Wingstop CEO on 20 straight years of same-store sales growth

Joining us this morning from the Jefferies Consumer Conference in Nantucket, Wingstop CEO, Michael Skipworth. Michael, we've been saying every conference should be held in Nantucket. It's great to have you with us. We mentioned earlier your string of of comp growth years. I just wonder what you think accounts for that and where you're taking traffic from? Yeah, Carl, we've, we've marked our 20th consecutive year of same store sales growth last year and we're well on our way to our 21st. And we've grown through various economic cycles and I think it has a lot to do with how consumers engage with our brand. We're a low frequency indulgent occasion. And what we've seen in previous economic cycles is when a consumer is going to pull back on dining, now at the 1st place they pull back is on that high frequency fast food occasion. And it's almost as though they get to the get to payday, get to the end of the month and they feel like they should reward themselves or treat themselves. And if they're aware of Wingstop, we've demonstrated an ability to win and retain those indulgent occasions. I know this is a bit stereotypical, but do you think it has anything to do with the rise in the popularity of live sports and the way in which media consumption is so concentrated in that element of of television or, or sports Wings are enjoyed in a group occasion. There's no better way to bring a group of people together and enjoy Wingstop than than watching live sports. But we have success in other occasions as well. And I think you mentioned it earlier, but in the first quarter, we saw an increase in frequency across all income cohorts, delivering over a 21% same store sales growth. And I think that just demonstrates that people are really enjoying engaging with our brand and we're excited about the momentum we have in front of us. Ambassador's always looking for the next area of growth. What about lunch? I know you've gone in with a chicken sandwich. How how is that going and what kind of potential for growth does it have? The chicken sandwich is really exciting opportunity for us. There are 2.4 billion chicken sandwiches served in the US annually and we think we can win our fair share. The chicken sandwich is bringing a lot of new guests into our brand and what we're learning about these new guests that are coming in as it's an easy entry point into Wingstop. And then they're learning to navigate the rest of our menu. And we're actually seeing these guests come back sooner and we're seeing them move up the frequency curve faster, which gets us really excited. I also had a question on, on inflation and chicken and chicken wings, 'cause it it, it hasn't necessarily correlated with the rest of food inflation early on. You guys gave a lot of it back and there was, I think, chicken wing deflation. Lately, there's been a pickup in chicken prices. So where are you now? The exciting thing for Wingstop is we've made great progress in our supply chain strategy and we're not tied to the spot market anymore for buying bone in wings. And so we've demonstrated a very disciplined approach to pricing. And I think that disciplined approach is paying dividends. We're measuring record levels with consumers in value and quality scores when a lot of other brands are measuring declines. So we're not going to see changes in consumer prices. We continue to lean into our disciplined approach of pricing, which is a one to two points of price a year. And we think that when we deliver on that quality cook to order indulgent occasion, consumers see value in that and they're rewarding us for it and coming back sooner and more frequently. It kind of ties in with what some analysts have said about the franchise model and the degree to which you protect franchisees from some swings in commodity prices. Is that a competitive advantage and how do you do that, especially in an era where we're seeing a lot of friction between franchisees incorporated other chains? Yes, our, our unit economics today are as strong as they've ever been. Our franchisees can open up a wing stop on an initial investment of about 1/2 a million dollars, $500,000 and they're seeing a year 2 unlevered cash on cash return in excess of 70%. So our brand partners, they're excited, they want to open more restaurants, want to open more wing stops and that's what's allowing us to deliver industry leading unit growth.