Wingstop Inc. Q4 FY2024 earnings call

• Acknowledged wildfires in Southern California, partnered with American Red Cross to match donations up to $500,000 in February. • 2024 was a record year with 21 consecutive years of same-store sales growth. • Launched My Wingstop proprietary tech stack, with a digital database surpassing 50 million customers. • Developed an AI-enabled kitchen operating platform to improve service times and team member productivity. • International expansion saw 359 locations, with the UK acquisition valuing over $500M. • Raised over $2M for St. Jude's Children's Research Hospital in Q4 and delivered over $3.7M in community grants in 2024.

In fiscal 2024, domestic same-store sales grew by 19.9% primarily driven by transactions, with a two-year stacked comp of 38%. The company opened a record 349 net new restaurants, achieving a 15.8% unit growth. System-wide sales for 2024 reached $4.8 billion, a 36.8% increase. In the fourth quarter, system-wide sales increased 27.6% to $1.2 billion. Adjusted EBITDA in 2024 was $212 million, up 44.8%, and in the fourth quarter, adjusted EBITDA was $56.3 million, up 44%. Digital sales mix in the fourth quarter increased to 70%.

• 2025 same-store sales guidance: low to mid-single digits. • Global unit growth target: 14% to 15%. • SG&A guidance: approximately $140M, including $4.5M nonrecurring system implementation costs and $26M stock-based compensation. • Interest expense expected to be approximately $46M in 2025. • Advertising fund contribution rate increases from 5.3% to 5.5% in Q1 2025.

• Impact of wildfires in Southern California on business operations. • Macro-economic uncertainties affecting consumer spending patterns. • Intense competition in the QSR space potentially impacting market share.

Q: On comps outlook, low to mid-single digits for 2025. Comment on framework and Q1 trajectory.

A: Michael Skipworth discussed that the framework is an average for long-term targets, and the Q1 trajectory is affected by laps of prior high comps and unseasonal weather impacts. Alex Kaleida added that Q1 lapping includes two consecutive years of 20% comps.

Q: Follow-up on unit growth for 2025, 14% to 15% growth. Thoughts on US vs international openings.

A: Michael Skipworth mentioned the strong development pipeline with nearly 2,000 restaurant commitments, showcasing brand partner excitement and unit economics strength.

Q: On kitchen operating system, details and deployment.

A: Michael Skipworth explained the kitchen operating system leverages AI, improves service times, and is being co-developed for Wingstop, with plans for system-wide rollout within 12 months.

Q: On international expansion, impacts of UK acquisition and Canada momentum.

A: Alex Kaleida stated the UK acquisition creates value and international expansion is factored into the 14%-15% unit growth, with Canada showing strong momentum and potential for expansion into Western Europe.