Analyzing the leaders in any industry is an important step in ensuring your success. In the restaurant industry, it’s difficult to look past Wingstop as one of the brands making headlines on a regular basis.
The latest news coming from this fast-casual chain is yet another record-breaking quarter. What’s their secret sauce, and how are they posting record sales while companies like Starbucks and McDonald’s are on the decline?
Let’s see what differentiates this ultra-successful brand from all the others.
Q2 2024 Sales
If you haven’t seen this figure yet, you may want to take a seat. Wingstop’s Q2 2024 saw an incredible 28.7% year-over-year sales growth, driven mainly by transaction growth. According to Black Box Intelligence, in the restaurant industry as a whole, March’s YoY same-store sales growth came to 0.1%, which is the first positive sales growth of the year.
Compared to the fiscal second quarter of 2023, 2024 saw Wingstop’s sales increase to $1.2 billion, an over 45% increase, comparatively.
On the Rise
Q2 2024 saw 73 new Wingstops entering the public domain. The average unit volume (AUV) grew to a record $2.0 million, a goal they set two years ago when that number came to $1.5 million. Now, they’ve set their sights on $3 million.
During their recent financial results report for the fiscal second quarter ending June 2024, Michael Skipworth, President and Chief Executive Officer, said, “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.”
Between July 1, 2023, and June 29, 2024, they opened a whopping 306 units, and their net income went from about $16.18 million to $27.48 million, an increase of almost 30%. System-wide, their restaurant count stands at 2,352 and growing.
Cost of Sales
Their cost of sales increased from 73.7% to 75.9% as a result of food, beverage, and packaging costs, particularly the cost of bone-in chicken wings. It’s a minor glitch in an incredible record and one partially offset by a decrease in other operating costs.
So, what is it about Wingstop that’s taken it to the top of the fast-casual game?
Catering to Both Ends of the Consumer Scale
Wingstop has created a concept that appeals to both the budget-conscious guest and those looking for a premium experience. They can retain premium price points and high-quality scores because their products are made to order, and their signature sauces set them apart in a crowded market. The shareable nature of their menu makes it a good fit for the cost-conscious consumer.
Going Global
They are also capitalizing on international growth, with 312 international franchise restaurants in operation as of June 29, 2024. On the Q1 2024 earnings call, Skipworth said, “There is a massive runway for growth internationally, with immense white space and brand awareness opportunity across the globe as consumers have the opportunity to experience our flavor for the first time.”
Flavor. It’s a word you can’t miss when researching trends in the restaurant industry. Wingstop offers 13 flavors, from Mango Habanero to Louisiana Rub and Hawaiian. They’re also known for their limited-time offers, currently Carolina Gold BBQ, The Meltdown, and Crunch Time. These LTOs urge guests to try a new flavor before it’s gone—smart marketing.
In addition to their well-known flavors and LTOs, their history includes a virtual-only concept called Thighstop and a Wingstop Chicken Sandwich. Thighstop arose when chicken wings were in short supply, and the chicken sandwich launch saw six weeks of inventory out the door in one week.
The company is nothing if not innovative while always staying true to its core brand.
Digital Awareness
Their shareable and bundled meals are ideal for dining in or taking out, offering boneless wings and crispy tenders with numerous flavors and dips. Wingstop has invested heavily in tech, and part of that is geared toward digital sales. These sales make up about 65% of Wingstop’s business.
So, what can we learn from this market leader? They’ve stayed focused on the essential ingredients to almost every brand’s success: staying true to what prompted their success while not being afraid of innovations and technology.
