Wingstop’s COVID-19 tailwinds are still quite strong, even a year into the pandemic.
The 1,579-unit chain released unaudited results Wednesday that showed U.S. same-store sales increased 20.7 percent in Q1, or 30.6 percent on a two-year basis. Corporate same-store sales lifted 13.4 percent as well. Digital sales skyrocketed 63.6 percent, compared to 43.3 percent in the year-ago period.
The company saw 41 net new openings—a Q1 record and 11.7 percent increase year-over-year. CEO Charlie Morrison said it was the result of achieving more than $1.5 million AUVs, which translates to best-in-class unit economics and the brand’s largest development pipeline to date.
“I’m confident we are well on our way to becoming a top 10 global restaurant brand,” Morrison said in a statement.
The CEO acknowledged in February Wingstop still has a ways to go before reaching that “top 10” moniker. He estimated that the brand awareness gap is in the mid-teens in terms of percentage points. The chain also has roughly 1,300 U.S. stores, much fewer than quick-service concepts like McDonalds, KFC, or Taco Bell.
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But the chain is getting there. In 2020, Wingstop opened 153 net new restaurants, 127 of which were in the U.S. This includes a record 59 net new openings systemwide in Q4. Entering 2021, the domestic pipeline comprised more than 700 stores—also a new record—which is up from 610 in the previous year.
“I think we’ve done an exceptional job, and it’s showcasing itself in the top line growth,” Morrison said in February. “And as we continue to invest and point our advertising muscle towards those people that really don’t know much about Wingstop, or maybe are aware but haven’t considered an occasion—which are those heavy [quick-service] users—there’s a huge, huge base of customers out there for us to go after and share some occasions with some of those other competitors.”
The red-hot chain is coming off a stellar 2020 in which it saw domestic comps raise 21.4 percent. In addition, digital grew to a 60 percent mix, and pushed past $1 billion in annual sales. The company also has approximately 20 million users in its database.
When Wingstop enters Q2, it will begin lapping enormous sales results. The immediate effects of the pandemic bolstered comps by 31.9 percent in Q2 and 25.4 percent in Q3. As the chain approaches these high bars, Morrison said Wingstop will leverage personalized 1:1 marketing and its growing database to generate repeat orders from new and existing customers. The chain also plans to use its system sales growth of 30 percent and surplus advertising funds to launch premium-placed ads in places it knows people will be watching, such as live sports.
“Any time you experience the kind of growth that Wingstop has experienced, and I would note, obviously this year growing systemwide sales by 30 percent, presents an opportunity for the company to evaluate investments we can make to further that performance into future years,” Morrison said. “As you know, this brand has already grown to about $2 billion in systemwide revenue now. We think there’s a necessity to make sure we have the right infrastructure, systems, and people in place to catapult us well beyond this point.”
