• by Teresa Buyikian , August 3, 2023

As one of fastest-growing chicken chains in the world, Wingstop had much good news to report in its latest earning call this week.

Total revenue for the fiscal second quarter 2023 increased to $107.2 million from $83.8 million in the fiscal second quarter last year. Royalty revenue, franchise fees and other increased $11.9 million primarily due to domestic same store sales growth of 16.8% and 182 net new franchise restaurants since June 25, 2022. Advertising fees increased $7.6 million due to a 27.8% increase in system-wide sales in the fiscal second quarter 2023.

Looking ahead, the company updated its earlier guidance: what was now forecast as 10% to 12% domestic same store sales growth was previously in the high-single digits, and 240 to 250 global net new units, previously 240 global net new units.

Wedbush "views Wingstop’s current valuation as an accurate reflection of sustained long-term market share gains," noted Nick Setyan, Wedbush Securities managing director, equity research, restaurants.

It appears wing costs have leveled out after a price surge earlier this year. As a percentage of company-owned restaurant sales, cost of sales decreased to 73.7% from 79.5% in the prior year comparable period. The decrease was primarily driven by food, beverage and packaging costs benefiting from a 39.6% decrease in the cost of bone-in chicken wings as compared to the prior fiscal second quarter.

“As management's efforts to mitigate food cost volatility continue, we are hopeful that this wing cycle could be different,” said Setyan.

As of July 1, 2023, there were 2,046 Wingstop restaurants systemwide. This included 1,794 restaurants in the United States, of which 1,749 were franchised restaurants and 45 were company-owned, and 252 franchised restaurants were in international markets.

During the fiscal second quarter 2023, there were 50 net system wide Wingstop restaurant openings. Wingstop made Technomic 500's "Fastest Growing Franchise" list, was ranked #16 on Entrepreneur Magazine's "Franchise 500," and was named to Fast Company's "The World's Most Innovative Companies" list, ranking #4 in the dining category.