Well. Rising costs of food and a looming recession
have not faced fans of the Chicken Wing. A
giant wings stop posting blockbuster results for the third quarter
and shares jumping at more than 10% after the company
upped. Yes, it raised its full year earnings
guidance over the past few days to stock up 5.6%
. The company wing stop saying better than expected earnings
did happen in part because of the falling cost of
bone in chicken wings and unusual phenomenon in the current
inflationary environment. And joining me now is Michael skip
with President and Ceo of Wingstop Michael. It's great
to have you on the show per usual. So
your company exceeding expectations. And besides the slip that
we saw in these wholesale costs for chicken wings,
what else is working Kristen we have such a unique
growth story at Wingstop. It has a little bit
to do with how consumers engage with our brand.
It's an indulgent occasion. Our frequency isn't as high
as a lot of other brands three times a quarter
, once a month is when guests visit Wingstop.
So as long as we're presenting them with value,
we know will retain those indulgent occasions. But then
we have some really unique growth levers that we've act
acted against the this third quarter, expanding our delivery
base to Uber eats. We've expanded our menu and
added a chicken sandwich that's bringing a lot of new
guests into our brand and what really has helped us
reverse the trend. We saw in Q. Two
and deliver the comp growth. You saw in Q
three of 6.9%. And what's really exciting about that
comp growth is the majority of it came from transaction
growth and the chicken sandwich wars Michael are so real
. We know that new product announcement, as you
mentioned obviously that chicken sandwich out in september, tell
me more about this sandwich and how it's expected to
drive sales going forward. The Chicken Sandwich Space,
you're right, has been highly competitive, but if
you look around brands are offering a plain or spicy
and what we did at Wingstop is we're offering consumers
12 different chicken sandwiches sauced and tossed in our unique
bold and distinctive flavors. And so it's really a
different experience that consumers love that variety. And we
think based on the sales result We've seen early on
that we have been invited by guests to play in
that Sandwich space. And I think we have a
lot of growth for the brand, not just in
Q3 but for a lot of quarters in front of
us. What else is in the pipeline Michael to
get more customers back in the store. If you
if you think about Wingstop, we have such a
meaningful opportunity in front of us just from making making
guests more aware of our brand. Our brand awareness
gap is really big compared to other national brands.
I mentioned expanding our delivery channel and then menu innovation
like chicken sandwich. Those three things working together really
provide a road for us to deliver our 19th consecutive
year of same store sales growth this year. Mm
hmm It's pretty impressive. And look, I'm sure
that these are probably popular items during major sporting events
. Will have the World Cup unusually around thanksgiving this
year due to the actual location, Big Bowl games
around the new year and ultimately the Super Bowl as
well. I would assume that delivery option that take
out option is probably a popular one for your business
during these key sporting events. Just how crucial is
it? And what is the growth that you expect
to see there? Yeah, those are great opportunities
in areas where we we play very well and play
strong. And I think if you just look at
this weekend in front of us right now where the
World Series is kicking off. We have Halloween on
monday we're launching a free delivery promotion and guests can
come to Wingstop dot com or download our app and
get free delivery for, for that sporting event.
Or maybe just for to eat while they're while their
kids are out trick or treating. We see other
companies kind of in this fast casual range. I
don't know if that's how you would refer to your
company Michael but Chipotle for instance, rolling out automation
using robots. That's a plan in the pipeline,
is that something that your company is considering turning toward
as well? We're always leaning in to innovation and
looking for ways to create more efficiencies within our restaurant
and ultimately further enhance those industry leading unit economics that
our franchisees enjoy. But our opportunity around automation and
labor enhancements is a little bit limited compared to other
brands are average. Unit volume is$1.6 million dollars
and you can operate a Wingstop with as few as
three or four team members in the rest of at
those volume levels. So the opportunity is not as
big, but we're going to continue to lean in
and find ways to protect and enhance those unit economics
Well, certainly flu and covid season is approaching Michael
. So how is your company planning to manage that
? Are there extra safety protocols for instance, that
will be put in place to keep your restaurants open
and your workers and diners safe throughout these colder winter
months? Yeah, we're in again in a pretty
unique spot there and I think we were well positioned
for when the pandemic hit in that the majority of
ourselves, our off premise, so we don't have
a lot of uh, in restaurant dining and so
having so much of your business out the door and
off premise really mitigates the risk from, from any
sort of cold season that we're going into. Um
, in terms of other offerings. Obviously chicken is
the creme de la creme at your restaurants, Michael
, but what are some other popular products, even
beverages that have been doing well, that might be
more on trend among your customer base. Yeah,
consumers come to Wingstop for that bold flavor experience and
that's really where we play well. And you,
you can see consumers even even exercise that creativity and
flavor crave in in their drink choice in flavor remixes
of their own. And we're gonna continue to lean
into flavor as a way to, to, to
innovate and, and dr occasions with our consumers.
And again, how we present our product, the
level of detail and attention that goes into our ranch
and blue cheese that are made from scratch in the
restaurant every day. Our french fries that are handcuffed
from potatoes and then the fact that our product is
cooked to order that that flavor expiry really brings alive
the Wingstop occasion for consumers. What about new locations
, Michael, What's in the pipeline? Interest rates
are rising. It is extremely expensive to expand in
this current environment. But is that in the plans
for you and if you are interested in opening new
locations, what are some of the places around the
country Christian? We're actually on pace for a record
development year. This year we've opened 167 net new
restaurants through the first nine months. And another unique
thing about our story is the initial investment to open
a Wingstop compared to other alternatives out there is really
low at only$400,000 and then the unit economics I
referenced earlier are so strong that payback can be less
than two years on that investment. And so we
see a lot of opportunity for growth in front of
us for 1900 units strong today. And we actually
see a path to over 7000 wing stops inside the
U. S. And around the globe. All
right, Michael, skip worth president and Ceo of
Wingstop and Michael thanks so much for joining.