Michael Skipworth, president, and CEO of Wingstop, joined Cheddar News to discuss the company's strong quarterly results.

Michael Skipworth, president, and CEO of Wingstop, joined Cheddar News to discuss the company's strong quarterly results as it expanded delivery services with Uber Eats and introduced a new chicken sandwich that helped with transaction growth.

Wingstop Tops Quarterly Estimates

Well. Rising cost 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 two days to stock up 5.6%. The company Wingstop 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. 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 with President and Ceo of Wingstop, and Michael thanks so much for joining.