Wingstop Earnings: Record Openings Offset Comp Decline, Smart Kitchen Fuels Growth
- Hardik Shah
- Jul 30
- 3 min read
TLDR
🔼 Revenue Strength:Total revenue rose 12% to $174.3M, driven by strong unit growth despite a 1.9% domestic same-store sales decline.
📉 Margin Trends:Adjusted EBITDA grew 14.3% to $59.2M, while cost of sales fell 70bps thanks to Smart Kitchen efficiencies and stable food costs.
📈 Forward Outlook:Management raised 2025 global unit growth guidance to 17–18%, banking on strong development momentum and Smart Kitchen benefits.
Business Overview
Wingstop Inc. (NASDAQ: WING), headquartered in Dallas, TX, is a fast-growing fast-casual restaurant chain specializing in cooked-to-order wings and chicken offerings in 12 bold flavors. With over 2,800 locations across domestic and international markets, 98% franchised, the brand generates approximately $5B in annual system-wide sales. Wingstop’s digital prowess—now over 72% of sales—along with its asset-light model, supports its vision to become a Top 10 Global Restaurant Brand.
Wingstop Earnings Q2'25
Revenue Performance:Q2 2025 revenue rose 12.0% YoY to $174.3M, with growth driven by:
$9.8M from net new franchise development
$7.3M increase in advertising fees
$2.6M lift in company-owned restaurant sales
Margins and Profitability:
Adjusted EBITDA: $59.2M (+14.3% YoY)
Adjusted EPS: $1.00 (+1.6% YoY)
Net Income: $26.8M (−2.6% YoY)
Cost of Sales: Down 70bps to 75.2% of company-owned restaurant sales
Key Drivers:
Growth from 129 net new units (highest ever in a quarter)
Smart Kitchen efficiencies reducing ticket times by 40%
Food cost stabilization at ~34% of system sales
Forward Guidance
Management Outlook (2025):
Global unit growth: Raised to 17–18% (from 16–17%)
Domestic same-store sales: Reiterated at ~1%
SG&A: $140M (includes $4.5M system implementation costs)
Depreciation & amortization: $28–29M
Interest expense: Reduced to ~$39M (from $40M)
Risks & Opportunities:
Continued macro pressure on low-income consumer segments
Smart Kitchen rollout expected to drive comps in H2
No Smart Kitchen impact yet included in FY guidance
Operational Performance
Restaurant Expansion:
129 net new units in Q2
Openings spanned 46 states and multiple international markets
Strong pipeline of sold franchise commitments
Smart Kitchen Rollout:
Now live in 1,000+ U.S. locations
40% reduction in ticket times
8-point improvement in guest satisfaction
Driving higher sales, especially in lunch/late night and delivery
Segment Highlights:
Domestic AUVs reached $2.1M
DFW market outperformed, showing strong post-rollout trends
International markets exceeding domestic AUVs in many cases
Market Insights
Industry-wide softness in July acknowledged, especially among lower-income Hispanic consumers
Guests responded well to value offerings like the “20 for $20” bundle, which lifted average check size
Limited-time flavors and targeted promotions remain effective levers
Consumer Behavior & Sentiment
Some trade-down behavior observed in pressured income cohorts
High guest engagement and retention with new tenders launch
Smart Kitchen improves delivery speed, putting Wingstop into under-30-minute delivery filters
“We’re unlocking delivery times under 30 minutes on third-party delivery marketplaces… now in the consideration set for more guests.” – CEO Michael Skipworth
Strategic Initiatives
Smart Kitchen: Game-changing ops platform; full rollout by year-end
Loyalty Program: Piloting in Q4, full launch in 2026
Product Innovation: Strong performance of relaunched tenders, with new flavors and combos driving reactivation
“The Wingstop Smart Kitchen is clearly delivering… enabling operational excellence and fueling growth.” – CEO Michael Skipworth
“We’re just scratching the surface on [NBA] partnership… building deeper fan connections.” – CEO Michael Skipworth
Capital Allocation
Dividend: Increased to $0.30/share (from $0.27), ~8.4M payout
Buybacks: $370M executed YTD; $191M still authorized
Debt: $500M added in late 2024 via securitization to fund buybacks
The Bottom Line
Wingstop’s Q2 shows that strategic investments in technology, operational discipline, and brand expansion are offsetting near-term comp softness. With Smart Kitchen showing real-world traction, robust franchise demand, and a global footprint that’s gaining momentum,
Wingstop is well-positioned to sustain high-teens unit growth. Investors should watch:
Smart Kitchen’s full impact as rollout nears completion
Launch of the new loyalty program in 2026
Performance in pressured consumer segments amid macro uncertainty
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