Quarter 1
Q1 2026 Earnings Call — April 29, 2026
Analyst: It to the first quarter and maybe what you're seeing in April. and whether or not a concern at all related to the return to positive in the second half. And it does seem like, not necessarily are compares getting a lot easier, so presumably you're talking about some initiatives within your control, maybe the loyalty program, maybe what kind of assumption you're assuming for that loyalty program. But April and then kind of your confidence in turning back to positive in the back half of the year, kind of the biggest drivers. And then I had one follow up.
Executive: Hey Jeff, good morning. Yes, we did see an improvement in the trend to start Q2. You know, and it tied back a little bit to my previous comment around a little bit of that more pronounced near-term reaction to fuel prices, and that does normalize pretty quickly. But we saw an improvement, and I think as we updated our full-year outlook, we obviously took into consideration our actual results for Q1, but we did adjust down our expectations for Q2, which are somewhat related to our expectation of some near-term pressure on the consumer with elevated gas prices. Obviously, it's extremely difficult for anyone to predict this macro environment that we're in, but what we're really focused on, Jeff, is we are seeing some really positive signals in our business, whether it's as it relates to Smart Kitchen. We talked about That Friday and Saturday night day part that we're focused on, we saw a 16 percentage point improvement in the number of restaurants that are delivering on that 10 minute speed of service on Friday and Saturday night.
Our bottom quartile of restaurants, we saw a three minute improvement in overall speed within those, and we're measuring significant progress and improvements within guest satisfaction scores. All strong signals that give us a lot of excitement and confidence about the impact that Wingstop Smart Kitchen will have on our business over time. I mentioned the marketing. We feel like our marketing is resonating. We're seeing reactivation of labs. We're seeing that fastest-growing cohort, that 5,200K. We're seeing improvements in awareness and conversion, all really strong signals that it's resonating. And we have some exciting things coming within our pipeline as it relates to innovation that we're really excited about that we know based on the research that we've done is what is one of the number one drivers for this target that we're targeting within our demand space. And one of the number one drivers is really around innovation. And so we think that's going to position us well. And then Club Wingstop, it's a big one for us. We're excited about it. Our pilot results continue to strengthen.
We're seeing improvements in retention, in reactivation, in frequency. All really strong signals, and again, without the support of our national advertising and without really leveraging that platform at scale. And so the combination of those things do give us confidence in the early signals that we're seeing in the business. We expect over time to return to growth in the second half of the year.
Executive: Yeah, and Jeff, this is Alex. I could help translate a little bit on what we anticipate on the shape of the year. You know, with what we're seeing in the April trends and kind of knowing that this is at a little bit of hopefully the peak on, you know, fuel prices that the consumer is seeing, we're anticipating somewhere in the mid single-digit decline range for comps in the second quarter, followed by a gradual improvement into that low to mid single-digit positive range for the second half as these strategies come together and what Michael mentioned. And I think these are informed by just some ways that we've been able to see results in top performing restaurants on Smart Kitchen and what they're seeing in their business comp performance. Also what we're seeing in our pilot market, again, with very limited features and marketing behind it and seeing a measurable comp impact. So that's how we got to the shape of the outlook. Very similar to what we said last quarter, we anticipate a return to growth in the second half. Near term, we have brought forward a little bit of that inflation challenge that we're seeing from the war that took place at the start of March. But we have a high degree of confidence in this outlook and, in fact, are working to exceed it.
Analyst: Understood. And then my follow-up, Michael, franchisees, just based on your commentary, seem very happy. Obviously, the comp growth isn't where they want it to be, but the past couple of years, sales growth, the 70% type returns, they're generating all that supports the outside unit growth. But clearly, the current macro is challenge. I'm wondering if you could talk a little bit about the recent conversations with franchisees, what they're most focused on, and whether it ever becomes a discussion internally about considering maybe tempering unit growth. Clearly, you're running well above the 10% long-term algo with your 15% to 16% growth this year. Maybe there's some risk that it's cannibalizing. Maybe it makes sense to try and control or limit the outsized unit growth. Any thoughts there would be great. Thank you.
Executive: Yeah, Jeff, we mentioned this in our prepared remarks, but I think it's really important to say it again. And we actually saw our brand partner margins and profitability improve in the first quarter. And we talked about that's us making really intentional and strategic decisions about what's right for the business long term. And obviously continued progress with our supply chain strategy and continuing to protect and in some cases, enhance those industry-leading returns in unit economics. And they remain strong. The sentiment and the conversations with our brand partners, it's really a lot about acknowledgement that, you know, over the last few years, our AUVs have grown close to $500,000. And that combined with just continued focus and execution against protecting profitability has been pretty positive. But then when you layer on top of that, us working with them and talking to them about these strategies that we're executing and what's in front of us, there's a pretty high level of excitement around Wingsop and to continue to grow and to continue to expand. We feel like we're growing at the right pace.
We're obviously executing against our market level playbooks, which are very intentional and very clearly defined around where we open restaurants and at what pace and when we open those restaurants. But we mentioned it as well in our prepared remarks, our pipeline sits at a record level, which I think showcases the demand and excitement for growth. And based on the visibility we have in the pipeline today, we're able to reiterate our outlook this year, which is another industry-leading year of unit growth at 15% to 16%.
Analyst:
The next question comes from Andy Barish with Jefferies. Please go ahead.
Analyst: Hey, guys. Just wondering on kind of thoughts as you look out in terms of, you know, becoming a more mainstream brand, do you think kind of marketing has to – evolve as we look out maybe to 27, particularly given the, you know, the size and scale of your spend to more, you know, kind of traditional windows and, you know, promotions that are laid out. And then kind of also wondering just on the move to $3 million AUVs, if you could kind of frame up how much of that is maybe related to incremental you know chicken sandwich and tenders occasions just given how strong your you know your share is in the traditional wings business thanks.
Executive: Andy, I think that's a great question and if you go back, you know, four or five years we were able to be a little bit more of what I would characterize as a marketing strategy that was almost a one-size-fits-all. And as we look at how our business has grown and scaled and diversified to some degree, we are 100% aligned with the question you asked, and that is we have to be very targeted. Messages need to be different based on audience, based on channel, and I think that can go from linear TV all the way down to social platforms. And that's exactly the playbook that we're executing, is making sure our message is tailored specifically to the targeted audience that we're trying to reach. And I think you'll see more of that come to life as we talked about some of the next phase or next chapter of Wingstop is here. You're going to see a little bit more variation in the messages that we're putting in front of consumers, a little bit more targeted messaging as it relates to calls to action. But that's exactly the playbook that we're executing.
As we think about our path to $3 million AUVs, we do think there are a ton of chicken sandwich occasions that we are positioned to win, and we will win, and tenders are the same. But we also think there's a lot of group occasions. our Halo product, bone and chicken wings, that we're going to win as well as we educate more of these consumers who don't know about us or maybe don't consider Wingstop today. And that's what we're excited about as it relates to our Q1 results is we're seeing early signals in the business that we're making progress against all of those initiatives. And, Andy, I'd add, too, that, you know, we've historically anchored as an example on social media and as an area like TikTok, we now are diversifying more messaging and personalizing content to those channels across Meta, you know, Instagram, X, other areas where we can really speak to that new guest we're looking to acquire. So we think the timing is right to start to move more into those various social channels alongside the level of content we're able to produce and the relevance we can drive at the messaging in those channels. And congrats on number 500 internationally.
Analyst:
Thank you.
The next question comes from Chris O'Call with Stiefel. Please go ahead.
Analyst: Yeah, good morning, guys. I had a couple of follow-up questions from earlier ones. And, Michael, has the company – the company is guided to, I think, 15%, 16% unit growth this year, which continues to pace well ahead of the 10% long-term algo. But to what extent is this growth being driven by brand partners voluntarily developing ahead of their contractual mandates? And if franchisees reverted to the minimum requirements of their development agreements, what would that base unit growth rate look like?
Executive: Hey, Chris. Good morning. You know, I wouldn't say there's anything to call out as it relates to brand partners developing ahead of their schedule. In fact, I would say it goes back to these market-level playbooks, and that informs how we write these agreements. And we're writing these development agreements in a very targeted and intentional way that we believe is kind of really helping us have our hand on the dial and manage the pace of development. And so I would almost go so far as to say we discourage brand partners from developing ahead of that contractual commitment because we've been very intentional with how we've designed these agreements. And we believe we've got a strategy that we're executing against.
Analyst: Okay, that's helpful. And then we've noticed the sub-$10 combos, which you mentioned earlier, being pulsed through social and CRM channels. But what is the reluctance to pivot linear TV towards these offers since it would seem to be a better medium to drive new and lapsed users than maybe targeting some of the existing users to increase frequency?
Executive: Yeah, Chris, that's a little bit of what I hit on earlier. I think you're going to see that come to life as we progress through the year. And, you know, while Linear's obviously continues to be an efficient platform, you're going to see us leaning a lot more into OTT and streaming, which allows us to be very targeted because some people, the relevant message that we're targeting might be this new group pack bundle where we've pre-configured a bundle at a compelling value to serve three or four people and we've pre-selected the flavors highlighting convenience highlighting ease but obviously the flavor and quality associated with Wingstop and they can order that with one click and so that could be the right message that we highlight in a targeted way or it could be someone who's more value sensitive and in that case we can target them with the message that profiles this lunchtime offer that we have that is pretty compelling value to get our cook to order hand sauce and toss sandwich or tender combos for under $10. So that's exactly something we're leaning into.
Analyst:
The next question comes from Sarah Senador with Bank of America. Please go ahead.
Analyst: Oh, thank you. Just I guess maybe one quick follow up and then one quick question. You mentioned the lower income consumer. I think in the past you've said that's roughly a quarter of your sales, but that maybe has been trending down. So if you could update on what that mix is, because I do think that's obviously much higher than I think what some of you have seen from others. So that's just a data point. But
the question is on value. You mentioned value for the money, which I think is obviously clearly embedded in your menu, but some of what we're seeing that is very successful, especially for lower income consumers, is very low price point value. And I think in the past, in 2023, relative value was a big part of what you were able to offer because wing prices were down so much. Is there, I know your emphasis on visibility in terms of wing prices as opposed to kind of maximizing the benefit from the recent decline, but is there an opportunity to do more price point value below that $10 or is it the margin structure just really doesn't support that? We have seen some other, you know, higher ticket concepts maybe do things on the app only to really kind of introduce people to the brand at very accessible price points just as budgets are really constrained. So just trying to understand if there is that opportunity either through the app or through your loyalty because these sort of entry-level price points do seem to be working very well right now.
Executive: Hi, Sarah. This is Alex. I can jump in first. The low-income percent still has been about that mix of about 25% within our database, and we still are acquiring low-income guests. What we have seen in their behaviors is more They're actually trading up into larger bundles. We've seen the ticket increase, but the items that they're attaching per ticket has changed. That's come down a little bit. So they're almost kind of looking for that abundance quality that we can deliver that inherent value. And I think we've said this in prior calls, too, that that consumer is still telling us we're doing the right things in terms of messaging value, delivering quality. We really think about that overall value proposition that we deliver to guests beyond just the price point. We're focused on some areas that showcase our menu differently, flavor, elicits value as well, and then loyalty is a way for us, we believe we can strengthen the value proposition. One difference that we're seeing among low-income consumers is in our market where we're testing loyalty. Their engagement, their frequency has been sustaining. We're not quite seeing what we're seeing in the rest of the U.S., and we think we've brought some areas and examples forward for them that's really showcasing that value proposition, how loyalty can come into play there.
Analyst: Great, thank you. And just, is it the 7% increase, is that roughly the same that you've been seeing in these sort of loyalty frequency as in the past?
Executive: Yeah, actually, loyalty members are outperforming non-loyalty members in terms across a number of metrics, including frequency, new guest retention. We're also seeing reactivation of lapsed users come back in at a rate of 2x non-loyalty members in there. So there's a variety of metrics which has given us that confidence in the path to growth in the second half based on this data we're seeing. But yeah, it continues to be more elevated in the pilot market.
Analyst:
The next question comes from Brian Harbor with Morgan Stanley. Please go ahead.
Analyst: Yeah, morning, guys. Could you comment on how your two biggest markets, California and Texas, are doing relative to the rest of the country?
Executive: Hey, good morning, Brian. I would say, obviously, California, I wouldn't say the trend has really improved as inflation, kind of the consumer macro backdrop has remained pretty consistent there. I would say as it relates to the Texas market, we have obviously a lot of corporate restaurants there. And so our corporate results give you a little bit of an indication. But as we look at DFW as an example, or even broader Texas, where we have had more tenure with the Smart Kitchen, those markets are performing a little bit better than the rest of the country. But I would say it's really something that we pointed to in our prepared remarks, which has to do with those restaurants that are consistently delivering on our 10-minute speed of service target, and I think that applies outside of Texas, where those restaurants that are doing that, we continue to see higher new guest retention rates, better frequency, higher guest satisfaction scores, and ultimately better same-store sales.
Analyst: Okay. So, and on Smart Kitchen... You know, I mean, it is fully rolled out at this point, right? So I guess the question is, you know, like for the earliest adopters, are you still seeing a same-store sales gap consistent with what you've talked about before? Or, you know, I guess I might conclude at a high level that customers don't really care about this yet. Like I think we understand the operational benefit in theory, but, you know, is it necessarily showing up for customers in, you know, faster delivery times, or are you seeing kind of more like walk-up business in response to this? I mean, at what point do you think it actually is more of a mover for customers?
Executive: Yeah, Brian, I would say, and we mentioned this in our prepared remarks, but, you know, we can see it in the data and, you know, we know what good looks like. And when it is delivered and we are delivering on that 10-minute speed of service, you can measure it in the results and in the data. You know, one of the things we highlighted in our prepared remarks was the kind of bottom quartile restaurants where, you know, we've really been focused on execution there and we've reduced speed by three minutes and seen some pretty meaningful improvements in guest satisfaction scores. So the guests are noticing and giving us credit for that. I would say one of the areas where the most noticeable improvement was in delivery times and guest satisfaction within the delivery channels, where we measured a 17 percentage point improvement in guest satisfaction scores in the delivery channel and that channel outperformed versus the rest of the system.
And so those are some really strong signals that we're seeing in the business and the progress we're making. But I think it's important just to highlight that this is a really big operational change and maybe bigger than we even anticipated. And one of the things we've learned as we're continuing to focus and drive execution is we have to also guard against being too fast. We're updating, you know, we talked earlier this year about the new ops scorecard that we rolled out. We're actually updating our scorecard just to make sure we're measuring performance against, you know, our targeted speed of service at 10 minutes, but we're also not rewarding the wrong behavior. But progress is being made across the board. We are getting credit from the consumer, and the opportunity in front of us, and I think the long-term impact here continues to be really big.
Analyst:
The next question comes from Danilo Gargiulio with Berenstain. Please go ahead.
Analyst: Thank you. Michael, first of all, I'd like to expand on the comment you just made on this being an operational lift of high magnitude. I guess I'm trying to understand what is the impediment for all the stores to deliver within 10 minutes, even during peak times of Friday and Saturdays? You're updating the scorecard. But I think for most operators, you know, the smart kitchen is translating into better operations. So what's the impediment on the ground for a better adherence to the high standards?
Executive: Yeah, I mean, I think Danilo, if you take a step back and think about and just remember, particularly with these more tenured restaurants and tenured team members, the change is pretty drastic to go from an operating model that relied on paper kitchen tickets and a lot of voice commands to now leveraging a technology platform interaction with the screens and ultimately relying on and leveraging an AI-enabled demands forecast bespoke to every single restaurant that's being delivered in 15-minute increments. It's a fundamental change, and I agree with your statement that it is a better team member experience, and it does result in overall improvement in operations, but it is still a big change, particularly when you think about, you know, we often reference our standard quote time of 20 minutes on average. But when you think about Friday and Saturday night when restaurants are experiencing high volume, those tickets, those speed times could be on average 45 minutes. And we've taken that down significantly. And in some cases, we're not at that 10 minute yet, but we're materially faster than we used to be.
And so it's a balance of ensuring we're executing and delivering on the speed that consumers expect, but also making sure we're not rewarding the wrong behavior or driving the wrong behavior. That could translate to some unintended consequences around being too fast. And so it is a balance and it's something we're focused on and the team is executing against a plan. And we're confident based on the data that we see and the progress that we're making that we will get the entire system to deliver on a consistent 10-minute speed of service. But it is taking time. It is taking focus. It's taking some revisions to our scorecard that I mentioned. But the progress is clear in the data that we see.
Analyst: Thank you. And, Alex, if I may, with increased uncertainty on macro, geopolitical, and even the demand environment, why is the best option to continue to do share repurchases versus maybe driving down the leverage three to four times over time in anticipation of high volatility of rates?
Executive: I think, Danelle, great question. I think as we've shared in the past, we want to demonstrate our commitment to our buyback strategy because we believe in the long-term value creation it has for shareholders. And I think what you'll see as we manage through this is not accessing near-term outside capital to support the strategy, leverage this free cash flow generation that we have in our business, and a combination of seeing some deleverage. But we do see ourselves in a place that's closer to that, you know, four times leverage range as opposed to where we've been historically in five to seven times.
Analyst:
The next question comes from Sharon Zakfia with William Blair. Please go ahead.
Analyst: Hi. I guess I wanted to delve into speed. I think you meant point in speed or execution. Maybe I messed up. Saturday nights, but can you just give us kind of broadly speaking what percent of the system is hitting the 10-minute speeds? And then I think secondarily, you had talked last quarter about some challenges with the delivery providers getting under 30 minutes. Can you talk about kind of what percent are now consistently under 30 minutes? How progress is moving? Kind of move that towards the goal line.
Executive: Hey, Sharon. You bet. You were breaking up a little bit, but I think I caught the gist of your question. As it relates to the Friday, Saturday night dinner day part, I think one of the things is obviously it's important to highlight those are two of our busiest or peak day parts within the week. But it's also the day parts where about 50% of our new guests visit the brand for the first time. And so obviously extremely important as we think about the marketing strategies that we're executing and broadening the top of the funnel and bringing in new guests that we deliver on their expectations and retain them. And so that's a big focus for us. And when we entered this year, about 30% of the restaurants were delivering on that targeted 10 minute speed of service within the Friday and Saturday dinner day part. And we've made meaningful progress on execution within our restaurants. And it's due to the incredible work of our ops team, of our brand partners, of their teams in the restaurants. And so kudos to them. But we've seen a 16 percentage point improvement just in one quarter in the number of restaurants that are delivering. And so that's meaningful progress. That's super encouraging. And we're going to continue to chip away at it. And I'm confident that we'll get the entire system there over time.
Analyst: And then I think the other part of your question Could you repeat that part again for me? I lost you at the very end of it.
Analyst: Yeah, sure. Sorry about the cell phone. On the delivery providers, I think there are some challenges getting them under 30 minutes, even when you are at 10 minutes. Can you talk about kind of where you stand at the 30-minute threshold system-wide and all those discussions and how that progress is going?
Executive: Yeah, we're really encouraged with how our partners on the third party have leaned in. We obviously have had some meetings with their leadership team. Their teams have leaned in with our teams. We've implemented a few things that are helping send the right signals to their drivers at the right time to make sure they're getting there to the restaurant when the order's ready. And we mentioned it, but we're seeing a meaningful improvement in the performance there. And we actually highlighted this within, you know, that bottom quartile of restaurants, just the improvement within the delivery channel that we're seeing there is pretty meaningful, and I think it speaks to the opportunity we have within that channel. But to see a 17 percentage point improvement in guest satisfaction within the delivery channel is pretty pronounced, and so we're encouraged by the progress we're making.
Analyst:
The next question comes from John Tower with Citi. Please go ahead.
Analyst: Great. Thanks for taking the question. I know you mentioned that protecting and growing franchisee profits and cash flows is, frankly, a priority for the company. And kind of following up to Sarah's question earlier around value, in your conversations with them, are they reluctant to move down on price points on the menu over time? I'm just curious if that's been pushback from that community specifically.
Executive: Hi, John. This is Alex. No, I think we're lockstep with our brand partners in terms of, you know, really even in this environment, protecting the unit economics. And we don't believe it's, you know, a little bit more of our perception that training a guest to come to you for a $3 menu item, as an example, is not who Wingstop is, our demand space target, that group occasion. Again, our guests have given us feedback that we're doing all the right things on overall satisfaction. We've improved quality 6% versus last year. Consideration is up 4% versus last year. And even that low-income consumer isn't saying that we have a value issue with us. So we're focused on that and really building that top of the funnel, attracting those new guests, and keeping our brand partners focused on that long-term value opportunity for Wingstop to build towards 6,000 plus restaurants in the U.S.
Analyst: Got it. And I know, Michael, you were earlier in the conversation, you had mentioned that innovation is kind of top of mind for most guests in terms of what they want to see from the brand. It sounds like you're focused primarily on flavor. I mean, any form factor changes that you're thinking about going forward?
Executive: Hey, John. Yeah, you know, it's super clear to us when we studied this, our demand space, the consumer, and who we're going after who really doesn't engage with our brand today but represents a huge opportunity for us. And, you know, our brand hits on the top emotional and functional needs of that guest and is best positioned to win. It's really about just driving awareness and then making Wingstop top of mind and relevant to them. But the number one driver for these guests we are targeting to bring into the brand is innovation and it's innovation through flavor. And this is a proven playbook for us. We go back to 2024 when we launched Hot Honey, but we launched Hot Honey when everyone else was doing it as a wet sauce. We did it the way that only Wingstop can do and did it as a dry rub. And that is a great example of how we can lean into innovation, lean into flavor and drive relevance and bring new guests into the brand. In Q1, we launched a hot honey trio, three ways to hot honey. That actually performed a lot better than we anticipated. In fact, we sold out of two of the flavors within about two weeks.
Another example I will point to is our current LTO flavor, Citrus Mojo. A lot of guests have kind of said it's a play on our iconic lemon pepper, where it's a fresh garlic herb, a bright splash of citrus. But what we're seeing with the performance of Citrus Mojo is it's over-indexing to the reactivation of lapsed guests. It's bringing in new guests. And so we have an innovation pipeline built out for the rest of the year that we're super excited about. This includes a lot of really unique flavors that only Wingstop can do, but it also includes some unique dips as well. And so we're excited about this innovation pipeline and how that's going to drive relevance and I think continue to really bring in these new guests that we're targeting.
Executive: This concludes our question and answer session and concludes our conference call today. Thank you for attending today's presentation. You may now disconnect.
Quarter 2
Q4 2025 Earnings Call — February 18, 2026
Analyst: k to achieve those times? And I had a follow-up.
Executive: Yeah, Chris, it's a great question and thank you. You know, what I would say is, and I think we mentioned it earlier, we would say, you know, if you look at it, roughly 50% of the restaurants are hitting 10 minutes. But that's us looking really at kind of daily and weekly averages. And what's super important and one of the things we've really started to lean into is it's every order. It's every guest occasion where we deliver that 10 minutes. So we're really starting to cut the data and look at it super closely. And the way we're attacking this, really, it's not anything, I would say, new for our brand. And these are some initiatives that we actually deployed in our company-owned restaurants over a year ago. One of them starts with just an operations scorecard, where we are measuring performance against this new Wingstop standard and continuing to track progress against that. And then the other thing is our brand partners as we started 2026, and they launched their new incentive comp programs for their teams. They've incorporated these metrics, which we know from history will drive the right behavior.
And so that is already having an impact as we look at just total number of orders that are delivering on a 10-minute speed of service. Just from the beginning of this year to today, we've already seen a 10 percentage point improvement. And so we're encouraged by the progress we're making, and we're focused on the execution and delivering on that 10-minute speed of service because we can see the impact of when we do and the numbers and how guests engage with our brand.
Analyst: You mentioned delivery times. We're not seeing the same level of progress as the speed of service improvements in the back of the house. Why do you think that's happening?
Executive: Hey, Chris. This is Alex. Good morning. Yeah, it's an interesting question. I think we've got really good partners with us on our delivery marketplaces. And we talked about before just the algorithms taking some time to improve. But similar to how we're measuring success with our restaurant teams, we also have some operational things we're working through with driver performance on delivery times. So we're working through that, but we've had a step down of about 15% delivery times. And to Michael's point on the improvements we've seen this year, we're also seeing those improvements in delivery times. One other data point is on our dinner day parts on Friday, Saturday night, where a majority of new guests are coming in. We're delivering about 10 minutes, about 30% of our restaurants are delivering 10-minute service times. But if you look at the delivery times of those getting under 30 minutes, you could probably cut that number in half in terms of percent of restaurants. So it speaks to the opportunity we're working on that we're laser-focused, and to Michael's point, it's all about execution this year.
Analyst:
The next question comes from Jeffrey Bernstein with Barclays. Please go ahead.
Analyst: Great. Thank you very much. My first question was just on the long-term guidance, I believe in the past you've talked about mid-single digit for the next three to five years. I know that's a moving target, but what indicators would lead you to tweak that downward? I know your long-term guidance beyond that time frame is low single digit, and that is the 2026 guidance for flat to low. So I'm just wondering, or maybe you're assuming a return to mid-single digit next year. Just wondering how you think about the framework of that currently assumed mid-single digit for the next few years. And then I had one follow-up.
Executive: Hey, Jeff. Good morning. I think clearly we've acknowledged and you've heard other brands acknowledge just the current environment we're in right now. But I would say what we're focused on this year is really things that we can control. And that's around execution, delivering a consistent 10-minute speed of service. And then as we look to the back end of Q2, the national launch of our loyalty program, which we're really excited about, and doing that in a way that we think will be best in class. And we think the combination of those two things will drive our business and allow us to return to growth, and that's what we're focused on and think that'll allow us to deliver on the outlook that we shared in our prepared remarks this morning.
Analyst: Understood. And my follow-up is just I was looking back for a second in terms of maybe some learnings from 2025. You called it a transformational year, but seemingly disappointing with the comp below your plan and maybe what you were initially targeting and obviously being the first negative in a long, long time. But if you were to look back, what do you believe were internal versus macro? Maybe what would you have done differently things that maybe were in your control? Or would you say you know what the entirety of the disappointment on comp was macro driven? Thank you.
Executive: Hey, Jeff, you know, I would say when we look at 2025, you know, we talked about it throughout the year, I think quite a bit, but we looked at really the underlying health of the brand. And we saw really strong signals there, we saw frequency holding, we saw quality and satisfaction scores increasing, you know, and we look at our dinner day part as an example, a key day part for us, it remains strong. And we did see some pockets of softness in certain day parts like lunch and snack. But, you know, we really focused on 2025 and I think what we're really proud of is in over 2,500 restaurants, we implemented something like Wingstop Smart Kitchen a new kitchen operating platform in 10 months, which is pretty remarkable. And so the effort by our brand partners, by their team, by our team is pretty remarkable. And so it could have been easy for us to really get caught up in solving for the short term, but our focus was making sure we're investing strategically and setting the business up for that next phase of growth. And as we look at 2026, that's what we're really excited about.
Analyst:
The next question comes from Christine Cho with Goldman Sachs. Please go ahead.
Analyst: Thank you so much. Really great to hear the impact of Smart Kitchen on speed of service and how guests are rewarding you for that consistency. But I'd love to learn more about how it's impacting the staff and the restaurant team specifically. I think you've previously mentioned it helps to reduce the time to train the new staff and improve staff retention. Are there any early signs or metrics you can share on how it's impacting the labor productivity in the stores? Thank you.
Executive: Hey, Christine. Good morning. You know, I think we shared a few times throughout 2025 that in our corporate-owned restaurants, we were experiencing some of the lowest turnover we've had, and I think that is a strong indication of the team members' experience with this new kitchen operating platform. Quite simply put, it provides a high degree of focus, and generally speaking, makes it easier for them to do the job we're asking them to do, to take care of our guests. And so that's been super encouraging, but it can't be taken lightly just the culture change this is for our restaurants, where we were a brand that has shifted or evolved from operating our kitchens with paper kitchen tickets to now this new technology platform. Change management and navigating that's been a big focus, but generally speaking, as I've gone out into restaurants around the country and talked to teams, the excitement and engagement with this new kitchen operating platform is really positive.
Analyst: Great. Thank you. My follow-up is related to the advertising. Could you discuss how you are assessing the performance of the new Wingstop is Here campaign? Any early indicators that you're seeing that is helping you capture kind of a larger share of everyday dining occasions and bringing kind of new guests into the brand? Thank you.
Executive: Hey, Christine. Yeah, that's a great question. And we're really encouraged by what we're seeing in our Wingstop is Here campaign. You know, we mentioned it in our prepared remarks, but this new spot we're running right now is delivering the highest brand call we've ever had on record, which is encouraging to see but you know one of the things we look at is really our digital database which gives us the most visibility and insight into our overall business into the customers and you know it's easy to kind of look past the fact if you look at 2025 and the environment we're operating in to look past the fact that our digital database grew by 20% in 2025 which is pretty remarkable and and as we look and study that data we're seeing still Gen Z being one of the highest growth cohorts that we have. And what's been really interesting and kind of when we look at this new ad campaign, quarter over quarter, we're starting to see growth emerge in other demos, such as Gen X, the highest growth being in that 50 to 100K, but we're actually seeing growth in the 100 to 150K.
And what's interesting about that cohort is they're demonstrating a frequency that's very similar to our core. So I think as I look at all of this together, I think we're really encouraged by what we see in our ad campaign and how it's working for us, but yet just highlights the opportunity we have in front of us to win our fair share of our core demand space, which also we believe will translate into an opportunity to diversify our customer base a little bit.
Analyst:
The next question comes from Brian Harbor with Morgan Stanley. Please go ahead.
Analyst: Yeah, thanks. Morning, guys. Michael, could you just elaborate on some of the leadership changes that you made and why you thought now was sort of the right time to do those?
Executive: Hey, Brian. Good morning. You know, as I take a step back and look at our business and just look at it over the last few years, the reality is our business has doubled. Whether you look at restaurant count size, system sales, EBITDA, significant growth. And as we looked at this next phase of growth in front of the brand, I would really distill this all down to really it's just us playing offense and making sure we're positioned for this next phase of growth. We have the clarity around decision making. We're unlocking the opportunities and really investing in the talent that we've hired over the last few years and setting that bench up and continuing to grow that. This new design is really around driving greater clarity around operational consistency, increasing accountability. But again, it all comes down to really just positioning the brand for this next phase of growth and our ability to execute against that.
Analyst: Okay, got it. And then on the third-party delivery platforms, what do you think will sort of further optimize the times there? And I guess secondarily... I think those guys are beta testing sort of agentic AI ordering on their platforms. Have you discussed with them how you sort of present in that scenario, how to make sure that Wingstop sort of is prioritized and still is kind of ranked highly in that situation?
Executive: Yeah, Brian, I would say I don't think anything's changed. If anything, maybe it's strengthened as it relates to our partnerships with our third-party delivery providers. And we've talked about it over the years, but they value our business. They like our business. It's good for their business. And so this is an opportunity, I think, for us to continue to grow and strengthen our businesses together, whether it's through continued innovation, as you referenced. But one of the things that's really powerful about Wingstop Smart Kitchen is it's given us a level of visibility that we didn't have before. So we know exactly when orders are prepared, when they're ready, and it's allowing us to have a little bit elevated visibility, drive accountability, and make sure that we're delivering on that guest's expectation around speed as it relates to third-party delivery. And so it's something we're going to continue to work at, and our partners are committed to improving that experience and increasing those times that guests experience. So we're pretty excited about continuing to partner with them.
Analyst:
The next question comes from Zach Battam with Wells Fargo. Please go ahead.
Analyst: Hey, good morning. On the topic of value, there was a lot of success around your 20 for 20 deal over the summer. And considering the deceleration afterwards, just curious to hear the thought process around not bringing that deal back. And with wing costs still favorable, any thoughts on leaning more into value in 2026?
Executive: Yeah, I think when we think about value, we actually look at the overall proposition. And it's not just price. It's the quality. It's the experience. It's the speed. It's delivering on the guest's expectations. And obviously, price is a component there. And I think that's where we're going to focus as we continue to scale the brand. You know, I think I mentioned earlier we did see in our business in 2025 some pockets of softness in certain day parts like lunch and snack. And there could be an opportunity targeted towards certain cohorts, towards certain day parts where we can showcase existing value on our menu today, whether that's, you know, an entry-level price point for chicken sandwich or tenders. And so I think there's some opportunity there, but I think for us, it's about winning our fair share, delivering on the total guest experience, which obviously we think quality, price, and speed are going to be in a consistent experience or elements that allow us to win.
Analyst: Got it. And then as you think through the dynamics of double-digit unit growth and comps more challenged in 25, could you walk through some of the data and KPIs that you're looking at that give you comfort that cannibalization hadn't been worse in 2025?
Executive: Hi, Zach. This is Alex. One of our approaches that really helps us guide the plan for development is these market-level playbooks that we developed that line up to our 6,000-plus restaurant target in the US. We have visibility into sales predictions and data that surrounds the restaurants. We make choices. And then we measure the result of those restaurant openings. And I think what gives us confidence to continue at the level of growth that we're seeing is the results from the restaurant openings we've had the last few years. And we haven't seen a material change versus historical trends in cannibalization. To size up for you, in 2025, it might have been 40 basis points more than what we had in prior years. And when we cut the data in 2025, 90% of the impact that we're seeing is from brand partners making strategic decisions to impact the restaurants as they fortress the market. And then when you look at the characteristics of the restaurants that were impacted, and we've talked about this before, it's typically restaurants that have higher volume or tend to be an older vintage or have maxed out capacity in the restaurants from these small boxes that they operate in. So nothing that we see that concerns us, and we're continuing to stay focused on that unit growth opportunity for Wingstop.
Analyst:
The next question comes from Sarah Senatore with Bank of America. Please go ahead.
Analyst: Oh, thank you. Just I guess I'll start with the follow up and then I'll ask the real question. You know, the comp gap between franchisees and the company, I guess it narrowed a little bit. Should I interpret that as, you know, kind of half glass half full, which is the franchisees are kind of ramping up the learning curve? I just know, you know, last quarter you saw a really wide gap and it seemed to signal kind of the building tailwind in your company stores from the smart kitchen. So, you know, anything to comment on there and then I'll ask my question.
Executive: Hey, Sarah. We appreciate the question. What I would say is, you know, there's obviously our company-owned restaurant portfolio, it is a small number of restaurants and so there can be nuances within that, whether it's little things like a fire in the back of house or some other electrical issue that could cause a restaurant to be down. We're encouraged by those results that we have in our corporate restaurants, but I think if you take a little bit of a step back and look at a broader sample like the entire DFW market, it actually outperformed our corporate restaurants, which to us continues to just be further proof points around the opportunity we have with Wingstop's Smart Kitchen. We're super excited and encouraged by the progress that we're seeing throughout the system. I referenced it earlier where over 50% of the restaurants, they're delivering an average 10 minute speed of service day in and day out, but as we start to peel it apart and look at day part specific, that's where we're focused and it really comes down to execution. And we're already seeing progress against execution in 2026. And so we're going to continue to focus on that and deliver on the guest's expectation around speed.
Analyst: Got it. Thank you. That's very helpful. And then on the loyalty question, you know, the loyalty program that you're launching, I know you mentioned it's kind of a lower frequency occasion once a month. I guess the 7% increase in frequency you saw among guests in the program, From across the restaurant industry, we hear a wide range of what joining loyalty might mean for increased frequency. Sometimes it can be much higher than that, although I don't know how sustainable it is. Would you expect that to increase further as you deploy more of the targeted marketing, that 7%? I just think about one time per month. average frequency is maybe low for traditional QSR, but perhaps more typical of fast casual. So I'm just trying to figure out how high that frequency could go and what loyalty could do for it. Thank you.
Executive: Yes, Sarah. We think loyalty is going to be an incredible driver for us as we think about frequency long-term. And we've talked about it before, but we're not trying to be overshoot here at all. Just one more visit a quarter from our average guest is a meaningful step towards that $3 million AUV target. And what we are seeing in our loyalty pilot gets us pretty excited. I mean, this pilot, it was obviously centered around testing the technology, the features, the enrollment process, but the early signals we're getting out of it have us pretty excited about what this can mean for a business long term. We have over 50% of our active guests have enrolled We're seeing the strongest level of adoption through our highest value guests. And, you know, what's really exciting for us is we're seeing over 30% of new guests signing up. This is already translating in the pilot to an improvement in retention, a slight improvement in frequency, and that's without really any national support. So as we think about additional features supporting the launch nationally, We're excited about what loyalty can mean for our business, not just for 2026 for long-term as we think about our path to $3 million AUVs.
Analyst:
The next question comes from John Tower with Citi. Please go ahead.
Analyst: Yeah, hey, thanks for taking the question. Maybe just a quick follow-up on the last point on loyalty. Are you guys embedding any sort of a headwind from an accounting standpoint related to implementing the program?
Executive: Sorry, John. Yeah, nothing material at this point to consider.
Analyst: Okay, great. Thanks. And I think one aspect maybe just to share a little bit differently from others is that, you know, we do anticipate, to Michael's point, in the build to $3 million that this will be margin accreted over time. And I think a lot of other loyalty benchmarks also include offer components that elevate maybe kind of discounting. And ours is about rewards that can be redeemed for, you know, other things such as merch and experiences and other aspects that really drive that emotional connection for the brand.
Analyst: Got it. Thank you for that. And then I guess one of the comments, Michael, you had made regarding the smart kitchens is you're starting to see more consumers kind of pivot to lunch relative to stores that don't have smart kitchen. I'm just curious, have you seen any other or any impact on mix as a result of that?
Executive: No, I wouldn't say anything to call out as it relates to mix. We're just seeing when we can deliver on that speed expectation, which it's pretty clear is associated with a lunch occasion, and do that on a consistent basis. We're seeing strength in those restaurants in that day part.
Analyst:
The next question comes from Gregory Frankfurt with Guggenheim Securities. Please go ahead.
Analyst: Hey, my question is on international. I mean, obviously a lot of openings this quarter, and I guess I'm just curious as you think about the unit growth guidance for next year, do you think international could run up kind of close to 30% store growth again, and how has the business performed either from a comp or AUV perspective recently? Thanks.
Executive: Appreciate the question about international, and it's an area of the business that we've been talking about for years, what feels like years referring to it as being supercharged for growth. And it's exciting to see that come alive in the business. And I think as it relates to your comments around unit growth for international business in 2026, I think that's a good way to think about it. Those businesses are opening really strong. We're continuing to expand and build out markets. The average unit volumes we're seeing in most of these new markets is well above what we experience here in the U.S. business. And as you can see from the excitement from our partners and the pace of development, the returns they're seeing are really strong as well. So we're encouraged by the progress we're making there and continue to see that as a really exciting long-term part of the growth story here. And I think we referenced it in our repaired remarks, but we have additional new markets coming online this year, one of those being India that we're really excited about and the potential there.
Analyst:
The next question comes from Danilo Gargiulio with Berenstain. Please go ahead.
Analyst: Great. Thank you. I wonder if you can comment how the outside Hispanic consumer viewership at the Super Bowl, maybe thanks to Bad Bunny, was impacting your customer acquisition that week. Maybe if you can give some composition of your 100K new users on that day alone. What learnings do you draw from that experience, and how do you think that's going to be informing your advertising strategy, especially during the World Cup this summer? Thank you.
Executive: Danilo, thank you for the question, and good morning. Super Bowl, we were pretty excited about what we saw in Super Bowl. It was our first Super Bowl with Wingstop Smart Kitchen deployed across the system. And pretty incredible to think we were actually able to deliver an average speed of service on that day of 20 minutes. Clearly, that's above our 10-minute target. But I can remember the days when most restaurants would turn off their digital ordering platform because demand and volume was so high. We believe we saw something pretty special. As we look at the business on that day, it was a record day of sales for our business. But we brought in over 100,000 new customers, really encouraged by what we saw in the business on that day. And I don't think it will fundamentally shift our advertising strategy as we think about 2026 or even this summer. around the World Cup, you're going to see us deploy, which we referenced in our prepared remarks, deploy this house of flavor concept in a few cities, which we think will be a great tool to continue to expand brand awareness. But we see the opportunity we have with our core demand space. It's about continuing to broaden the top of the funnel versus maybe getting more narrowly focused on a specific cohort.
Analyst: Great, and then I would like to follow up on the delivery opportunity because it sounds like you're working with a smart kitchen to control what's within your control, right? Accelerating, reducing the quote time, accelerating even just the speed of service. But there is another component of delivery which does not depend on you, right? It depends on the third-party aggregators. And so the way that you show up on aggregator platform does not fully depend on you. It might be depending also on third parties. And I'm wondering when you say, you know, we're still collaborating on third-party aggregators on how we show up on this platform, what kind of levers do you have at your disposal to make sure that the brand, you know, is a little more relevant for a consumer who's actually just searching for wings or more broadly in the category? Thank you.
Executive: Hey, Danilo. Yeah, that's a good question. And, you know, that's part of our strategy as we partner with the marketplaces is to talk about how we – invest together on advertising their platforms. You can almost think about them as a different vehicle to drive awareness. And so when we're each month, each week, we're talking about different ways to elevate Wingstop visibility. And so Michael's earlier points on the call today, you know, they're highly motivated to invest behind Wingstop and grow our business because of the characteristics of our transaction. And so we have a lot of those partnership conversations as we go through the year to ensure that we're getting the elevated visibility in the platform through banners or listings or areas like that.
Analyst:
The next question comes from Andy Barish with Jefferies. Please go ahead.
Analyst: Yeah, hey, guys. I wanted to circle back and double-click on the international side of things. Just a quick a kind of refresher on what's changed sort of in your strategy in entering new markets and any information on the partner in India that you guys may have put out at this point?
Executive: Andy, I would say as it relates to international and our new market entry playbook, I would say it's something that We really started to hone in and dial in within the UK and our entry there, and it's been something we've continued to refine and build on, and we continue to see it strengthen as each new market comes online. And the demand and the acceptance and the relevance of the brand that we're seeing with consumers around the world is pretty remarkable. We referenced in our prepared remarks the house of flavor that we popped up in Milan. to prepare for that new market entry here in a couple months. And the receptiveness of a market that is really known for being critical about food is the way I'll describe it. The receptiveness is remarkable. The demand, the number of people we've served there is super exciting. To just showcase that, the portability of the brand and the strategy that we're executing. And so you're going to see us continue to lean into that. It's working, and we're encouraged by what we see in each new market that we open. As it relates to India, we haven't really disclosed specifically who that partner is, and we'll get into that, but it's someone that we know very well and has proven and excited about bringing Wingstop to the India market, which we mentioned on our prepared remarks is an opportunity that represents over 1,000 restaurants.
Analyst:
The next question comes from Peter Silla with VTIG. Please go ahead.
Analyst: Great. Thanks for taking the question. I guess my first question, you know, operationally with the Smart Kitchen, do you feel like you need to have consistent 10-minute ticket times to feel comfortable to launch the loyalty program at the end of 2Q? I just worry if you launch the loyalty program and you have all this demand coming through, if you're not ready operationally. So just thoughts on that would be helpful.
Executive: Peter, I might answer your question a little differently, and that is I am highly confident based on the level of focus from our brand partners, the level of focus from Raj's team, the level of focus from our teams that we will be at a consistent 10-minute speed of service as we progress through the year. And so it really doesn't have anything to do with or doesn't influence how we're thinking about loyalty. That execution is something that's within our control, and I'm confident we will deliver on that. The launch of loyalty is really around the opportunity we see, a lever we've known for years that we've had to pull. And it does have to do with the fact that we know that consumers want this. They've told us that they want loyalty with Wingstop, but we're able to do it in a very differentiated way. And clearly, delivering on consumer expectations around speed and consistency is just going to be a further catalyst to what loyalty can do for our business long term.
Analyst: Great. And then just lastly, can you talk a little bit about maybe how, once you get to the 10-minute speed of service and you're comfortable, how do you communicate that faster speed of service to the consumer? Is there a way to do that, or do you just let this happen organically? Thank you.
Executive: Hey, Peter. It's really a bit of both. And it's kind of what we're seeing in our restaurants that are consistently operating at 10-minute service times. We are seeing that organic change in how the guests engage with us, whether you look at new guest retention, frequency, the delta and same-store sales performance. All those factors have come into play without us communicating differently. Michael also mentioned some opportunities just as we talk about the overall value proposition for the guests. And I think there's examples at a lunch or late-night day part where we can bring forward these compelling entry points into the brand with chicken sandwich or tenders. But they'll also, in a day part, that speed expectations are much different than dinner. And so we think the combination of those two and how we bring forward these menu items will be an opportunity to showcase our speed as well.
Executive: This concludes our question and answer session and concludes the conference call today. Thank you for attending today's presentation. You may now disconnect.