected]

WINGSTOP INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(amounts in thousands, except share and per share data)

June 29,
2024

December 30,
2023

(Unaudited)

Assets

Current assets

Cash and cash equivalents

$ 96,749

$ 90,216

Restricted cash

11,444

11,444

Accounts receivable, net

16,059

12,408

Prepaid expenses and other current assets

6,768

4,948

Advertising fund assets, restricted

31,768

25,328

Total current assets

162,788

144,344

Property and equipment, net

107,738

91,292

Operating lease assets

55,379

19,092

Goodwill

68,733

67,708

Trademarks

32,700

32,700

Customer relationships, net

7,108

7,740

Other non-current assets

17,375

14,949

Total assets

$ 451,821

$ 377,825

Liabilities and stockholders’ deficit

Current liabilities

Accounts payable

$ 5,752

$ 4,725

Current portion of operating lease liabilities

4,061

2,380

Other current liabilities

42,955

38,571

Advertising fund liabilities

31,768

25,328

Total current liabilities

84,536

71,004

Long-term debt, net

713,258

712,327

Operating lease liabilities

53,943

17,807

Deferred revenues, net of current

32,928

30,145

Deferred income tax liabilities, net

4,626

3,721

Other non-current liabilities

71

187

Total liabilities

889,362

835,191

Commitments and contingencies

Stockholders’ deficit

Common stock, $0.01 par value; 100,000,000 shares authorized;

29,304,401 and 29,337,920 shares issued and outstanding as of

June 29, 2024 and December 30, 2023, respectively

293

293

Additional paid-in-capital

1,869

2,676

Retained deficit

(439,326)

(459,994)

Accumulated other comprehensive loss

(377)

(341)

Total stockholders’ deficit

(437,541)

(457,366)

Total liabilities and stockholders’ deficit

$ 451,821

$ 377,825

WINGSTOP INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(amounts in thousands, except per share data)

Thirteen Weeks Ended

June 29,
2024

July 1,
2023

(Unaudited)

(Unaudited)

Revenue:

Royalty revenue, franchise fees and other

$ 71,160

$ 47,984

Advertising fees

54,654

36,596

Company-owned restaurant sales

29,885

22,593

Total revenue

155,699

107,173

Costs and expenses:

Cost of sales (1)

22,673

16,642

Advertising expenses

58,548

38,729

Selling, general and administrative

28,097

22,128

Depreciation and amortization

5,161

3,218

Total costs and expenses

114,479

80,717

Operating income

41,220

26,456

Interest expense, net

5,200

4,244

Other (income) expense

(471)

(46)

Income before income tax expense

36,491

22,258

Income tax expense

9,006

6,077

Net income

$ 27,485

$ 16,181

Earnings per share

Basic

$ 0.94

$ 0.54

Diluted

$ 0.93

$ 0.54

Weighted average shares outstanding

Basic

29,343

29,972

Diluted

29,457

30,049

Dividends per share

$ 0.22

$ 0.19

__________________________________

(1)

Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, but excludes depreciation and amortization, which are presented separately.

WINGSTOP INC. AND SUBSIDIARIES

Unaudited Supplemental Information

Cost of Sales Margin Analysis

(amounts in thousands)

Thirteen Weeks Ended

June 29, 2024

July 1, 2023

In dollars

As a % of
company-owned
restaurant sales

In dollars

As a % of
company-owned
restaurant sales

Cost of sales:

Food, beverage and packaging costs

$ 10,695

35.8 %

$ 7,264

32.2 %

Labor costs

6,987

23.4 %

5,520

24.4 %

Other restaurant operating expenses

5,757

19.3 %

4,408

19.5 %

Vendor rebates

(766)

(2.6) %

(550)

(2.4) %

Total cost of sales

$ 22,673

75.9 %

$ 16,642

73.7 %

WINGSTOP INC. AND SUBSIDIARIES

Unaudited Supplemental Information

Restaurant Count

Thirteen Weeks Ended

June 29,
2024

July 1,
2023

Domestic Franchised Activity

Beginning of period

1,924

1,710

Openings

65

42

Closures

(1)

Acquired by Company

(1)

(2)

Restaurants end of period

1,988

1,749

Domestic Company-Owned Activity

Beginning of period

50

43

Openings

1

Closures

Acquired by Company

1

2

Restaurants end of period

52

45

Total Domestic Restaurants

2,040

1,794

International Franchised Activity(1)

Beginning of period

305

243

Openings

10

9

Closures

(3)

Restaurants end of period

312

252

Total System-wide Restaurants

2,352

2,046

______________________________

(1)

Includes U.S. Territories.

WINGSTOP INC. AND SUBSIDIARIES

Non-GAAP Financial Measures – EBITDA and Adjusted EBITDA

(Unaudited)

(amounts in thousands)

Thirteen Weeks Ended

June 29,
2024

July 1,
2023

Net income

$ 27,485

$ 16,181

Interest expense, net

5,200

4,244

Income tax expense

9,006

6,077

Depreciation and amortization

5,161

3,218

EBITDA

$ 46,852

$ 29,720

Additional adjustments:

Consulting fees (a)

1,084

Stock-based compensation expense (b)

4,926

3,546

Adjusted EBITDA

$ 51,778

$ 34,350

_______________________________

(a)

Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete, project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements of Operations. The costs incurred in the thirteen weeks ended July 1, 2023 include consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, which review was completed in fiscal year 2023. Given the magnitude and scope of this strategic review initiative that is not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiative not reflective of the ongoing costs to operate its business.

(b)

Includes non-cash, stock-based compensation, net of forfeitures.

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SOURCE Wingstop Restaurants Inc.

Wingstop Inc. Reports Fiscal First Quarter 2024 Financial Results

Domestic Restaurant AUV Exceeds $1.9 Million Driven by 21.6% Domestic Same Store Sales Growth

Delivers 14.2% Unit Growth

DALLAS, May 1, 2024 — Wingstop Inc. (NASDAQ: WING) today announced financial results for the fiscal first quarter ended March 30, 2024.

Highlights for the fiscal first quarter 2024 compared to the fiscal first quarter 2023:

  • System-wide sales increased 36.8% to $1.1 billion
  • 65 net new openings in the fiscal first quarter 2024
  • Domestic same store sales increased 21.6%
  • Domestic restaurant AUV increased to $1.9 million
  • Digital sales increased to 68.3% of system-wide sales
  • Total revenue increased 34.1% to $145.8 million
  • Net income increased 83.5% to $28.7 million, or $0.98 per diluted share
  • Adjusted net income and adjusted earnings per diluted share, both non-GAAP measures, increased 61.8% to $28.7 million, or $0.98 per diluted share
  • Adjusted EBITDA, a non-GAAP measure, increased 45.3% to $50.3 million

Adjusted EBITDA, adjusted net income, and adjusted earnings per diluted share are non-GAAP measures. Reconciliations of adjusted EBITDA, adjusted net income, and adjusted earnings per diluted share to the most directly comparable financial measure presented in accordance with accounting principles generally accepted in the United States (“GAAP”) are set forth in the schedule accompanying this release. See “Non-GAAP Financial Measures.”

“Our fiscal first quarter 2024 showcased the momentum behind the Wingstop brand and the continued strength of our strategies, delivering 21.6% domestic same-store sales growth driven almost entirely by transaction growth,” said Michael Skipworth, President & Chief Executive Officer. “Our domestic AUV exceeded $1.9 million, further strengthening best-in-class returns for our brand partners and is strengthening our development pipeline, which gives us confidence in our ability to scale Wingstop into a Top 10 Global Restaurant Brand.”

Key operating metrics for the fiscal first quarter 2024 compared to the fiscal first quarter 2023:

Thirteen Weeks Ended

March 30, 2024

April 1, 2023

Number of system-wide restaurants open at end of period

2,279

1,996

Number of domestic franchise restaurants open at end of period

1,924

1,710

Number of international franchise restaurants open at end of period (1)

305

243

System-wide sales (in millions)

$ 1,124

$ 822

Domestic AUV (in thousands)

$ 1,918

$ 1,662

Domestic same store sales growth

21.6 %

20.1 %

Company-owned domestic same store sales growth

6.2 %

10.3 %

Net income (in thousands)

$ 28,747

$ 15,669

Adjusted net income (in thousands)

$ 28,747

$ 17,771

Adjusted EBITDA (in thousands)

$ 50,263

$ 34,584

(1) Including U.S. territories.

Fiscal first quarter 2024 financial results

Total revenue for the fiscal first quarter 2024 increased to $145.8 million from $108.7 million in the fiscal first quarter last year. Royalty revenue, franchise fees and other increased $18.9 million, of which $9.4 million was due to domestic same store sales growth of 21.6%, and $7.2 million was due to net new franchise development. Advertising fees increased $12.7 million due to a 36.8% increase in system-wide sales in the fiscal first quarter 2024. Company-owned restaurant sales increased $5.5 million due to the addition of seven net new company-owned restaurants since the prior fiscal first quarter and 6.2% company-owned domestic same store sales growth driven primarily by an increase in transactions.

Cost of sales was $21.3 million compared to $16.7 million in the fiscal first quarter of the prior year. As a percentage of company-owned restaurant sales, cost of sales increased to 74.5% from 72.4% in the prior year comparable period. The increase as a percentage of company-owned restaurant sales was driven by food, beverage and packaging costs primarily resulting from an increase in the cost of bone-in chicken wings as compared to the prior fiscal first quarter. Our purchases in the prior fiscal first quarter were tied primarily to the spot market, which benefited from significant deflation in the cost of bone-in chicken wings.

Selling, general & administrative (“SG&A”) expense increased $1.5 million to $25.2 million from $23.6 million in the fiscal first quarter of the prior year. The increase in SG&A expense was driven by an increase in headcount-related expenses of $2.1 million to support the growth in our business, professional fees of $1.4 million associated with the Company’s strategic initiatives, and an increase in performance-based stock compensation expense of $0.5 million primarily related to the Company’s prior year performance. These increases were partially offset by $2.8 million in non-recurring consulting fees incurred in the prior fiscal first quarter.

Financial Outlook

Based on year-to-date results, the Company is providing updated guidance for 2024:

  • Low double digit domestic same store sales growth;
  • 275 to 295 global net new units;
  • SG&A expense of approximately $111 million; and
  • Stock-based compensation expense of approximately $20 million.

Additionally, the Company is reiterating guidance for depreciation and amortization of between $18$19 million for 2024.

Restaurant Development

As of March 30, 2024, there were 2,279 Wingstop restaurants system-wide. This included 1,974 restaurants in the United States, of which 1,924 were franchised restaurants and 50 were company-owned, and 305 franchised restaurants were in international markets and U.S. territories. During the fiscal first quarter 2024, there were 65 net system-wide Wingstop restaurant openings.

Quarterly Dividend

In recognition of the Company’s strong cash flow generation and our commitment to returning value to stockholders, on April 30, 2024, our board of directors approved a quarterly dividend payable to Wingstop stockholders of $0.22 per share of common stock, resulting in a total dividend of approximately $6.5 million. This dividend will be paid on June 7, 2024 to stockholders of record as of May 17, 2024.

The following definitions apply to these terms as used in this release:

Domestic average unit volume (“AUV”) consists of the average annual sales of all restaurants that have been open for a trailing 52-week period or longer. This measure is calculated by dividing sales during the applicable period for all restaurants being measured by the number of restaurants being measured. Domestic AUV includes revenue from both company-owned and franchised restaurants. Domestic AUV allows management to assess our domestic company-owned and franchised restaurant economics. Changes in domestic AUV are primarily driven by increases in same store sales and are also influenced by opening new restaurants.

Domestic same store sales reflects the change in year-over-year sales for the same store restaurant base. We define the same store restaurant base to include those restaurants open for at least 52 full weeks. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and permanent closures. We review same store sales for domestic company-owned restaurants as well as system-wide domestic restaurants. Domestic same store sales growth is driven by increases in transactions and average transaction size. Transaction size increases are driven by price increases or favorable mix shift from either an increase in items purchased or shifts into higher priced items.

System-wide sales represents net sales for all of our company-owned and franchised restaurants, as reported by franchisees. This measure allows management to better assess changes in our royalty revenue, our overall store performance, the health of our brand and the strength of our market position relative to competitors. Our system-wide sales growth is driven by new restaurant openings as well as increases in same store sales.

Adjusted EBITDA is defined as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization (EBITDA), further adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and stock-based compensation expense.

Adjusted net income is defined as net income adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and related tax adjustments that management believes are not indicative of the Company’s core operating results or business outlook over the long-term.

Adjusted earnings per diluted share is defined as adjusted net income divided by weighted average diluted share count.

We caution investors that amounts presented in accordance with our definitions above may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate certain non-GAAP measurements in the same manner.

Conference Call and Webcast

The Company will host a conference call today to discuss the fiscal first quarter 2024 financial results at 10:00 AM Eastern Time. The conference call can be joined telephonically by dialing 1-877-259-5243 or 1-412-317-5176 (international) and asking for the Wingstop conference call. A replay will be available two hours after the call and can be accessed by dialing 1-877-344-7529 or 1-412-317-0088 (international), then entering the replay code 3920698. The replay will be available through Wednesday, May 8, 2024.

The conference call will also be webcast live and later archived on the investor relations section of Wingstop’s corporate website at ir.wingstop.com under the ‘News & Events’ section.

About Wingstop

Founded in 1994 and headquartered in Dallas, TX, Wingstop Inc. (NASDAQ: WING) operates and franchises more than 2,250 locations worldwide. The Wing Experts are dedicated to Serving the World Flavor through an unparalleled guest experience and a best-in-class technology platform, all while offering classic and boneless wings, tenders, and chicken sandwiches, cooked to order and hand sauced-and-tossed in fans’ choice of 11 bold, distinctive flavors. Wingstop’s menu also features signature sides including fresh-cut, seasoned fries and freshly-made ranch and bleu cheese dips.

In fiscal year 2023, Wingstop’s system-wide sales increased 27.1% to approximately $3.5 billion, marking the 20th consecutive year of same store sales growth. With a vision of becoming a Top 10 Global Restaurant Brand, Wingstop’s system is comprised of independent franchisees, or brand partners, who account for approximately 98% of Wingstop’s total restaurant count of 2,279 as of March 30, 2024.

A key to this business success and consumer fandom stems from The Wingstop Way, which includes a core value system of being Authentic, Entrepreneurial, Service-minded, and Fun. The Wingstop Way extends to the brand’s environmental, social and governance platform as Wingstop seeks to provide value to all guests.

In 2023, Wingstop earned its “Best Places to Work” certification. The Company landed on Entrepreneur Magazine’s “Fastest-Growing Franchises” list and ranked #16 on “Franchise 500.” Wingstop was listed on Technomic’s “Top 500 Chain Restaurant Report,” QSR Magazine’s “2023 QSR 50” and Franchise Time’s “40 Smartest-Growing Franchises.”

For more information visit www.wingstop.com or www.wingstop.com/own-a-wingstop and follow @Wingstop on Twitter, Instagram, Facebook, and TikTok. Learn more about Wingstop’s involvement in its local communities at www.wingstopcharities.org. Unless specifically noted otherwise, references to our website addresses or the website addresses of third parties in this press release do not constitute incorporation by reference of the information contained on such website and should not be considered part of this release.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP financial measures, including those indicated above. By providing non-GAAP financial measures, together with a reconciliation to the most comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. These measures are not intended to be considered in isolation or as substitutes for, or superior to, financial measures prepared and presented in accordance with GAAP. The non-GAAP measures used in this press release may be different from the measures used by other companies. A reconciliation of each measure to the most directly comparable GAAP measure is available in this news release. In addition, the Current Report on Form 8-K furnished to the Securities and Exchange Commission (the “SEC”) concurrent with the issuance of this press release includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.

Forward-looking Statements

This news release includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to the discussion of our business strategies and our expectations concerning future operations, margins, profitability, trends, liquidity and capital resources and to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “may,” “will,” “should,” “expect,” “intend,” “plan,” “outlook,” “guidance,” “anticipate,” “believe,” “think,” “estimate,” “seek,” “predict,” “can,” “could,” “project,” “potential” or, in each case, their negative or other variations or comparable terminology, although not all forward-looking statements are accompanied by such terms. Examples of forward-looking statements in this news release include, but are not limited to, our 2024 fiscal year outlook for domestic same store sales growth, global net new units, SG&A expense, stock-based compensation expense, and depreciation and amortization. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties, risks, and factors relating to our operations and business environments, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by these forward-looking statements. Please refer to the risk factors discussed in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which can be found at the SEC’s website www.sec.gov. The discussion of these risks is specifically incorporated by reference into this news release.

When considering forward-looking statements in this news release or that we make in other reports or statements, you should keep in mind the cautionary statements in this news release and future reports we file with the SEC. New risks and uncertainties arise from time to time, and we cannot predict when they may arise or how they may affect us. Any forward-looking statement in this news release speaks only as of the date on which it was made. Except as required by law, we assume no obligation to update or revise any forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Media Contact
Maddie Lupori
[email protected]

Investor Contact
Kristen Thomas
[email protected]

WINGSTOP INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(amounts in thousands, except share and per share data)

March 30,
2024

December 30,
2023

(Unaudited)

Assets

Current assets

Cash and cash equivalents

$ 108,305

$ 90,216

Restricted cash

11,444

11,444

Accounts receivable, net

13,643

12,408

Prepaid expenses and other current assets

3,774

4,948

Advertising fund assets, restricted

33,710

25,328

Total current assets

170,876

144,344

Property and equipment, net

99,345

91,292

Goodwill

67,708

67,708

Trademarks

32,700

32,700

Customer relationships, net

7,424

7,740

Other non-current assets

34,198

34,041

Total assets

$ 412,251

$ 377,825

Liabilities and stockholders’ deficit

Current liabilities

Accounts payable

$ 6,444

$ 4,725

Other current liabilities

38,675

40,951

Advertising fund liabilities

33,710

25,328

Total current liabilities

78,829

71,004

Long-term debt, net

712,790

712,327

Deferred revenues, net of current

31,543

30,145

Deferred income tax liabilities, net

5,634

3,721

Other non-current liabilities

17,834

17,994

Total liabilities

846,630

835,191

Commitments and contingencies

Stockholders’ deficit

Common stock, $0.01 par value; 100,000,000 shares authorized;
29,369,978 and 29,337,920 shares issued and outstanding as of March 30,
2024 and December 30, 2023, respectively

294

293

Additional paid-in-capital

918

2,676

Retained deficit

(435,226)

(459,994)

Accumulated other comprehensive loss

(365)

(341)

Total stockholders’ deficit

(434,379)

(457,366)

Total liabilities and stockholders’ deficit

$ 412,251

$ 377,825

WINGSTOP INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(amounts in thousands, except per share data)

Thirteen Weeks Ended

March 30,
2024

April 1,
2023

(Unaudited)

(Unaudited)

Revenue:

Royalty revenue, franchise fees and other

$ 67,097

$ 48,188

Advertising fees

50,149

37,463

Company-owned restaurant sales

28,543

23,070

Total revenue

145,789

108,721

Costs and expenses:

Cost of sales (1)

21,271

16,695

Advertising expenses

53,192

39,643

Selling, general and administrative

25,178

23,645

Depreciation and amortization

3,410

2,989

Loss on disposal of assets

77

Total costs and expenses

103,051

83,049

Operating income

42,738

25,672

Interest expense, net

4,544

4,573

Other (income) expense

(303)

188

Income before income tax expense

38,497

20,911

Income tax expense

9,750

5,242

Net income

$ 28,747

$ 15,669

Earnings per share

Basic

$ 0.98

$ 0.52

Diluted

$ 0.98

$ 0.52

Weighted average shares outstanding

Basic

29,349

29,947

Diluted

29,478

30,031

Dividends per share

$ 0.22

$ 0.19

(1) Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, but excludes
depreciation and amortization, which are presented separately.

WINGSTOP INC. AND SUBSIDIARIES

Unaudited Supplemental Information

Cost of Sales Margin Analysis

(amounts in thousands)

Thirteen Weeks Ended

March 30, 2024

April 1, 2023

In dollars

As a % of
company-owned
restaurant sales

In dollars

As a % of
company-owned
restaurant sales

Cost of sales:

Food, beverage and packaging costs

$ 9,903

34.7 %

$ 7,486

32.4 %

Labor costs

6,675

23.4 %

5,517

23.9 %

Other restaurant operating expenses

5,410

19.0 %

4,226

18.3 %

Vendor rebates

(717)

(2.5) %

(534)

(2.3) %

Total cost of sales

$ 21,271

74.5 %

$ 16,695

72.4 %

WINGSTOP INC. AND SUBSIDIARIES

Unaudited Supplemental Information

Restaurant Count

Thirteen Weeks Ended

March 30,
2024

April 1,
2023

Domestic Franchised Activity

Beginning of period

1,877

1,678

Openings

47

32

Closures

Restaurants end of period

1,924

1,710

Domestic Company-Owned Activity

Beginning of period

49

43

Openings

1

Closures

Restaurants end of period

50

43

Total Domestic Restaurants

1,974

1,753

International Franchised Activity(1)

Beginning of period

288

238

Openings

17

8

Closures

(3)

Restaurants end of period

305

243

Total System-wide Restaurants

2,279

1,996

(1) Includes U.S. Territories.

WINGSTOP INC. AND SUBSIDIARIES

Non-GAAP Financial Measures – EBITDA and Adjusted EBITDA

(Unaudited)

(amounts in thousands)

Thirteen Weeks Ended

March 30,
2024

April 1,
2023

Net income

$ 28,747

$ 15,669

Interest expense, net

4,544

4,573

Income tax expense

9,750

5,242

Depreciation and amortization

3,410

2,989

EBITDA

$ 46,451

$ 28,473

Additional adjustments:

Consulting fees (a)

2,766

Stock-based compensation expense (b)

3,812

3,345

Adjusted EBITDA

$ 50,263

$ 34,584

(a)

Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete, project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements of Operations. The costs incurred in the thirteen weeks ended April 1, 2023 include consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, which review was completed in fiscal year 2023. Given the magnitude and scope of this strategic review initiative that is not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiative not reflective of the ongoing costs to operate its business.

(b)

Includes non-cash, stock-based compensation, net of forfeitures.

WINGSTOP INC. AND SUBSIDIARIES

Non-GAAP Financial Measures – Adjusted Net Income and Adjusted EPS

(Unaudited)

(amounts in thousands, except per share data)

Thirteen Weeks Ended

March 30,
2024

April 1,
2023

Numerator:

Net income

$ 28,747

$ 15,669

Adjustments:

Consulting fees (a)

2,766

Tax effect of adjustments (b)

(664)

Adjusted net income

$ 28,747

$ 17,771

Denominator:

Weighted-average shares outstanding – diluted

29,478

30,031

Adjusted earnings per diluted share

$ 0.98

$ 0.59

(a)

Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete, project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements of Operations. The costs incurred in the thirteen weeks ended April 1, 2023 include consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, which review was completed in fiscal year 2023. Given the magnitude and scope of this strategic review initiative that is not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiative not reflective of the ongoing costs to operate its business.

(b)

Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an assumed effective tax rate of 24% for the thirteen weeks ended April 1, 2023, which includes provisions for U.S. federal income taxes, and assumes the respective statutory rates for applicable state and local jurisdictions.

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SOURCE Wingstop Restaurants Inc.

Wingstop Inc. Reports Fiscal Fourth Quarter and Full Year 2023 Financial Results

13.0% Increase in Unit Count in 2023

18.3% Domestic Same Store Sales Growth in 2023, Driven Primarily by an Increase in Transactions

DALLAS, Feb. 21, 2024 — Wingstop Inc. (NASDAQ: WING) today announced financial results for the fiscal fourth quarter and fiscal year ended December 30, 2023. The fiscal fourth quarter and fiscal year ended December 31, 2022 benefited from a 53rd week as compared to fiscal 2023. Unless otherwise noted, all amounts presented for the prior fiscal periods are on a 14-week or 53-week basis, respectively.

Highlights for the 13-week fiscal fourth quarter 2023 compared to the 14-week fiscal fourth quarter 2022:*

  • System-wide sales increased 24.5% to $965.9 million
  • 115 net new openings in the fiscal fourth quarter 2023
  • Domestic same store sales increased 21.2%**
  • Domestic restaurant AUV increased to $1.8 million
  • Digital sales increased to 67.0% of system-wide sales
  • Total revenue increased 21.2% to $127.1 million
  • Net income increased 6.9% to $18.8 million, or $0.64 per diluted share
  • Adjusted net income and adjusted earnings per diluted share, both non-GAAP measures increased 4.9% to $18.8 million, or $0.64 per diluted share
  • Adjusted EBITDA, a non-GAAP measure, increased 13.2% to $39.1 million

Highlights for the 52-week fiscal year 2023 compared to the 53-week fiscal year 2022:*

  • System-wide sales increased 27.1% to $3.5 billion
  • 255 net new openings in fiscal year 2023
  • System-wide restaurant count increased 13.0% to 2,214 worldwide locations
  • Domestic same store sales increased 18.3%**
  • Total revenue increased 28.7% to $460.1 million
  • Net income increased 32.5% to $70.2 million, or $2.35 per diluted share
  • Adjusted net income and adjusted earnings per diluted share, both non-GAAP measures, increased 36.0% to $74.1 million, or $2.48 per diluted share
  • Adjusted EBITDA, a non-GAAP measure, increased 36.1% to $146.5 million

*Fiscal year 2022 contained an extra week in the fourth quarter, which resulted in incremental system-wide sales of $57.4 million, incremental revenues of $7.2 million, incremental net income of $1.2 million and incremental Adjusted EBITDA of $2.6 million.

**Same store sales percentages were calculated excluding the 53rd week in 2022.

Adjusted EBITDA, adjusted net income, and adjusted earnings per diluted share are non-GAAP measures. Reconciliations of adjusted EBITDA, adjusted net income, and adjusted earnings per diluted share to the most directly comparable financial measure presented in accordance with accounting principles generally accepted in the United States (“GAAP”) are set forth in the schedule accompanying this release. See “Non-GAAP Financial Measures.”

“2023 marked the strongest year on record for Wingstop where we achieved 18.3% domestic same store sales growth, driven primarily by transactions, and we delivered an unprecedented 20 consecutive years of domestic same store sales growth,” said Michael Skipworth, President and Chief Executive Officer. “The strength of our unit economics were showcased with 255 net new units in 2023, a 13% unit growth rate, and a record level of restaurant development commitments as we enter 2024. We have a proven playbook and I couldn’t be more excited by our opportunity to scale Wingstop to more than 7,000 restaurants.”

Key operating metrics for the fiscal fourth quarter 2023 compared to the fiscal fourth quarter 2022:

Fiscal Quarter Ended

December 30, 2023

December 31, 2022

Number of system-wide restaurants open at end of period

2,214

1,959

Number of domestic franchise restaurants open at end of period

1,877

1,678

Number of international franchise restaurants open at end of period(1)

288

238

System-wide sales (in millions)

$ 966

$ 776

Domestic AUV (in thousands)

$ 1,827

$ 1,606

Domestic same store sales growth(2)

21.2 %

8.7 %

Company-owned domestic same store sales growth(2)

10.8 %

2.6 %

Net income (in thousands)

$ 18,814

$ 17,596

Adjusted net income (in thousands)

$ 18,814

$ 17,938

Adjusted EBITDA (in thousands)

$ 39,067

$ 34,500

_____________________________

(1)

Including U.S. territories.

(2)

Fiscal 2022 included a 53rd week; same store sales percentages were calculated excluding the 53rd week.

Fiscal fourth quarter 2023 financial results

Total revenue for the fiscal fourth quarter 2023 increased to $127.1 million from $104.9 million in the fiscal fourth quarter last year. Royalty revenue, franchise fees and other increased $10.6 million of which $13.6 million was due to domestic same store sales growth of 21.2% and net new franchise development, partially offset by $3.0 million of additional revenue from the 53rd week in fiscal year 2022. Advertising fees increased $7.8 million of which $10.5 million was due to a 24.5% increase in system-wide sales in the fiscal fourth quarter 2023, partially offset by $2.7 million of advertising fees associated with the 53rd week in fiscal year 2022. Company-owned restaurant sales increased $3.8 million due to an increase of $5.3 million related to the increase in the number of company-owned restaurants as compared to the prior fiscal fourth quarter and 10.8% company-owned domestic same store sales growth driven primarily by transactions, which were offset by $1.5 million of additional sales from the 53rd week in fiscal year 2022.

Cost of sales was $19.7 million compared to $17.1 million in the fiscal fourth quarter of the prior year. As a percentage of company-owned restaurant sales, cost of sales decreased to 75.1% from 76.4% in the prior year comparable period. The decrease as a percentage of company-owned restaurants sales was primarily driven by the sales leverage on labor and operating expenses that benefited from a 10.8% increase in company-owned same store sales compared to the prior fiscal fourth quarter.

Selling, general & administrative (“SG&A”) increased $9.7 million to $28.1 million from $18.3 million in the fiscal fourth quarter of the prior year. The prior fiscal year was impacted by the benefit of $1.3 million in forfeited stock awards, offset by additional expenses of approximately $1.0 million related to the 53rd week. The increase in SG&A expense was driven by an increase in professional fees of $2.9 million associated with the Company’s strategic initiatives, an increase in incentive compensation and performance-based stock compensation expense of $2.7 million primarily related to the Company’s current fiscal year performance, and an increase in headcount related expenses of $1.7 million to support the growth in our business.

Key Operating Metrics for the fiscal year 2023 compared to the fiscal year 2022:

Fiscal Year Ended

December 30, 2023

December 31, 2022

Number of system-wide restaurants open at end of period

2,214

1,959

Number of domestic franchise restaurants open at end of period

1,877

1,678

Number of international franchise restaurants open at end of period(1)

288

238

System-wide sales (in millions)

$ 3,482

$ 2,739

Domestic AUV (in thousands)

$ 1,827

$ 1,606

Domestic same store sales growth(2)

18.3 %

3.4 %

Company-owned domestic same store sales growth(2)

8.2 %

1.0 %

Net income (in thousands)

$ 70,175

$ 52,947

Adjusted net income (in thousands)

$ 74,089

$ 54,466

Adjusted EBITDA (in thousands)

$ 146,484

$ 107,644

________________________

(1)

Including U.S. territories.

(2)

Fiscal 2022 included a 53rd week; same store sales percentages were calculated excluding the 53rd week.

Fiscal year 2023 financial results

Total revenue for fiscal year 2023 increased to $460.1 million from $357.5 million in the prior fiscal year. Royalty revenue, franchise fees and other increased $48.5 million of which $51.5 million was due to domestic same store sales growth of 18.3% and net new franchise development, partially offset by approximately $3.0 million of additional revenue from the 53rd week in fiscal year 2022. Advertising fees increased $38.1 million primarily due to a 27.1% increase in system-wide sales in fiscal year 2023, which was offset by $2.7 million of additional advertising fees from the 53rd week in fiscal year 2022. Company-owned restaurant sales increased $15.9 million due to an increase of $17.4 million related to the increase in the number of company-owned restaurants as compared to the prior fiscal year and 8.2% company-owned domestic same store sales growth driven primarily by transactions, which were offset by approximately $1.5 million in sales from the 53rd week in the prior fiscal year.

Cost of sales was $70.6 million compared to $63.4 million in the prior fiscal year. As a percentage of company-owned restaurant sales, cost of sales decreased to 73.7% from 79.3% in the prior fiscal year. The decrease was driven primarily by food, beverage and packaging costs benefiting from a 27.1% decrease in the cost of bone-in chicken wings, as well as sales leverage on labor and operating expenses that benefited from an 8.2% increase in company-owned same store sales compared to the prior fiscal year.

SG&A increased to $96.9 million from $67.1 million in the prior fiscal year. The prior fiscal year was impacted by the benefit of $5.4 million in forfeited stock awards, offset by additional expenses of approximately $1.0 million related to the 53rd week. In addition, incentive compensation and performance-based stock compensation expense increased $9.3 million in fiscal year 2023 primarily related to the Company’s current fiscal year performance, professional and consulting fees increased $7.2 million associated with the Company’s strategic initiatives, and headcount related expenses increased $4.1 million to support the growth in our business.

Interest expense, net decreased $3.0 million to $18.2 million from $21.2 million in the prior fiscal year. The decrease was due to $3.9 million of additional interest income earned during fiscal year 2023, as well as approximately $0.4 million in interest expense related to the 53rd week in the prior fiscal year. These decreases were partially offset by an increase in interest expense related to the securitized financing transaction completed on March 9, 2022, which increased our outstanding debt by $250 million.

Financial Outlook

The Company expects the following for fiscal 2024:

  • Mid-single digit domestic same store sales growth;
  • Approximately 270 global net new units;
  • SG&A of approximately $108 million;
  • Stock-based compensation expense of approximately $19 million; and
  • Depreciation and amortization of between $18$19 million.

Restaurant Development

As of December 30, 2023, there were 2,214 Wingstop restaurants system-wide. This included 1,926 restaurants in the United States, of which 1,877 were franchised restaurants and 49 were company-owned, and 288 franchised restaurants were in international markets and U.S. territories. During fiscal year 2023, there were 255 net system-wide Wingstop restaurant openings.

Share Repurchase Program

As previously announced, during the fiscal third quarter of 2023, our board of directors approved a share repurchase program with authorization to purchase up to $250.0 million of our outstanding shares of common stock (the “Share Repurchase Authorization”). Pursuant to that program, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) to repurchase $125.0 million of its common stock.

Final settlement of the ASR Agreement occurred on December 21, 2023. In connection with the ASR Agreement, the Company received and retired a total of 645,952 shares of common stock at an average share price of $193.51. The total number of shares repurchased under the ASR Agreement was based on the daily volume-weighted average share price during the valuation period specified in the ASR Agreement, less a discount and subject to adjustments. As of December 30, 2023, $125.0 million remained available under the Share Repurchase Authorization.

Quarterly Dividend

In recognition of the Company’s strong cash flow generation and our commitment to returning value to stockholders, on February 20, 2024, our board of directors approved a quarterly dividend payable to Wingstop stockholders of $0.22 per share of common stock, resulting in a total dividend of approximately $6.5 million. This dividend will be paid on March 29, 2024 to stockholders of record as of March 8, 2024.

The following definitions apply to these terms as used in this release:

Domestic average unit volume (“AUV”) consists of the average annual sales of all restaurants that have been open for a trailing 52-week period or longer. This measure is calculated by dividing sales during the applicable period for all restaurants being measured by the number of restaurants being measured. Domestic AUV includes revenue from both company-owned and franchised restaurants. Domestic AUV allows management to assess our domestic company-owned and franchised restaurant economics. Changes in domestic AUV are primarily driven by increases in same store sales and are also influenced by opening new restaurants.

Domestic same store sales reflects the change in year-over-year sales for the same store restaurant base. We define the same store restaurant base to include those restaurants open for at least 52 full weeks. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and permanent closures. We review same store sales for domestic company-owned restaurants as well as system-wide domestic restaurants. Domestic same store sales growth is driven by increases in transactions and average transaction size. Transaction size increases are driven by price increases or favorable mix shift from either an increase in items purchased or shifts into higher priced items.

System-wide sales represents net sales for all of our company-owned and franchised restaurants, as reported by franchisees. This measure allows management to better assess changes in our royalty revenue, our overall store performance, the health of our brand and the strength of our market position relative to competitors. Our system-wide sales growth is driven by new restaurant openings as well as increases in same store sales.

Adjusted EBITDA is defined as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization (EBITDA), further adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and stock-based compensation expense. Beginning in the first quarter of 2023, gains and losses on disposal of assets are no longer presented as an adjustment to EBITDA, in our calculation of Adjusted EBITDA. Prior period amounts have been excluded from EBITDA adjustments to conform to the current presentation.

Adjusted net income is defined as net income adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and related tax adjustments that management believes are not indicative of the Company’s core operating results or business outlook over the long-term. Beginning in the first quarter of 2023, gains and losses on disposal of assets are no longer presented as an adjustment to net income, in our calculation of Adjusted net income. Prior period amounts have been excluded from net income adjustments to conform to the current presentation.

Adjusted earnings per diluted share is defined as adjusted net income divided by weighted average diluted share count.

We caution investors that amounts presented in accordance with our definitions above may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate certain non-GAAP measurements in the same manner.

Conference Call and Webcast

The Company will host a conference call today to discuss the fiscal fourth quarter and year end 2023 financial results at 10:00 AM Eastern Time. The conference call can be joined telephonically by dialing 1-877-259-5243 or 1-412-317-5176 (international) and asking for the Wingstop conference call. A replay will be available two hours after the call and can be accessed by dialing 1-877-344-7529 or 1-412-317-0088 (international), then entering the replay code 4399370. The replay will be available through Wednesday, February 28, 2024.

The conference call will also be webcast live and later archived on the investor relations section of Wingstop’s corporate website at ir.wingstop.com under the ‘News & Events’ section.

About Wingstop

Founded in 1994 and headquartered in Dallas, TX, Wingstop Inc. (NASDAQ: WING) operates and franchises more than 2,200 locations worldwide. The Wing Experts are dedicated to Serving the World Flavor through an unparalleled guest experience and a best-in-class technology platform, all while offering classic and boneless wings, tenders, and chicken sandwiches, cooked to order and hand sauced-and-tossed in fans’ choice of 11 bold, distinctive flavors. Wingstop’s menu also features signature sides including fresh-cut, seasoned fries and freshly-made ranch and bleu cheese dips.

In fiscal year 2023, Wingstop’s system-wide sales increased 27.1% to approximately $3.5 billion, marking the 20th consecutive year of same store sales growth. With a vision of becoming a Top 10 Global Restaurant Brand, Wingstop’s system is comprised of independent franchisees, or brand partners, who account for approximately 98% of Wingstop’s total restaurant count of 2,214 as of December 30, 2023.

A key to this business success and consumer fandom stems from The Wingstop Way, which includes a core value system of being Authentic, Entrepreneurial, Service-minded, and Fun. The Wingstop Way extends to the brand’s environmental, social and governance platform as Wingstop seeks to provide value to all guests.

In 2023, Wingstop earned its “Best Places to Work” certification. The Company landed on Entrepreneur Magazine’s “Fastest-Growing Franchises” list and ranked #16 on “Franchise 500.” Wingstop was listed on Technomic’s “Top 500 Chain Restaurant Report,” QSR Magazine’s “2023 QSR 50” and Franchise Time’s “40 Smartest-Growing Franchises.”

For more information visit www.wingstop.com or www.wingstop.com/own-a-wingstop and follow @Wingstop on Twitter, Instagram, Facebook, and TikTok. Learn more about Wingstop’s involvement in its local communities at www.wingstopcharities.org. Unless specifically noted otherwise, references to our website addresses or the website addresses of third parties in this press release do not constitute incorporation by reference of the information contained on such website and should not be considered part of this release.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP financial measures, including those indicated above. By providing non-GAAP financial measures, together with a reconciliation to the most comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. These measures are not intended to be considered in isolation or as substitutes for, or superior to, financial measures prepared and presented in accordance with GAAP. The non-GAAP measures used in this press release may be different from the measures used by other companies. A reconciliation of each measure to the most directly comparable GAAP measure is available in this news release. In addition, the Current Report on Form 8-K furnished to the Securities and Exchange Commission (the “SEC”) concurrent with the issuance of this press release includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.

Forward-looking Statements

This news release includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to the discussion of our business strategies and our expectations concerning future operations, margins, profitability, trends, liquidity and capital resources and to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “may,” “will,” “should,” “expect,” “intend,” “plan,” “outlook,” “guidance,” “anticipate,” “believe,” “think,” “estimate,” “seek,” “predict,” “can,” “could,” “project,” “potential” or, in each case, their negative or other variations or comparable terminology, although not all forward-looking statements are accompanied by such terms. Examples of forward-looking statements in this news release include, but are not limited to, our 2024 fiscal year outlook for domestic same store sales growth, global net new units, SG&A expense, stock-based compensation expense, and depreciation and amortization. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties, risks, and factors relating to our operations and business environments, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by these forward-looking statements. Please refer to the risk factors discussed in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which can be found at the SEC’s website www.sec.gov. The discussion of these risks is specifically incorporated by reference into this news release.

When considering forward-looking statements in this news release or that we make in other reports or statements, you should keep in mind the cautionary statements in this news release and future reports we file with the SEC. New risks and uncertainties arise from time to time, and we cannot predict when they may arise or how they may affect us. Any forward-looking statement in this news release speaks only as of the date on which it was made. Except as required by law, we assume no obligation to update or revise any forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Media Contact
Maddie Lupori
[email protected]

Investor Contact
Kristen Thomas
[email protected]

WINGSTOP INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(amounts in thousands, except share and per share data)

December 30,
2023

December 31,
2022

Assets

Current assets

Cash and cash equivalents

$ 90,216

$ 184,496

Restricted cash

11,444

13,296

Accounts receivable, net

12,408

9,461

Prepaid expenses and other current assets

4,948

4,252

Advertising fund assets, restricted

25,328

15,167

Total current assets

144,344

226,672

Property and equipment, net

91,292

66,851

Goodwill

67,708

62,514

Trademarks

32,700

32,700

Customer relationships, net

7,740

9,015

Other non-current assets

34,041

26,438

Total assets

$ 377,825

$ 424,190

Liabilities and stockholders’ deficit

Current liabilities

Accounts payable

$ 4,725

$ 5,219

Other current liabilities

40,951

34,726

Current portion of debt

7,300

Advertising fund liabilities

25,328

15,167

Total current liabilities

71,004

62,412

Long-term debt, net

712,327

706,846

Deferred revenues, net of current

30,145

27,052

Deferred income tax liabilities, net

3,721

4,180

Other non-current liabilities

17,994

14,561

Total liabilities

835,191

815,051

Commitments and contingencies

Stockholders’ deficit

Common stock, $0.01 par value; 100,000,000 shares authorized;
29,337,920 and 29,932,668 shares issued and outstanding as of
December 30, 2023 and December 31, 2022, respectively

293

300

Additional paid-in-capital

2,676

2,797

Retained deficit

(459,994)

(393,321)

Accumulated other comprehensive loss

(341)

(637)

Total stockholders’ deficit

(457,366)

(390,861)

Total liabilities and stockholders’ deficit

$ 377,825

$ 424,190

WINGSTOP INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(amounts in thousands, except per share data)

Fiscal Quarter Ended

Fiscal Year Ended

December 30,
2023

December 31,
2022

December 30,
2023

December 31,
2022

(Unaudited)

(Unaudited)

Revenue:

Royalty revenue, franchise fees and other

$ 57,705

$ 47,137

$ 207,077

$ 158,614

Advertising fees

43,128

35,339

157,138

119,011

Company-owned restaurant sales

26,224

22,391

95,840

79,896

Total revenue

127,057

104,867

460,055

357,521

Costs and expenses:

Cost of sales (1)

19,687

17,098

70,646

63,395

Advertising expenses

45,830

37,111

166,583

123,069

Selling, general and administrative

28,078

18,339

96,898

67,061

Depreciation and amortization

3,648

3,289

13,239

10,899

Loss on disposal of assets

159

95

1,164

Total costs and expenses

97,243

75,996

347,461

265,588

Operating income

29,814

28,871

112,594

91,933

Interest expense, net

4,890

5,310

18,227

21,230

Loss on debt extinguishment and financing
transactions

814

Other (income) expense

(66)

192

57

573

Income before income tax expense

24,990

23,369

94,310

69,316

Income tax expense

6,176

5,773

24,135

16,369

Net income

$ 18,814

$ 17,596

$ 70,175

$ 52,947

Earnings per share

Basic

$ 0.64

$ 0.59

$ 2.36

$ 1.77

Diluted

$ 0.64

$ 0.59

$ 2.35

$ 1.77

Weighted average shares outstanding

Basic

29,407

29,924

29,769

29,893

Diluted

29,508

30,003

29,856

29,963

Dividends per share

$ 0.22

$ 0.19

$ 0.82

$ 4.72

_______________________________

(1)

Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, but excludes depreciation and amortization, which are presented separately.

WINGSTOP INC. AND SUBSIDIARIES
Unaudited Supplemental Information
Cost of Sales Margin Analysis
(amounts in thousands)

Fiscal Quarter Ended

December 30, 2023

December 31, 2022

In dollars

As a % of
company-owned
restaurant sales

In dollars

As a % of
company-owned
restaurant sales

Cost of sales:

Food, beverage and packaging costs

$ 9,037

34.5 %

$ 7,732

34.5 %

Labor costs

6,279

23.9 %

5,447

24.3 %

Other restaurant operating expenses

5,035

19.2 %

4,457

19.9 %

Vendor rebates

(664)

(2.5) %

(538)

(2.4) %

Total cost of sales

$ 19,687

75.1 %

$ 17,098

76.4 %

Fiscal Year Ended

December 30, 2023

December 31, 2022

In dollars

As a % of
company-owned
restaurant sales

In dollars

As a % of
company-owned
restaurant sales

Cost of sales:

Food, beverage and packaging costs

31,697

33.1 %

30,579

38.3 %

Labor costs

22,963

24.0 %

19,234

24.1 %

Other restaurant operating expenses

18,314

19.1 %

15,380

19.3 %

Vendor rebates

(2,328)

(2.4) %

(1,798)

(2.3) %

Total cost of sales

$ 70,646

73.7 %

$ 63,395

79.3 %

WINGSTOP INC. AND SUBSIDIARIES
Unaudited Supplemental Information
Restaurant Count

Fiscal Quarter Ended

Fiscal Year Ended

December 30,
2023

December 31,
2022

December 30,
2023

December 31,
2022

Domestic Franchised Activity

Beginning of period

1,791

1,631

1,678

1,498

Openings

86

50

202

187

Closures

(1)

(1)

(4)

Acquired by Company

(1)

(2)

(3)

(3)

Re-franchised by Company

1

1

Restaurants end of period

1,877

1,678

1,877

1,678

Domestic Company-Owned Activity

Beginning of period

46

42

43

36

Openings

3

4

5

Closures

(1)

(1)

Acquired by Company

1

2

3

3

Re-franchised to franchisees

(1)

(1)

Restaurants end of period

49

43

49

43

Total Domestic Restaurants

1,926

1,721

1,926

1,721

International Franchised Activity(1)

Beginning of period

262

225

238

197

Openings

29

13

59

45

Closures

(3)

(9)

(4)

Restaurants end of period

288

238

288

238

Total System-wide Restaurants

2,214

1,959

2,214

1,959

__________________________

(1) Includes U.S. Territories.

WINGSTOP INC. AND SUBSIDIARIES
Non-GAAP Financial Measures – EBITDA and Adjusted EBITDA
(Unaudited)
(amounts in thousands)

Fiscal Quarter Ended

Fiscal Year Ended

December 30,
2023

December 31,
2022

December 30,
2023

December 31,
2022

Net income

$ 18,814

$ 17,596

$ 70,175

$ 52,947

Interest expense, net

4,890

5,310

18,227

21,230

Income tax expense

6,176

5,773

24,135

16,369

Depreciation and amortization

3,648

3,289

13,239

10,899

EBITDA

$ 33,528

$ 31,968

$ 125,776

$ 101,445

Additional adjustments:

Loss on debt extinguishment and financing
transactions (a)

1,124

Consulting fees (b)

450

5,150

875

Stock-based compensation expense (c)

5,539

2,082

15,558

4,200

Adjusted EBITDA

$ 39,067

$ 34,500

$ 146,484

$ 107,644

Impact of the 53rd week

(2,637)

(2,637)

Adjusted EBITDA, excluding impact of the 53rd week

$ 39,067

$ 31,863

$ 146,484

$ 105,007

_______________________________

(a)

Represents costs and expenses related to our 2022 securitized financing facility and payment of a special dividend; all transaction costs are included in Loss on debt extinguishment and financing transactions during the fiscal year ended December 31, 2022, with the exception of $310,000 that is included in Selling, general and administrative on the Consolidated Statements of Operations.

(b)

Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete, project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements of Operations. Fiscal year 2022 includes approximately $0.5 million of third-party consulting fees incurred relating to a strategic initiative to consider the development of a business plan and financial model for potential vertical integration of a poultry complex, which review was completed in fiscal year 2022. Fiscal year 2023 and the fiscal fourth quarter of 2022 include approximately $5.2 million and $0.4 million, respectively, in consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, and which review was completed in fiscal year 2023. Given the magnitude and scope of these two strategic review initiatives that are not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiatives not reflective of the ongoing costs to operate its business.

(c)

Includes non-cash, stock-based compensation, net of forfeitures.

WINGSTOP INC. AND SUBSIDIARIES
Non-GAAP Financial Measures – Adjusted Net Income and Adjusted EPS
(Unaudited)
(amounts in thousands, except per share data)

Fiscal Quarter Ended

Fiscal Year Ended

December 30,
2023

December 31,
2022

December 30,
2023

December 31,
2022

Numerator:

Net income

$ 18,814

$ 17,596

$ 70,175

$ 52,947

Adjustments:

Loss on debt extinguishment and financing
transactions (a)

1,124

Consulting fees (b)

450

5,150

875

Tax effect of adjustments (c)

(108)

(1,236)

(480)

Adjusted net income

$ 18,814

$ 17,938

$ 74,089

$ 54,466

Impact of the 53rd week

(1,167)

(1,167)

Adjusted net income, excluding impact of the 53rd week

$ 18,814

$ 16,771

$ 74,089

$ 53,299

Denominator:

Weighted-average shares outstanding – diluted

29,508

30,003

29,856

29,963

Adjusted earnings per diluted share

$ 0.64

$ 0.60

$ 2.48

$ 1.82

Adjusted earnings per diluted share, excluding impact of
the 53rd week

$ 0.64

$ 0.56

$ 2.48

$ 1.78

_______________________________

(a)

Represents costs and expenses related to our 2022 securitized financing facility and payment of a special dividend; all transaction costs are included in Loss on debt extinguishment and financing transactions during the fiscal year ended December 31, 2022, with the exception of $310,000 that is included in Selling, general and administrative on the Consolidated Statements of Operations.

(b)

Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete, project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements of Operations. Fiscal year 2022 includes approximately $0.4 million of third-party consulting fees incurred relating to a strategic initiative to consider the development of a business plan and financial model for potential vertical integration of a poultry complex, which review was completed in fiscal year 2022. Fiscal year 2023 and the fiscal fourth quarter of 2022 include approximately $5.2 million and $0.5 million, respectively, in consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, and which review was completed in fiscal year 2023. Given the magnitude and scope of these two strategic review initiatives that are not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiatives not reflective of the ongoing costs to operate its business.

(c)

Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an assumed effective tax rate of 24%, which includes provisions for U.S. federal income taxes, and assumes the respective statutory rates for applicable state and local jurisdictions.

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SOURCE Wingstop

Wingstop Inc. Reports Fiscal Third Quarter 2023 Financial Results

Increases Same-Store Sales Outlook to Approximately 16% for Fiscal Year 2023

DALLAS, Nov. 1, 2023 — Wingstop Inc. (NASDAQ: WING) today announced financial results for the fiscal third quarter ended September 30, 2023.

Highlights for the fiscal third quarter 2023 compared to the fiscal third quarter 2022:

  • System-wide sales increased 26.5% to $885.0 million
  • 53 net new openings in the fiscal third quarter 2023
  • Domestic same store sales increased 15.3%
  • Domestic restaurant AUVs increased to $1.8 million
  • Digital sales increased to 66.9%
  • Total revenue increased 26.4% to $117.1 million
  • Net income increased 46.0% to $19.5 million, or $0.65 per diluted share
  • Adjusted net income and adjusted earnings per diluted share, both non-GAAP measures, increased 53.3% to $20.5 million, or $0.69 per diluted share
  • Adjusted EBITDA, a non-GAAP measure, increased 36.7% to $38.5 million

Adjusted EBITDA, adjusted net income, and adjusted earnings per diluted share are non-GAAP measures. Reconciliations of adjusted EBITDA, adjusted net income, and adjusted earnings per diluted share to the most directly comparable financial measure presented in accordance with accounting principles generally accepted in the United States (“GAAP”) are set forth in the schedule accompanying this release. See “Non-GAAP Financial Measures.”

“Our third quarter results showcase the multi-year strategies we are executing against, delivering 15.3% domestic same-store sales growth in the quarter, primarily driven by transaction growth. We are measuring record levels in brand health metrics, demonstrating the underlying momentum at Wingstop, and putting us on a path to deliver our 20th consecutive year of domestic same-store sales growth,” said Michael Skipworth, President and Chief Executive Officer. “This consistent growth, coupled with the strength of our unit economics, gives us the confidence in our 2023 global development outlook and our long-term vision of scaling Wingstop into a Top 10 Global Restaurant Brand.”

Key operating metrics for the fiscal third quarter 2023 compared to the fiscal third quarter 2022:

Thirteen Weeks Ended

September 30, 2023

September 24, 2022

Number of system-wide restaurants open at end of period

2,099

1,898

Number of domestic franchise restaurants open at end of period

1,791

1,631

Number of international franchise restaurants open at end of period

262

225

System-wide sales (in millions)

$ 885

$ 700

Domestic AUV (in thousands)

$ 1,755

$ 1,591

Domestic same store sales growth

15.3 %

6.9 %

Company-owned domestic same store sales growth

6.0 %

4.3 %

Net income (in thousands)

$ 19,511

$ 13,368

Adjusted net income (in thousands)

$ 20,499

$ 13,368

Adjusted EBITDA (in thousands)

$ 38,483

$ 28,155

Fiscal third quarter 2023 financial results

Total revenue for the fiscal third quarter 2023 increased to $117.1 million from $92.7 million in the fiscal third quarter last year. Royalty revenue, franchise fees and other increased $12.8 million due to domestic same store sales growth of 15.3% and net new franchise development. Advertising fees increased $7.8 million due to a 26.5% increase in system-wide sales in the fiscal third quarter 2023. Company-owned restaurant sales increased $3.8 million due to an increase of $2.1 million related to the addition of four net new company-owned restaurants since the prior fiscal third quarter, as well as a 6.0% increase in company-owned same store sales driven primarily by an increase in transactions.

Cost of sales increased to $17.6 million from $15.7 million in the fiscal third quarter of the prior year. As a percentage of company-owned restaurant sales, cost of sales decreased to 73.6% from 78.0% in the prior year comparable period. The decrease was primarily driven by food, beverage and packaging costs benefiting from a 13.5% decrease in the cost of bone-in chicken wings as compared to the prior fiscal third quarter.

Selling, general & administrative (“SG&A”) increased $6.4 million to $23.0 million from $16.7 million in the fiscal third quarter of the prior year. The increase in SG&A expense was driven by an increase in incentive compensation and performance-based stock compensation expense of $2.8 million primarily related to the Company’s current fiscal year performance, an increase in headcount related expenses of $1.7 million to support the growth in our business, and an increase in consulting fees of $1.3 million associated with the Company’s strategic initiatives.

Interest expense, net was $4.5 million, a decrease of $1.2 million compared to $5.7 million of interest expense, net in the comparable period in 2022. The decrease was driven by $1.0 million in additional interest income earned during the thirteen weeks ended September 30, 2023.

As previously announced, during the fiscal third quarter of 2023, our board of directors approved a share repurchase program with authorization to purchase up to $250.0 million of our outstanding shares of common stock. Pursuant to that program, the Company also entered into an accelerated share repurchase agreement (the “ASR Agreement”) to repurchase $125.0 million of its common stock.

During the fiscal third quarter of 2023, the Company made an initial payment of $125.0 million and received and retired 567,151 shares of its common stock under the ASR Agreement, representing an estimated 75% of the total shares expected to be delivered under the ASR Agreement, based on the closing price on the date of initial delivery of $165.30. The delivery of any remaining shares will occur at the final settlement of the transactions under the ASR Agreement, which is scheduled in the fiscal fourth quarter of 2023. As of September 30, 2023, the Company had a total remaining authorized amount for share repurchases under the program of approximately $125.0 million.

Financial Outlook

Based on year-to-date results, the Company is providing updated guidance for 2023, which is a 52-week fiscal year:

  • Approximately 16% domestic same store sales growth, previously 10% to 12%; and
  • SG&A of $94.5$95.5 million, previously $91.0$93.0 million.

Additionally, the Company is reiterating the following guidance for 2023:

  • 240 to 250 global net new units;
  • Stock-based compensation expense of approximately $14.0$15.0 million; and
  • Depreciation and amortization of between $14.0$15.0 million for 2023.

Restaurant Development

As of September 30, 2023, there were 2,099 Wingstop restaurants system-wide. This included 1,837 restaurants in the United States, of which 1,791 were franchised restaurants and 46 were company-owned, and 262 franchised restaurants were in international markets. During the fiscal third quarter 2023, there were 53 net system-wide Wingstop restaurant openings.

Quarterly Dividend

In recognition of the Company’s strong cash flow generation and our commitment to returning value to stockholders, on October 31, 2023, our board of directors approved a quarterly dividend payable to Wingstop stockholders of $0.22 per share of common stock, resulting in a total dividend of approximately $6.5 million. This dividend will be paid on December 8, 2023 to stockholders of record as of November 17, 2023.

The following definitions apply to these terms as used in this release:

Domestic average unit volume (“AUV”) consists of the average annual sales of all restaurants that have been open for a trailing 52-week period or longer. This measure is calculated by dividing sales during the applicable period for all restaurants being measured by the number of restaurants being measured. Domestic AUV includes revenue from both company-owned and franchised restaurants. Domestic AUV allows management to assess our domestic company-owned and franchised restaurant economics. Changes in domestic AUV are primarily driven by increases in same store sales and are also influenced by opening new restaurants.

Domestic same store sales reflects the change in year-over-year sales for the same store restaurant base. We define the same store restaurant base to include those restaurants open for at least 52 full weeks. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and permanent closures. We review same store sales for domestic company-owned restaurants as well as system-wide domestic restaurants. Domestic same store sales growth is driven by increases in transactions and average transaction size. Transaction size increases are driven by price increases or favorable mix shift from either an increase in items purchased or shifts into higher priced items.

System-wide sales represents net sales for all of our company-owned and franchised restaurants, as reported by franchisees. This measure allows management to better assess changes in our royalty revenue, our overall store performance, the health of our brand and the strength of our market position relative to competitors. Our system-wide sales growth is driven by new restaurant openings as well as increases in same store sales.

Adjusted EBITDA is defined as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization (EBITDA), further adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and stock-based compensation expense. Beginning in the first quarter of 2023, gains and losses on disposal of assets are no longer presented as an adjustment to EBITDA, in our calculation of Adjusted EBITDA. Prior period amounts have been excluded from EBITDA adjustments to conform to the current presentation.

Adjusted net income is defined as net income adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and related tax adjustments that management believes are not indicative of the Company’s core operating results or business outlook over the long-term.

Adjusted earnings per diluted share is defined as adjusted net income divided by weighted average diluted share count.

We caution investors that amounts presented in accordance with our definitions above may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate certain non-GAAP measurements in the same manner.

Conference Call and Webcast

The Company will host a conference call today to discuss the fiscal third quarter 2023 financial results at 10:00 AM Eastern Time. The conference call can be joined telephonically by dialing 1-877-259-5243 or 1-412-317-5176 (international) and asking for the Wingstop conference call. A replay will be available two hours after the call and can be accessed by dialing 1-877-344-7529 or 1-412-317-0088 (international), then entering the replay code 8628191. The replay will be available through Wednesday, November 8, 2023.

The conference call will also be webcast live and later archived on the investor relations section of Wingstop’s corporate website at ir.wingstop.com under the ‘News & Events’ section.

About Wingstop

Founded in 1994 and headquartered in Dallas, TX, Wingstop Inc. (NASDAQ: WING) operates and franchises more than 2,050 locations worldwide. The Wing Experts are dedicated to Serving the World Flavor through an unparalleled guest experience and use of a best-in-class technology platform, all while offering classic and boneless wings, tenders, and chicken sandwiches, always cooked to order and hand sauced-and-tossed in fans’ choice of 11 bold, distinctive flavors. Wingstop’s menu also features signature sides including fresh-cut, seasoned fries and freshly-made ranch and bleu cheese dips.

In fiscal year 2022, Wingstop’s system-wide sales increased 16.8% to approximately $2.7 billion, marking the 19th consecutive year of same store sales growth. With a vision of becoming a Top 10 Global Restaurant Brand, Wingstop’s system is comprised of independent franchisees, or brand partners, who account for approximately 98% of Wingstop’s total restaurant count of 2,099 as of September 30, 2023.

A key to this business success and consumer fandom stems from The Wingstop Way, which includes a core value system of being Authentic, Entrepreneurial, Service-minded, and Fun. The Wingstop Way extends to the brand’s environmental, social and governance platform as Wingstop seeks to provide value to all guests.

Rounding out a strong year in 2022, the Company made Technomic 500’s “Fastest Growing Franchise” list, was ranked #16 on Entrepreneur Magazine’s “Franchise 500,” won Fast Casual’s Excellence in Food Safety award, and was named to Fast Company’s “The World’s Most Innovative Companies” list ranking #4 in the dining category.

For more information visit www.wingstop.com or www.wingstop.com/own-a-wingstop and follow @Wingstop on Twitter, Instagram, Facebook, and TikTok. Learn more about Wingstop’s involvement in its local communities at www.wingstopcharities.org.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use non-GAAP financial measures, including those indicated above. By providing non-GAAP financial measures, together with a reconciliation to the most comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. These measures are not intended to be considered in isolation or as substitutes for, or superior to, financial measures prepared and presented in accordance with GAAP. The non-GAAP measures used in this press release may be different from the measures used by other companies. A reconciliation of each measure to the most directly comparable GAAP measure is available in this news release. In addition, the Current Report on Form 8-K furnished to the Securities and Exchange Commission (the “SEC”) concurrent with the issuance of this press release includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.

Forward-looking Statements

This news release includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to the discussion of our business strategies and our expectations concerning future operations, margins, profitability, trends, liquidity and capital resources and to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “may,” “will,” “should,” “expect,” “intend,” “plan,” “outlook,” “guidance,” “anticipate,” “believe,” “think,” “estimate,” “seek,” “predict,” “can,” “could,” “project,” “potential” or, in each case, their negative or other variations or comparable terminology, although not all forward-looking statements are accompanied by such terms. Examples of forward-looking statements in this news release include, but are not limited to, our 2023 fiscal year outlook for domestic same store sales growth, SG&A expense, stock-based compensation expense, depreciation and amortization, and unit growth. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties, risks, and factors relating to our operations and business environments, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by these forward-looking statements. Please refer to the risk factors discussed in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which can be found at the SEC’s website www.sec.gov. The discussion of these risks is specifically incorporated by reference into this news release.

When considering forward-looking statements in this news release or that we make in other reports or statements, you should keep in mind the cautionary statements in this news release and future reports we file with the SEC. New risks and uncertainties arise from time to time, and we cannot predict when they may arise or how they may affect us. Any forward-looking statement in this news release speaks only as of the date on which it was made. Except as required by law, we assume no obligation to update or revise any forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Media Contact
Maddie Lupori
[email protected]

Investor Contact
Kristen Thomas
[email protected]

WINGSTOP INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(amounts in thousands, except share and per share data)

September 30,
2023

December 31,
2022

(Unaudited)

Assets

Current assets

Cash and cash equivalents

$ 77,983

$ 184,496

Restricted cash

11,444

13,296

Accounts receivable, net

11,951

9,461

Prepaid expenses and other current assets

5,907

4,252

Advertising fund assets, restricted

25,558

15,167

Total current assets

132,843

226,672

Property and equipment, net

84,344

66,851

Goodwill

65,175

62,514

Trademarks

32,700

32,700

Customer relationships, net

8,059

9,015

Other non-current assets

28,555

26,438

Total assets

$ 351,676

$ 424,190

Liabilities and stockholders’ deficit

Current liabilities

Accounts payable

$ 5,104

$ 5,219

Other current liabilities

36,670

34,726

Current portion of debt

7,300

Advertising fund liabilities

25,558

15,167

Total current liabilities

67,332

62,412

Long-term debt, net

711,867

706,846

Deferred revenues, net of current

28,769

27,052

Deferred income tax liabilities, net

2,980

4,180

Other non-current liabilities

16,170

14,561

Total liabilities

827,118

815,051

Commitments and contingencies

Stockholders’ deficit

Common stock, $0.01 par value; 100,000,000 shares authorized;
29,414,920 and 29,932,668 shares issued and outstanding as of
September 30, 2023 and December 31, 2022, respectively

294

300

Additional paid-in-capital

1,238

2,797

Retained deficit

(476,413)

(393,321)

Accumulated other comprehensive loss

(561)

(637)

Total stockholders’ deficit

(475,442)

(390,861)

Total liabilities and stockholders’ deficit

$ 351,676

$ 424,190

WINGSTOP INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(amounts in thousands, except per share data)

Thirteen Weeks Ended

September 30,
2023

September 24,
2022

(Unaudited)

(Unaudited)

Revenue:

Royalty revenue, franchise fees and other

$ 53,200

$ 40,363

Advertising fees

39,951

32,146

Company-owned restaurant sales

23,953

20,163

Total revenue

117,104

92,672

Costs and expenses:

Cost of sales (1)

17,622

15,724

Advertising expenses

42,381

33,106

Selling, general and administrative

23,047

16,686

Depreciation and amortization

3,384

2,836

Loss on disposal of assets

18

239

Total costs and expenses

86,452

68,591

Operating income

30,652

24,081

Interest expense, net

4,520

5,742

Other (income) expense

(19)

290

Income before income tax expense

26,151

18,049

Income tax expense

6,640

4,681

Net income

$ 19,511

$ 13,368

Earnings per share

Basic

$ 0.66

$ 0.45

Diluted

$ 0.65

$ 0.45

Weighted average shares outstanding

Basic

29,750

29,915

Diluted

29,818

29,967

Dividends per share

$ 0.22

$ 0.19

(1) Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses,
and excludes depreciation and amortization, which are presented separately.

WINGSTOP INC. AND SUBSIDIARIES

Unaudited Supplemental Information

Cost of Sales Margin Analysis

(amounts in thousands)

Thirteen Weeks Ended

September 30, 2023

September 24, 2022

In dollars

As a % of
company-owned
restaurant sales

In dollars

As a % of
company-owned
restaurant sales

Cost of sales:

Food, beverage and packaging costs

$ 7,910

33.0 %

$ 7,504

37.2 %

Labor costs

5,646

23.6 %

4,652

23.1 %

Other restaurant operating expenses

4,645

19.4 %

4,009

19.9 %

Vendor rebates

(579)

(2.4) %

(441)

(2.2) %

Total cost of sales

$ 17,622

73.6 %

$ 15,724

78.0 %

WINGSTOP INC. AND SUBSIDIARIES

Unaudited Supplemental Information

Restaurant Count

Thirteen Weeks Ended

September 30,
2023

September 24,
2022

Domestic Franchised Activity:

Beginning of period

1,749

1,600

Openings

42

32

Closures

Acquired by Company

(1)

Restaurants end of period

1,791

1,631

Domestic Company-Owned Activity:

Beginning of period

45

39

Openings

1

2

Closures

Acquired by Company

1

Restaurants end of period

46

42

Total Domestic Restaurants

1,837

1,673

International Franchised Activity:

Beginning of period

252

219

Openings

13

9

Closures

(3)

(3)

Restaurants end of period

262

225

Total System-wide Restaurants

2,099

1,898

WINGSTOP INC. AND SUBSIDIARIES

Non-GAAP Financial Measures – EBITDA and Adjusted EBITDA

(Unaudited)

(amounts in thousands)

Thirteen Weeks Ended

September 30,
2023

September 24,
2022

Net income

$ 19,511

$ 13,368

Interest expense, net

4,520

5,742

Income tax expense

6,640

4,681

Depreciation and amortization

3,384

2,836

EBITDA

$ 34,055

$ 26,627

Additional adjustments:

Consulting fees (a)

1,300

Stock-based compensation expense (b)

3,128

1,528

Adjusted EBITDA

$ 38,483

$ 28,155

(a) Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete,
project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements
of Operations. The costs incurred in the thirteen weeks ended September 30, 2023 include consulting fees relating to a
comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, and
which review is expected to be completed in fiscal year 2023. Given the magnitude and scope of the strategic review initiative
that is not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with
respect to the initiative not reflective of the ongoing costs to operate its business.

(b) Includes non-cash, stock-based compensation.

WINGSTOP INC. AND SUBSIDIARIES

Non-GAAP Financial Measures – Adjusted Net Income and Adjusted EPS

(Unaudited)

(amounts in thousands, except per share data)

Thirteen Weeks Ended

September 30,
2023

September 24,
2022

Numerator:

Net income

$ 19,511

$ 13,368

Adjustments:

Consulting fees (a)

1,300

Tax effect of adjustments (b)

(312)

Adjusted net income

$ 20,499

$ 13,368

Denominator:

Weighted-average shares outstanding – diluted

29,818

29,967

Adjusted earnings per diluted share

$ 0.69

$ 0.45

(a) Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete,
project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements
of Operations. The costs incurred in the thirteen weeks ended September 30, 2023 include consulting fees relating to a
comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, and
which review is expected to be completed in fiscal year 2023. Given the magnitude and scope of the strategic review initiative
that is not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with
respect to the initiative not reflective of the ongoing costs to operate its business.

(b) Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an assumed effective tax rate
of 24% for the period ended September 30, 2023, which includes provisions for U.S. federal income taxes, and assumes the
respective statutory rates for applicable state and local jurisdictions.

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SOURCE Wingstop Restaurants Inc.

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