Q2 2024 Wingstop Inc Earnings Call

Operator: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Wingstop fiscal 2nd quarter of 2024 earnings conference call.

Okay.

Operator: And thank you for standing by. Welcome to the Wingstop fiscal second quarter 2024 earnings conference call. All participants will be in listen-only mode.

Speaker Change: Well, thank you for standing by welcome to the St.

Speaker Change: Fiscal second quarter earnings conference call all participants.

Operator: A participant will be in less than a minute.

Operator: Shouldn't it assistance please signal a conference specialist by pressing the start key followed by zero?

Operator: Should you need assistance, please signal a consultancy specialist by pressing the star key followed by zero. Please note that this conference is being recorded today, Wednesday, July 31st, 2024. On the couch today are Michael Skipworth, President and Chief Executive Officer, and Alex Kaleida, Senior Vice President and Chief Financial Officer. I would now like to turn the conference over to Alex. Please go ahead.

Speaker Change: She didn't need assistance, you know a core group of specialists by pressing the star key followed by zero.

Operator: Please note that this conference has been recorded today. When they to like to disperse 2024.

Speaker Change: Well that this conference is being recorded today Wednesday July 31st 2024.

Operator: On the call to be are Michael Skipworth, President and Chief Executive Officer; Alex Kaleida, Senior Vice President and Chief Financial Officer.

Michael A. Tamas: Culturally our Michaels kit for President and Chief Executive Officer, Alex Collider.

Alex R. Kaleida: Our vice President and Chief Financial Officer, I would now like to turn the conference I'll, Let you Alex. Please go ahead.

Alex Kaleida: I would now like to turn the conference over to Alex. Please go ahead.

Alex Kaleida: Thank you and welcome to the fiscal 2nd quarter 2024 earnings conference call for Wingstop. Our results were published earlier this morning and are available on our Investor Relations website at ir.wingstop.com. Our discussion today includes forward-looking statements. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties that could cause our actual results to differ materially from what we currently expect. RSEC finally described various risks that could affect our future operating results in financial condition. We use certain non-GAAP financial measures that we believe can be useful in evaluating our performance. Presentation of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Alex R. Kaleida: Thank you, and welcome to the fiscal second quarter 2024 earnings conference call for Wingsop. Our results were published earlier this morning and are available on our investor relations website at ir.wingsop.com. Our discussion today includes forward-looking statements, which are not guarantees of future performance and are subject to numerous risks and uncertainties that could cause our actual results to differ materially from what we currently expect.

Alex R. Kaleida: Thank you and welcome to the fiscal second quarter 2024 earnings conference call for Wingstop are.

Speaker Change: Our results were published earlier this morning and are available on our Investor Relations website at IR Dot Wingstop Dot com.

Speaker Change: The discussion today includes forward looking statements. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties that could cause our actual results to differ materially from what we currently expect.

Alex R. Kaleida: Our SEC filings describe various risks that could affect our future operating results and financial conditions. We use certain on-gap financial measures that we believe can be useful in evaluating our performance. However, presentation of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Alex R. Kaleida: Our SEC filings describe various risks that could affect our future operating results and financial condition.

Alex R. Kaleida: We use certain non-GAAP financial measures that we believe can be useful in evaluating our performance.

Alex R. Kaleida: Presentation of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Alex Kaleida: Reconciliation is a comparable GAP measures are contained in our earnings release.

Michael A. Tamas: Reconciliations of comparable GAAP measures are contained in our earnings release.

Alex Kaleida: Lastly, for the Q&A session, we ask that you please each keep the one question in a follow-up to allow as many participants as possible to ask a question.

Speaker Change: Lastly for the Q&A session. We ask that you. Please each keep to one question and a follow up to allow as many participants as possible to ask a question.

Alex R. Kaleida: Reconciliations and Comparable Gap Measures are contained in our earnings release. Lastly, for the Q&A session, we ask that you please each keep the one question in a follow-up to allow as many participants as possible to ask a question. With that, I would like to turn the call over to Michael.

Michael Skipworth: With that, I would like to turn the call over to Michael.

Speaker Change: With that I would like to turn the call over to Mike.

Michael Skipworth: Thank you, Alex, and good morning, everyone. Our 2nd quarter results were truly remarkable. I want to start by recognizing the incredible work by the entire Wingstop team. Teamers in the restaurant and in the Global Support Center are brand partners in our supplier partners. Their relentless focus on executing our long-term strategy and living the Wingstop way has delivered another industry-leading quarter. In the 2nd quarter, we delivered 28.7% same-store sales growth, which was almost entirely driven by transaction growth. This sustained top-line growth continues to strengthen our unit economics and is increasing demand for growth from our brand partners as our development pipeline strengthens.

Michael J. Skipworth: Thank you, Alex, and good morning, everyone. Our second quarter results were truly remarkable. I want to start by recognizing the incredible work by the entire Wingstop team, team members in the restaurant and in the Global Support Center, our brand partners, and our supplier partners. Their relentless focus on executing our long-term strategy and living the Wingstop way has delivered another industry-leading quarter. In the second quarter, we delivered 28.7% same-store sales growth, which was almost entirely driven by transaction growth. This sustained top-line growth continues to strengthen our unit economics and is increasing demand for growth from our brand partners as our development pipeline strengthens. We opened 73 net new restaurants, a record Q2.

Mike: Thank you Alex and good morning, everyone.

Mike: Our second quarter results were truly remarkable I wanted to start by recognizing the incredible work by the entire Wingstop team.

Mike: He mentioned the restaurant and in the global support Center, our brand partners and our supplier partners their relentless focus on executing our long term strategy and living the Wingstop way has delivered another industry leading quarter.

Mike: In the second quarter, we delivered 28.7% same store sales growth.

Mike: Which was almost entirely driven by transaction growth.

Mike: This sustained top line growth continues to strengthen our unit economics.

Mike: And is increasing demand for growth from our brand partners as our development pipeline strengthen.

Michael Skipworth: We opened 73 net new restaurants, a record Q2, and we delivered adjusted EBITDA of $51.8 million, representing a 50.7% growth rate over the prior year. I am truly humbled to be part of a brand that is experiencing such unprecedented growth.

Mike: We opened 73 net new restaurants, a record Q2.

Mike: And we delivered adjusted EBITDA of $51.8 million, representing a 50.7% growth rate over the prior year.

Michael J. Skipworth: And we delivered adjusted EBITDA of $51.8 million, representing a 50.7% growth rate over the prior year. I am truly humbled to be part of a brand that is experiencing such unprecedented growth. Earlier this month, we celebrated our 30th anniversary. The first Wingstop opened in Dallas, which began our journey pioneering wings as a center of the plate mill occasion.

Speaker Change: I am truly humbled to be part of a brand that is experiencing such unprecedented growth.

Michael Skipworth: Earlier this month, we celebrated our 30th anniversary. The first Wingstop opened in Dallas, which began our journey pioneering wings as a center of the plate millication. Over the last 30 years, not a lot has changed with our brand. We added boneless wings, tenders, and the chicken sandwich, and we have remained focused on our simple operating model and delivering guests that indulgent Wingstop occasion that is centered around quality cooked-to-order wings, soft and tossed in our bold, distinctive flavors. That original Wingstop remains open today, doing roughly $4 million in sales out of that simple, efficient footprint and is still experiencing transaction growth 30 years later.

Mike: Earlier this month, we celebrated our 30th anniversary.

Mike: The first Wingstop opened in Dallas, which began our journey pioneering ways as the center of the plate mill occasion.

Michael J. Skipworth: Over the last 30 years, not a lot has changed with our brand. We added boneless wings, tenders, and the chicken sandwich. And we have remained focused on our simple operating model and delivering guests that indulgent Wingstop occasion that is centered around quality, cook-to-order wings sauced and tossed in our bold, distinctive flavors. That original Wingstop remains open today, doing roughly $4 million in sales out of that simple, efficient footprint and is still experiencing transaction growth 30 years later. Well, we have a lot to celebrate and be proud of over the past three decades.

Speaker Change: Over the last 30 years not a lot has changed with our brands. We added boneless wings tenders and the chicken sandwich and we have remained focused on our simple operating model and delivering gets that indulgent wingstop occasion that is centered around quality cooked to order wings soft end.

Speaker Change: Tossed in our bold distinctive flavors that original Wingstop remain open today doing roughly $4 million and sells out of that simple efficient footprint and its still experiencing transaction growth 30 years later.

Michael Skipworth: While we have a lot to celebrate and be proud of over the past three decades, I can confidently say that we are just getting started here at Wingstop. A little over two years ago at our investor day, and shortly after assuming the role at CDO, we outlined several multi-year strategies that supported Wingstop's category of one positioning and AUV growth from the dense system average of $1.5 million to a target of $2 million. These are the same strategies we are executing against today that consist of scaling brand awareness, media innovation, expanding our delivery channel, data-driven marketing, and our digital transformation.

Speaker Change: Well, we have a lot to celebrate and be proud of over the past three decades I can confidently say that we are just getting started here at wingstop.

Michael J. Skipworth: I can confidently say that we are just getting started here at Wingstop. A little over two years ago, at our Investor Day, and shortly after assuming the role as CEO, we outlined several multi-year strategies that supported Wingstop's Category of One positioning and AUV growth from the then system average of $1.5 million to a target of $2 million. These are the same strategies we are executing against today that consist of scaling brand awareness, new innovation, expanding our delivery channel, data-driven marketing, and our digital transformation.

Speaker Change: A little over two years ago at our Investor day, and shortly after assuming the role as CEO, we outlined several multiyear strategies that supported Wingstop category of one positioning in <unk> growth from the than system average of $1.5 million to a target of $2 million.

Speaker Change: These are the thing and strategies, we are executing against today that consist of scaling brand awareness menu innovation, expanding our delivery channel data driven marketing and our digital transformation.

Michael Skipworth: We were confident that our multi-year strategies would lead to strengthen returns for our brand partners, which in turn would create significant demand for growth. Fast forward to today, just two years later, and our AUVs are now above $2 million. Yet, as we look at the success of these strategies we are executing against, we see meaningful runway in front of us. I can sit here today with the same level of confidence in these sustaining sales strategies as I did two years ago at our Investor Day.

Michael J. Skipworth: We were confident that our multi-year strategies would lead to strengthened returns for our brand partners, which would, in turn, create significant demand for growth. Fast forward to today, just two years later, and our AUVs are now above $2 million.

Speaker Change: We were confident that our multiyear strategies would lead to strengthen returns for our brand partners, which in turn would create significant demand for growth.

Speaker Change: Fast forward to today just shift gears later and are a these are now above $2 million yet as we look at the success of these strategies, we are executing against we see meaningful runway in front of us.

Michael J. Skipworth: Yet, as we look at the success of these strategies we are executing against, we see meaningful runway in front of us. I can sit here today with the same level of confidence in these sustaining sales strategies as I did two years ago at our Investor Day. And this is what gives us confidence to announce today a new AUV target of $3 million. Brand awareness is a great example of a strategy we see sustaining same-store sales growth.

Speaker Change: I can sit here today with the same level of confidence in these sustaining sales strategy as I did two years ago at our Investor Day, and this is what gives us confidence to announce today.

Michael Skipworth: And this is what gives us confidence to announce today a new AUV target of $3 million. Brand awareness is a great example of a strategy we see sustaining same-store sales growth. We are making great progress in scaling brand awareness as we work towards closing the gap in awareness to more mature national brands, but our opportunity remains meaningful. In 2024, we have been delivering more than 20% same-store sales growth, but yet we have only moved brand awareness by a couple of percentage points year over year. The impact from closing this gap is significant. During the quarter, system-wide sales grew by 45%, which delivers additional firepower in our advertising fund, which allows us to invest meaningful dollars to expand brand awareness.

Speaker Change: New <unk> target of $3 million.

Speaker Change: Brand awareness is a great example of our strategy, we see sustaining same store sales growth, we are making great progress in scaling brand awareness as we work towards closing the gap and awareness to more mature national brands, but our opportunity remains meaningful.

Michael J. Skipworth: We are making great progress in scaling brand awareness as we work towards closing the gap in awareness to more mature national brands, but our opportunity remains meaningful. In 2024, we are delivering more than 20% same-source sales growth, but yet we have only moved brand awareness by a couple of percentage points year over year. The impact of closing this gap is significant.

Speaker Change: In 'twenty 'twenty four we have been delivering more than 20% same store sales growth, but yet we have only moved brand awareness by a couple of percentage points year over year the impact from closing this gap is significant.

Michael J. Skipworth: During the quarter, system-wide sales grew by 45%, which delivers additional firepower to our advertising fund, which allows us to invest meaningful dollars to expand brand awareness. To provide some perspective, the growth in system sales over the past couple of years has fueled a media investment in 2024 that is double what we invested in 2022. Our media strategy focused on live sports and a very targeted approach to streaming and online video placement, combined with breakthrough creative, has proven to be highly effective.

Speaker Change: During the quarter system wide sales grew by 45%, which delivers additional firepower in our advertising fund, which allows us to invest meaningful dollars to expand brand awareness.

Michael Skipworth: To provide some perspective, the growth in system sales over the past couple of years has fueled a media investment in 2024 that is double what we invested in 2022. Our media strategy focused on live sports and a very targeted approach in streaming an online video placement combined with breakthrough creatives has proven to be highly effective. We continue to measure strong levels in value and quality scores as our brand partners and team members are focused on operational excellence and delivering a great guest experience. Our discipline approach to menu pricing over the years is pain-dividends. The consumer is continuing to prioritize quality and value when deciding how to spend their discretionary dollars.

Speaker Change: To provide some perspective the growth in system sales over the past couple of years has fueled our media investment in 'twenty 'twenty four that is double what we invested in 2022.

Speaker Change: Our media strategy focused on live sports and a very targeted approach and streaming and online video placement combined with breakthrough creative has proven to be highly effective.

Michael J. Skipworth: We continue to measure strong levels in value and quality scores, as our brand partners and team members are focused on operational excellence and delivering a great guest experience. Our disciplined approach to menu pricing over the years is paying dividends. The consumer is continuing to prioritize quality and value when deciding how to spend their discretionary balance. We believe that Indulgent Wingstop Occasion delivers on both value and quality and has us uniquely positioned, which is evident in our second quarter results, where our 28.7% comp was almost entirely driven by transaction growth.

Speaker Change: We continue to measure strong levels in value and quality scores as our brand partners and team members are focused on operational excellence.

Speaker Change: And delivering a great guest experience.

Speaker Change: Our disciplined approach to menu pricing over the years is paying dividends.

Speaker Change: The consumer is continuing to prioritize quality and value when deciding how to spend their discretionary dollars. We believe that indulgent wingstop occasion delivers upon both value and quality and has us uniquely positioned which is evident in our second quarter results, where our 28 point.

Michael Skipworth: There's a pond both value and quality and has us uniquely positioned, which is evident in our second quarter results where our 28.7% comp was almost entirely driven by transaction growth. Our menu innovation with our chicken sandwich is attracting a new guest into the brand who is experiencing our quality and flavor for the first time, which has made Wingstop unique over the years and what's driving an incredible stickiness with this new guest. While we continue to see growth in our chicken sandwich guests, we still haven't come anywhere close to reaching our fair share of the 2.8 billion chicken sandwich servings annually in the US.

Speaker Change: 7% comp was almost entirely driven by transaction growth.

Michael J. Skipworth: Our menu innovation with our chicken sandwich is attracting new guests into the brand who are experiencing our quality and flavor for the first time, which has made Wingstop unique over the years and what's driving an incredible stickiness with this new guest.

Speaker Change: Our menu innovation with our chicken sandwiches, attracting a new guests into the brand who is experienced in our quality and flavor for the first time, which has made wingstop unique over the years and what's driving an incredible stickiness with this new guests.

Michael J. Skipworth: While we continue to see growth in our chicken sandwich guests, we still haven't come anywhere close to reaching our fair share of the 2.8 billion chicken sandwich servings annually in the U.S. What excites me the most about this new guest is they're demonstrating higher frequency than our traditional guests and index higher on BOMAS. These guests are moving up the frequency curve faster than what we've witnessed before. For the first time in my 10 years at Wingstop, we're beginning to see frequency tick up. Digital sales for the second quarter represented 68.3% of sales, and our database now stands at over 45 million users strong.

Speaker Change: While we continue to see growth in our chicken Sandwich guess, we still haven't come anywhere close to reaching our fair share of the $2 8 billion chicken sandwich serbians annually in the U S.

Michael Skipworth: What excites me the most about this new guest is their demonstrating a higher frequency than our traditional guest and index higher on bonus. These guests are moving up the frequency curve faster than what we've witnessed before. For the first time in my 10 years at Wingstop, we're beginning to see frequency tick upwards. Digital sales for the second quarter represented 68.3% of sales in our database now stands at over 45 million users strong. We have been investing in the technology and data to enrich our digital guest profiles and optimize our engagement with our digital guests. We recently completed the rollout of our My Wingstop platform in Q2, migrating more than $2.5 billion of digital sales through our platform.

Speaker Change: What excites me the most about this new guests is they're demonstrating a higher frequency than our traditional guests and index higher on boneless. These.

Speaker Change: These guests are moving up the frequency curve faster than what we've witnessed before for.

Speaker Change: For the first time in my 10 years at Wingstop, we're beginning to see frequency tick upwards.

Speaker Change: Digital sales for the second quarter represented 68, 3% of sales in our database now stands at over 45 million users strong.

Michael J. Skipworth: We have been investing in technology and data to enrich our digital guest profiles and optimize our engagement with our digital guests. We recently completed the rollout of our MyWingstop platform in Q2, migrating more than $2.5 billion of digital sales through our platform. I couldn't be prouder of what the team accomplished, and I believe we executed a best-in-class rollout. My Wingstop is our proprietary tech platform that we started building over three years ago and invested nearly $60 million in. It is a platform that is built for Wingstop with the most modern technology and allows us to more quickly adapt to changing consumer needs.

Speaker Change: We have been investing in the technology and data to enrich our digital guest profiles and optimize our engagement with our digital guests. We recently completed the rollout of our my Wingstop platform in Q2 migrating more than $2.5 billion of digital sells through.

Speaker Change: Our platform.

Michael Skipworth: I couldn't be prouder of what the team accomplished, and I believe we executed a best in class rollout. My Wingstop is our proprietary tech platform that we started building over three years ago and invested nearly $60 million. It is a platform that is built for Wingstop with the most modern technology and allows us to more quickly adapt to changing consumer needs. While early, we are very excited about the long term impact my Wingstop will have on our digital business. With the launch of my Wingstop, we believe we can unlock a new level of hyper-personalization that can allow us to increase conversion rates and frequency.

Speaker Change: I couldn't be prouder of what the team accomplished and I believe we executed a best in class rollout.

Speaker Change: My Wingstop is our proprietary tech platform that we started building over three years ago and invested nearly $60 million. It is a platform that is built for wingstop with the most modern technology and allows us to more quickly adapt to changing consumer needs.

Michael J. Skipworth: While it is early, we are very excited about the long-term impact My Wingstop will have on our digital business. And with the launch of My Wingstop, we believe we can unlock a new level of hyper-personalization that can allow us to increase conversion rates and frequency. This is something we view as a multi-year sales driver as we continue to execute against our aspirational goal of digitizing 100% of our business. Delivery occasions remain another core tenet of our strategy to sustain sales.

Speaker Change: All early we are very excited about the long term impact my Wingstop will have on our digital business.

Speaker Change: And with the launch of my Wingstop, We believe we can unlock a new level of hyper personalization that can allow us to increase conversion rates and frequency.

Michael Skipworth: Something we view as a multi-year sales driver as we continue to execute against our aspirational goal of digitizing 100% of our business. Delivery occasions remain another core tenant of our strategy to sustain sales growth. We continue to see transaction growth in both DoorDash and UberEats and have a lot of white space in our delivery channel as we reach more consumers within their platforms. We view this as an opportunity to make Wingstop more top of mind and fill the top of the funnel with new guests. It's truly been remarkable to see these multi-year sales growth levers in action.

Speaker Change: We view as a multi yourselves driver as we continue to execute against our aspirational goal of digitizing, 100% of our business.

Speaker Change: Delivery occasions remain another core tenet of our strategy to sustain sales growth.

Michael J. Skipworth: We continue to see transaction growth in both DoorDash and Uber Eats and have a lot of white space in our delivery channel as we reach more consumers within their platform. We view this as an opportunity to make Wingstop more top of mind and fill the top of the funnel with new guests. It's truly been remarkable to see these multi-year sales growth levers in action. While we have made great progress, I'm energized by the amount of growth that lies ahead of us.

Speaker Change: We continue to see transaction growth in both door dash and Uber eats and have a lot of white space in our delivery channel as we reach more consumers within their platforms.

Speaker Change: We view this as an opportunity to make wingstop more top of mind and fill the top of the funnel with new guests.

Speaker Change: Yes.

Speaker Change: It's truly been remarkable to see these multi year sales growth levers inaction.

Michael Skipworth: While we have made great progress, I'm energized by the amount of growth that lies ahead of us. When you combine this with the team's consistent execution, it gives us confidence in our ability to scale AVs to our new target of $3 million.

Speaker Change: While we have made great progress I'm energized by the amount of growth that lies ahead of us.

Michael J. Skipworth: When you combine this with the team's consistent execution, it gives us confidence in our ability to scale ADVs to our new target of $3 million. Based on the strength we see in the business and the effectiveness of our strategies, we are raising our comp guidance for 2024 to approximately 20%, setting us up for our 21st consecutive year of same-store sales growth, further demonstrating that Wingstop is operating in a category of one.

Speaker Change: When you combine this with the teams consistent execution it gives us confidence in our ability to scale.

Speaker Change: <unk> to our new target of $3 million.

Michael Skipworth: Based on the strength we see in the business and the effectiveness of our strategies, we are raising our comp guidance for 2024 to approximately 20%. Setting us up for our 21st consecutive year of same-store sales growth, further demonstrating that Wingstop is operating in a category of one. The combination of our AUV growth and strengthening unit economics is fueling a record pace of development. In the last 12 months, we have opened more than 300 net new restaurants, showcasing the excitement of our brand partners to open more Wingstop. It is important to note that over 95% of our restaurants were opened by existing brand partners reinvesting.

Speaker Change: Based on the strength, we see in the business and the effectiveness of our strategies, we are raising our comp guidance for 'twenty 'twenty four to approximately 20%.

Speaker Change: Setting us up for our 21st consecutive year of same store sales growth.

Speaker Change: Further demonstrating that Wingstop is operating in a category of one.

Michael J. Skipworth: The combination of our AUV growth and strengthening unit economics is fueling a record pace of development. In the last 12 months, we have opened more than 300 net new restaurants, showcasing the excitement of our brand partners to open more Wingstop. And it is important to note that over 95% of our restaurants were opened by existing brand partners reinvesting. Our pipeline for future restaurant commitments is the strongest it's ever been.

Speaker Change: The combination of our AUC growth and strengthening unit economics is fueling a record pace of development.

Speaker Change: In the last 12 months, we have opened more than 300, net new restaurants, showcasing the excitement of our brand partners to open more wingstop.

Speaker Change: And it is important to note that over 95% of our restaurants were opened by existing brand partners reinvesting.

Michael Skipworth: Our pipeline for future restaurant commitments is the strongest it's ever been. Our brand partners are enjoying industry-leading, unlevered cash-on-cash returns of more than 70%, which has fueled significant demand for growth. As this demand for growth has taken shape in our new restaurant pipeline, we are increasing our outlook to a range of 285 to 300 net new restaurants for 2024.

Speaker Change: Our pipeline for future restaurant commitments, it's the strongest it's ever been.

Michael J. Skipworth: Our brand partners are enjoying industry-leading unlevered cash-on-cash returns of more than 70 percent, which has fueled significant demand for growth. As this demand for growth takes shape in our new restaurant pipeline, we are increasing our outlook to a range of 285 to 300 net new restaurants for 2024. As we have scaled the brand in a meaningful way over the past couple of years, continued to bring record levels of new guests, and further expanded our restaurant footprint, we have taken a hard look at the unit opportunity we have in front of us. We re-evaluated our total addressable market in the U.S. through a combination of a top-down and bottoms-up build from a trade area-specific standpoint.

Speaker Change: Our brand partners are enjoying industry, leading unlevered cash on cash returns of more than 70%, which has fueled significant demand for grow.

Speaker Change: As this demand for growth has taken shape and our new restaurant pipeline, we are increasing our outlook to a range of 285 to 300 net new restaurants for 2024.

Michael Skipworth: As we have scaled the brand in a meaningful way over the past couple of years, we continue to bring record levels of new guests and further expand our restaurant footprint. We have taken a hard look at the unit opportunity we have in front of us domestically. We re-evaluated our total addressable market in the US through a combination of a top-down and bottoms-up build from a trade area-specific standpoint. This work has led to refreshed market plans and playbooks, and I'd like to announce an updated unit potential in the US. We now believe we can support over 6,000 restaurants domestically, more than tripling our current U.S. footprint.

Speaker Change: As we have scaled the brand in a meaningful way over the past couple of years continue to bring in record levels of new guests and further expand our restaurant footprint. We have taken a hard look at the unit opportunity we have in front of us domestically.

Speaker Change: We reevaluated, our total addressable market in the U S through a combination of a top down and bottoms up build from a trade area specific standpoint.

Michael J. Skipworth: This work has led to refreshed market plans and playbooks, and I'd like to announce an updated unit potential in the U.S. We now believe we can support over 6,000 restaurants domestically, more than tripling our current U.S. book When you combine this with our opportunity outside of the U.S. and the early success we're having in markets from the Asia-Pacific region, to Western Europe, to North America, We believe we can scale Wingstop to more than 10,000 restaurants globally.

Speaker Change: This work has led to refreshed market plans and Playbooks.

Speaker Change: And I'd like to announce an updated unit potential in the U S.

Speaker Change: Now believe we can support over 6000 restaurants domestically more than tripling, our current U S footprint.

Michael Skipworth: When you combine this with our opportunity outside of the US and the early success we're having in markets from the Asian Pacific region to Western Europe to North America, we believe we can scale wings up to more than 10,000 restaurants globally. Similar to the US, we are seeing double-digit same-store sales growth trends, which is primarily driven by transaction growth. Our international AUV growth have grown more than 82% in the last two years. We have a clear playbook for our international markets, and I believe our international business is supercharged for growth. We remain anchored in the foundation of our strategy, investing in our people and our culture, what we refer to as the Wingstop Way.

Speaker Change: When you combine this with our opportunity outside of the U S and the early success, we're having in markets from the Asia Pacific region to Western Europe, and North America.

Speaker Change: We believe we can scale wingstop to more than 10000 restaurants globally.

Michael J. Skipworth: Similar to the U.S., we are seeing double-digit same-source sales growth trends, which is primarily driven by transaction growth. Our international AUV growth has grown more than 82% in the last two years. We have a clear playbook for our international markets, and I believe our international business is supercharged for growth. We remain anchored in the foundation of our strategy, investing in our people and our culture, what we refer to as the Wingstop way.

Speaker Change: Similar to the U S. We are seeing double digit same store sales growth trends, which is primarily driven by transaction growth.

Speaker Change: Our international <unk> growth have grown more than 82% in the last two years, we have a clear playbook for our international markets and I believe our international business is supercharged for growth.

Speaker Change: We remain anchored in the foundation of our strategy investing in our people and our culture, what we referred to as the Wingstop way.

Michael Skipworth: We view our people and our culture as a competitive advantage. As we look towards Wingstop's opportunity to scale globally, we believe we have a clear line of sight to scaling Wingstop into a top 10 global restaurant brand.

Michael J. Skipworth: We view our people and our culture as a competitive advantage. As we look towards Wingstop's opportunity to scale globally, we believe we have a clear line of sight to scaling Wingstop into a top 10 global restaurant. It is an incredibly exciting time at Wingstop. With that, I'd like to turn the call over to Alex.

Speaker Change: We view, our people and our culture as a competitive advantage.

Speaker Change: As we look towards Wingstop opportunity to scale globally. We believe we have clear line of sight to scaling wingstop into a top 10 global restaurant brand. It is an incredibly exciting time at Wingstop.

Michael Skipworth: It is an incredibly exciting time at Wingstop.

Alex Kaleida: With that, I'd like to turn the call over to Alex.

Speaker Change: With that I'd like to turn the call over to Alex.

Alex Kaleida: Thank you, Michael. I could not be more excited by the first half performance we've had at Wingstop. Our second quarter results showcase the resiliency of our proven strategies and further solidify Wingstop's category of one position. In the second quarter, our domestic AUV exceeded our prior target of $2 million. And as Michael mentioned, the multi-year strategies we are executing against positioned us to reach a new $3 million AUV target. The AUV growth in Q2 was fueled by a 28.7% increase in domestic same-source sales, primarily driven by transaction growth, which is truly remarkable considering the industry backdrop.

Alex R. Kaleida: Thank you Michael.

Alex R. Kaleida: Thank you, Michael. I could not be more excited by the first half performance we had at Wingstop. Our second quarter results showcase the resiliency of our proven strategies and further solidify Wingstop's category of one position. In the second quarter, our domestic AUV exceeded our prior target of $2 million. And, as Michael mentioned, the multi-year strategies we are executing against position us to reach a new $3 million AUV target. The AUV growth in Q2 was fueled by a 28.7% increase in domestic same-source sales, primarily driven by transaction growth, which is truly remarkable considering the industry backdrop.

Alex R. Kaleida: I cannot be more excited by the first half performance we've had at Wingstop, our second quarter results showcase the resiliency of our proven strategies and further solidify wingstop category of one position.

Alex R. Kaleida: In the second quarter, our domestic <unk> exceeded our prior target of $2 million and as Michael mentioned, the multiyear strategies, we are executing against position us to reach a new $3 million <unk> target.

Michael: The EV growth in Q2 was fueled by 28, 7% increase in domestic same store sales, primarily driven by transaction growth.

Michael: Which is truly remarkable considering the industry backdrop.

Alex Kaleida: We delivered 45.2% growth and system-wide sales in the second quarter, which is fueling and creating a flywheel for our advertising fund as we chip away at our opportunity in brand awareness. Our best-in-class unit economics have further strengthened in the quarter, creating more demand from our brand partners, open more Wingstop's, and our development pipeline sits at a record level today. We open 73 net new units, achieving a record for Q2, which follows the record set in the prior three quarters. And while not fully annualized yet, our new restaurant AUVs for our 2023 vintage are now approaching $1.6 million in year one, with 2024 advantages on a pace that's even stronger.

Alex R. Kaleida: We delivered 45.2% growth in system-wide sales during the second quarter, which is fueling and creating a flywheel for our advertising fund as we chip away at our opportunity and brand awareness. Our best-in-class unit economics have further strengthened in the quarter, creating more demand from our brand partners to open more Wingstops, and our development pipeline sits at a record level today. We opened 73 net new units, achieving a record for Q2, which follows records set in the prior three quarters.

Speaker Change: We delivered 45, 2% growth in system wide sales in the second quarter, which is fueling and creating a flywheel for our advertising fund as we chip away at our opportunity in brand awareness.

Michael: Our best in Class unit economics are further strengthened in the quarter, creating more demand from our brand partners to open more wingstop.

Alex R. Kaleida: In our development pipeline sits at a record level today.

Alex R. Kaleida: We opened 73 net new units achieving a record for Q2, which follows record set in the prior three quarters.

Alex R. Kaleida: And while not fully annualized yet, our new restaurant AUVs for our 2023 vintage are now approaching $1.6 million in year one, with our 2024 vintages on a pace that's even stronger. The visibility we have into our pipeline gives us the confidence to raise our development outlook to a range of 285 to 300 net new restaurants. Total revenue increased 45.3% versus the prior year to $155.7 million. Royalty revenues, franchise fees, and other revenue increased by $23.2 million in Q2, driven primarily by roughly 300 net franchise openings since the prior year comparable period and same-store sales growth of 28.7%.

Speaker Change: While not fully annualized yet our new restaurant <unk> for our 2023 vintage are now approaching $1.6 million in year, one with 2024 vintages on a pace that's even stronger.

Alex Kaleida: The visibility we have into our pipeline gives us the confidence to raise our development outlook to a range of 285 to 300 net new restaurants. Total revenue increased 45.3% versus the prior year to $155.7 million. Royalty revenues, franchise fees, and other revenue increased by $23.2 million in Q2, driven primarily by roughly 300 net franchise openings since the prior year comparable period, and same-store sales growth of 28.7%. Company owned restaurant sales totaled $29.9 million in Q2 and increased to $7.3 million, primarily due to a 14.1% increase in company owned same-store sales, driven by transaction growth and seven net new restaurants versus the prior year comparable period.

Alex R. Kaleida: The visibility we have into our pipeline gives us the confidence to raise our development outlook to a range of 285 to 300 net new restaurants.

Speaker Change: Total revenue increased 45, 3% versus the prior year to $155 $7 million royalty revenues franchise fees and other revenue increased by $23 $2 million in Q2, driven primarily by roughly 300 net franchise openings since the prior year comparable peer.

Speaker Change: <unk> and same store sales growth of 28, 7%.

Alex R. Kaleida: Company-owned restaurant sales totaled $29.9 million in Q2, an increase of $7.3 million, primarily due to a 14.1% increase in company-owned same-source sales driven by transaction growth and seven net new restaurants versus a prior year comparable period.

Speaker Change: Company owned restaurant sales totaled $29 $9 million in Q2, an increase of $7.3 million, primarily due to a 14, 1% increase in company owned same store sales driven by transaction growth and seven net new restaurants versus the prior year comparable period.

Alex Kaleida: Our supply chain strategy has proven to be highly effective, a strategy that is centered around creating predictability and minimizing volatility and food costs. In the second quarter, our company-owned restaurant food, beverage, and packaging costs were well in our target range of mid-30% food costs, at a time when bone and wink costs on the spot market have reached north of $2.50 per pound. We acknowledge the recent market movement in the price of bone and wings. However, our expectations for food costs have not changed, and we continue to have line of sight to a food cost target in the mid 30% range.

Alex R. Kaleida: Our supply chain strategy has proven to be highly effective, a strategy that is centered around creating predictability and minimizing volatility and food costs. In the second quarter, our company-owned restaurant food, beverage, and packaging costs were well in our target range of mid-30% food costs at a time when bone-in wing costs on the spot market reached north of $2.50 per pound. We acknowledge the recent market movement and the price of bone-in wings.

Speaker Change: Our supply chain strategy has proven to be highly effective.

Speaker Change: Strategy that is centered around creating predictability and minimizing volatility in food costs.

Speaker Change: In the second quarter, our company owned restaurants, food beverage and packaging costs were well in our target range of mid 30% to cost.

Speaker Change: At a time when bone in wing costs on the spark spot market have reached north of $2 50 per pound.

Speaker Change: We acknowledge the recent market movement in the price of bone in wings. However, our expectations for food costs have not changed and we continue to have line of sight to food cost target in the mid 30% range.

Alex R. Kaleida: However, our expectations for food costs have not changed, and we continue to have line-of-sight to a food cost target in the mid-30% range. Historically, in an environment where the spot market was north of $2 per pound, we would experience food costs well into the 40% range.

Speaker Change: Historically in an environment, where the spot market was north of $2 per pound.

Speaker Change: We would experience food costs well into the 40% range.

Alex R. Kaleida: As we continue to lean into our strategy, it is providing us with a line of sight into 2025 food costs. This predictability of food costs is creating a tremendous level of excitement among our brand partners, and it's fueling this record demand for growth as it further strengthens our best-in-class unit economics. In the second quarter, SG&A increased by $6 million versus the prior year comparable period, to a total of $28.1 million, driven by investments to support our long-term strategies and an increase in incentive and performance-based stock compensation based on our industry-leading performance. Adjusted EBITDA, a non-GAAP measure, was $51.8 million during the quarter, an increase of 50.7% versus the prior year.

Speaker Change: As we continue to lean into our strategy. It is providing us with line of sight into 'twenty 'twenty five to costs.

Alex Kaleida: We're providing us with line of sight into 2025 food costs. This predictability of food cost is creating a tremendous level of excitement among our brand partners, and it's fueling this record demand for growth as it further strengthens our best in class unit economics. In the second quarter, SG&A increased by $6 million versus the prior year comparable period to a total of $28.1 million. Driven by investments to support our long term strategies and an increase in incentive and performance-based stock compensation based on our industry-leading performance. Adjusted EBITDA, a non-GAAP measure, was $51.8 million during the quarter, an increase of 50.7% versus the prior year.

Speaker Change: This predictability as to cost is creating a tremendous level of excitement among our brand partners and is fueling this record demand for growth as it further strengthens our best in class unit economics.

Speaker Change: In the second quarter, SG&A increased by $6 million versus the prior year comparable period to a total of $28 $1 million driven by investments to support our long term strategies and an increase in incentive and performance based stock compensation based on our industry leading performance.

Speaker Change: Adjusted EBITDA, a non-GAAP measure was $51.8 million during the quarter, an increase of 57% versus the prior year.

Alex Kaleida: This growth is on top of a Q2 2023 adjusted EBITDA growth rate of 47%. We delivered earnings per diluted share of 93 cents, a 70% increase versus the prior year. Another key tenant in our strategy is the enhanced shareholder returns. In the second quarter, we repurchased 75,862 shares of our stock at an average price of $381.29 per share. At the end of Q2, $96.1 million was remaining under our current share repurchase program authorization. Since the inception of our share repurchase program, we have repurchased a total of 721,814 shares at a weighted average price of $217.32.

Alex R. Kaleida: This growth is on top of a Q2 2023 adjusted EBITDA growth rate of 47%. We delivered earnings per diluted share of $0.93, a 70% increase versus the prior year. Another key tenet in our strategy is to enhance shareholder return. In the second quarter, we repurchased 75,862 shares of our stock at an average price of $381.29 per share.

Speaker Change: This growth is on top of our Q2 2023, adjusted EBITDA growth rate of 47%.

Speaker Change: We delivered earnings per diluted share of <unk> 93 sets, a 70% increase versus the prior year.

Speaker Change: Another key tenant and our strategy is to enhance shareholder returns in.

Speaker Change: In the second quarter, we repurchased 75862 shares of our stock at an average price of $381 29 per share.

Alex R. Kaleida: At the end of Q2, $96.1 million was remaining under our current share repurchase program authorization. Since the inception of our share repurchase program, we have repurchased a total of 721,814 shares at a weighted average price of $217.32. And another component of our return on capital strategy is our regular dividend program. On July 30th, our Board of Directors approved a dividend of $0.27 per share of Common Stock, an increase of 23%, which is a demonstration of the strength of our Asset Light model. This dividend, totaling approximately $7.9 million, will be paid on September 6, 2024 to stockholders on record as of August 16, 2024.

Speaker Change: At the end of Q2 $96 $1 million remaining under our current share repurchase program authorization.

Speaker Change: Since the inception of our share repurchase program, we have repurchased a total of 721814 shares at a weighted average price of $217.32.

Alex Kaleida: Another component of our return of capital strategy is through our regular dividend program.

Speaker Change: And another component of our return of capital strategy is through our regular dividend program.

Alex Kaleida: On July 30, our Board of Directors approved a dividend of 27 cents per share of common stock, an increase of 23%, which is a demonstration of the strength of our asset-like model. This dividend, totaling approximately $7.9 million, will be paid on September 6, 2024, to stockholders record as of August 16, 2024. We remain committed to enhancing shareholder returns through a combination of our remaining $96 million share repurchase authorization and our regular quarterly dividend program.

Speaker Change: On July 30, our board of directors approved a dividend of <unk> 27 cents per share of common stock an increase of 23%.

Speaker Change: Which is a demonstration of the strength of our asset light model.

Speaker Change: This dividend totaling approximately $7 $9 million will be paid on September six 2024th to stockholders of record as of August 16 2024.

Alex R. Kaleida: We remain committed to enhancing shareholder returns through a combination of our remaining $96 million share repurchase authorization and our regular quarterly dividend program. Now, shifting to guidance for 2024. Based on the strong results of the first half of the year and visibility into our pipeline, we are providing the following updates to our outlook. Domestic save source sales growth of approximately 20% for fiscal year 2024, previously low double digits.

Speaker Change: We remain committed to enhancing shareholder returns through a combination of our remaining $96 million share repurchase authorization and our regular quarterly dividend program.

Alex Kaleida: Now shifting the guidance for 2024. Based on the strong results of the first half of the year, and visibility into our pipeline, we're providing the following updates to our outlook. Domestic save source sales growth of approximately 20% for fiscal year 2024, previously low double digits; net new restaurants between 285 and 300, previously 275 to 295 net new restaurants. SGNA guidance is estimated to be between $114 and $116 million, previously approximately $111 million, including an approximately $20 million of sock-based compensation expense. The increase in the SG&A guidance is primarily driven by a short-term incentive compensation as a result of the performance in our business.

Speaker Change: Now shifting to guidance for 2024.

Operator: Net new restaurants between 285 and 300, previously 275 to 295 net new restaurants. SG&A guidance is estimated to be between $114 and $116 million, previously approximately $111 million, including approximately $20 million of SOC-based compensation expense. The increase in SG&A guidance is primarily driven by short-term incentive compensation as a result of the performance in our business. Our quarter two results are a testament to our proven strategies and focus we have to execute against our long-term vision of becoming a top 10 global restaurant brand.

Speaker Change: Based on the strong results of the first half of the year and visibility into our pipeline. We are providing the following updates to our outlook.

Speaker Change: Domestic same store sales growth of approximately 20% for fiscal year 2024.

Speaker Change: Previously low double digits.

Speaker Change: Net new restaurants between 285 and 300.

Speaker Change: Previously 275 to 295 net new restaurants.

Speaker Change: SG&A guidance is estimated to be between 114 and $160 million previously approximately $111 million, including approximately $20 million of stock based compensation expense.

Speaker Change: The increase in the SG&A guidance is primarily driven by short term incentive compensation as a result of the performance of our business.

Alex Kaleida: Our quarter two results are a testament to our proven strategies and focus we have to execute against our long-term vision of becoming the top 10 global restaurant brand. These results have not been possible without the extraordinary efforts by our global support team members, restaurant team members, brand partners, and supplier partners.

Speaker Change: Our quarter two results are a testament to our proven strategies and focus we have to execute against our long term vision of becoming a top 10 global restaurant brand.

Operator: These results would not have been possible without the extraordinary efforts by our global support team members, restaurant team members, brand partners, and supplier partners. I'd like to now turn to Q&A. Operator, please open the line for questions. Thank you. We will now begin the question and answer session. To ask a question, you may... Start with one on your telephone keypad. If you're using a speakerphone, please pick up your handshake before pressing the. If at any time your question has been addressed, and you'd like to withdraw your question, please press star then choose.

Speaker Change: These results would not have been possible without the extraordinary efforts by our global support team members rare.

Speaker Change: Our restaurant team members brand partners and supplier partners.

Operator: I'd like to now turn to Q&A. Operator, please open the line for questions. Thank you. We'll now begin the question and answer session. To ask a question, you may press star than one on your telephone keypad. If you're using a speaker phone, please pick up your headset before pressing the key. Is that anytime your question has been addressed and you'd like to withdraw your question, please press star-than-two. Please keep to one question in a follow-up, sure-all, as many participants as possible to ask a question.

Speaker Change: I'd like to now turn to Q&A operator, please open the line for questions.

Speaker Change: Oh sure.

Speaker Change: Well now begin the question.

Speaker Change: Sure.

Speaker Change: To ask a question you May press.

Speaker Change: Star then one.

Pat: So Pat.

Pat: So that's what I've got all those pick up in homes that they felt breath.

Pat: Is that true.

Speaker Change: My question has been addressed.

Speaker Change: I'd like to withdraw your question press.

Speaker Change: Sure.

Operator: Please skip to one question and a follow-up to allow as many participants as possible to ask a question. At this time, we'll pause momentarily to assemble our... The first question comes from David Tarantino from Baird. Please go ahead.

Speaker Change: So one question and a follow up to allow.

Speaker Change: As many participants as possible to ask a question.

Operator: At this time, we'll pause momentarily to assemble a roster.

Speaker Change: At this time, well pause momentarily to assemble our us there.

David Tarantino: The first question comes from David Tarantino from Baird. Please go ahead.

Pat: The first question comes from David Tarantino from Baird.

Speaker Change: Go ahead.

David Tarantino: Hi, hi. Good morning, and congratulations on a very strong start to the year. Michael, I had a question about your comments on brand awareness. I think you mentioned that brand awareness is up only a couple of percentage points in the gap versus maybe where you are now, versus where you'd like to be long-term is still pretty wide. I was wondering if you would be willing to share where you are on brand awareness versus some of the bigger national brands, just to kind of frame up the opportunity. And within that gap, you know, is it mostly some of these new consumers that you've been attracting?

Michael J. Skipworth: Hi, good morning, and congratulations on a very strong start to the year. Michael, I had a question about your comments on brand awareness. I think you mentioned that brand awareness is up only a couple of percentage points. The gap, where you are now versus where you'd like to be long term, is still pretty wide. I was wondering if you would be willing to share where you are on brand awareness versus some of the bigger national brands, to kind of frame up the opportunity, and within that gap, you know, mostly some of these new consumers that you've been attracting, I guess any Thank you for the question.

David E. Tarantino: Hi, Hi.

David E. Tarantino: Good morning, and congratulations on a very strong start to the year.

David E. Tarantino: Michael I had a question about your comments on brand awareness, but I think you mentioned the brand awareness is up only a couple of percentage points and the GAAP versus maybe where you are now versus where you'd like to be long term is still pretty wide.

Speaker Change: I was wondering if you would be willing to share where you are on brand awareness versus some of the bigger national brand just to kind of frame up the opportunity and and within that gap.

Speaker Change: Is it mostly some of these new consumers that you'd been attracting I guess any any color there would be great. Thanks.

Michael Skipworth: I guess any color there would be great. Thanks.

Michael Skipworth: Good morning, David. Thank you for the question. You know, I think you said it well or summarized it well in that year-to-date. We've been delivering over a 20% same-store sales growth, but when we measure how much that moved brand awareness over the prior year, we're only talking about a couple of few percentage points. And I think we've talked about in the past, the gap we have to other, more mature national brands is significant. It's meaningful. It's definitely in the double-digit range. And I think, as you think about that in concert with these other strategies we're executing against, it gives us a lot of confidence in our ability to achieve, over time, our new AUV target of $3 million.

Michael J. Skipworth: You know, I think you said it well or summarized it well in that, year-to-date, we've been delivering over 20% same-source sales growth, but when we measure how much that moved brand awareness over the prior year, we're only talking about a couple, a few percentage points. And I think we've talked about in the past, the gap we have with other more mature national brands is significant. It's meaningful. It's definitely in the double-digit range.

Speaker Change: Good morning, David Thank you for the question.

David: Thank you you said it well our summarized it well in that.

David: Year to date, we've been delivering over 20% same store sales growth, but when we measure how much that moved the brand awareness over the prior year, we're only talking about a couple of a few percentage points and I think we've talked about in the past the gap we have two other more mature national brands.

David: This is significant it's meaningful.

David: It's definitely in the in the double digit range and I think as you think about that in concert with these other strategies, we're executing against it gives us a lot of confidence in our ability to achieve over time, our new <unk> target of $3 million and we are bringing in a lot of new guests.

Michael J. Skipworth: And I think as you think about that in concert with these other strategies we're executing against, it gives us a lot of confidence in our ability to achieve, over time, our new AUV target of $3 million. And we are bringing in a lot of new guests into the brand. I think if you look at our results against this industry backdrop where there are a handful of brands that are increasing transactions and a lot more that are losing them, and we delivered in Q2 a 28.7% comp that was primarily driven by transaction growth, I think that really showcases the effectiveness of our strategies and the fact that we are bringing in a lot of new guests into the brand. And we're winning more occasions in addition to just bringing in

Michael Skipworth: And we are bringing in a lot of new guests into the brand. I think if you look at our results against this industry backdrop where there's a handful of brands that are increasing transactions and a lot more that are losing them. And we delivered in Q2 a 28.7% comp that was primarily driven by transaction growth. I think that really showcases the effectiveness of our strategies and the fact that we are bringing in a lot of new guests into the brand. And we're winning more occasions in addition to just bringing in new guests. We talked about menu innovation, chicken sandwich, and how that's allowing us to become more of that consideration set.

David: And of the brand I think if you if you look at our results against this industry backdrop, where theres a handful of brands that are increasing transactions in a lot more that are losing them.

David: And we delivered in Q2 of 28, 7% comp that was primarily driven by transaction growth I think that really showcases the effectiveness of our strategies and the fact that we are bringing in a lot of new guests into the brand and we're winning more occasions. In addition to just bringing in new guests and we talked about.

Michael J. Skipworth: We talked about menu innovation, the chicken sandwich, and how that's allowing us to become more of that consideration set. And as our team members and brand partners in the restaurant focus on operations excellence and delivering a great guest experience, we're winning more occasions. And so that gives us a lot of confidence in continuing to drive outsized top-line growth. And you saw that in our updated outlook for this year, where I don't know there are many other brands in this environment that are increasing their outlook for Sam's Store sales like we are, much less expecting the year to shape up to be something in that approximately 20% range.

David: Menu innovation chicken sandwich, and how that's allowing us to become more of that consideration set.

Michael Skipworth: And as our team members and brand partners in the restaurant focus on ops excellence and delivering a great guest experience, we're winning more occasions. And so that gives us a lot of confidence in continuing to drive outside top line growth. And you saw that in our updated outlook for this year where I don't know there's many other brands in this environment that are increasing their outlook for Samstore sales like we are, much less expect in the year to shape up to be something in that approximately 20% range.

David: And as our team members and brand partners in the restaurant focus on ops excellence in delivering a great guest experience, we're winning more occasions, and so that gives us a lot of confidence in continuing to drive our outsized.

David: Outsized top line growth you saw that in our updated outlook for this year, where I don't know there's many other brands in this environment that are increasing their outlook for same store sales like we are much less expecting the year to shape up to be something in that approximately 20% range.

David Tarantino: Great. And just to follow up, I think one of the big catalysts seems to have been advertising the chicken sandwich platform with your national media.

Speaker Change: Great and just a follow up I think one of the big catalyst seems to have been advertising the chicken sandwich platform.

Michael J. Skipworth: International Media, I wanted to sort of get your thoughts on whether that's something you're planning to continue, or are there new approaches with the average? Yeah, David, I think it ties back to just that significant opportunity we have around awareness. Obviously, the chicken sandwich is something that just about every consumer in the U.S. can relate to and understand how to engage with, with 2.8 billion chicken sandwich servings annually in the U.S. And so that's created a really easy entry point into our brand.

Speaker Change: Their national media.

Michael Skipworth: And I wanted to sort of get your thoughts on whether that's something you're planning to continue, or are there new approaches with the advertising that you're contemplating. Yeah, David, I think it ties back to just that significant opportunity we have around awareness. Obviously, chicken sandwich is something that just about every consumer in the US can relate to and understand how to engage with, with 2.8 billion chicken sandwich servings annually in the US. And so that's created a really easy entry point into our brand. And what we've seen with these new guests that we're bringing in is they interview a chicken sandwich, and then they learn to navigate the rest of the menu.

Speaker Change: I wanted to sort of get your thoughts on whether that's something you're planning to continue or are there new approaches with the advertising that you're contemplating.

Speaker Change: Yeah, David I think it ties back to just that that significant opportunity. We have around awareness, obviously chicken sandwich is something that just about every consumer in the U S can relate to and understand how to engage with with $2 8 billion chicken sandwich servings annually in the U S and so that's.

Speaker Change: Created a really easy entry point into our brand and what we've seen with these new guests that we're bringing in is they.

Michael J. Skipworth: And what we've seen with these new guests that we're bringing in is they enter via the chicken sandwich, and then they learn to navigate the rest of the menu. And we're seeing these new guests come back sooner, and come back more frequently. And so we're really encouraged by that. But I think, generally speaking, around our advertising, it's about just building awareness. And I think it's about showcasing abundance.

Speaker Change: They enter via chicken Sandwich, and then they learned to navigate the rest of the menu and that we're seeing these new guests come back sooner come back more frequently and so we're really encouraged by that but I think generally speaking around our advertising its about just building awareness and I think it's about showcasing abundance is about showcase.

Michael Skipworth: And we're seeing these new guests come back sooner, come back more frequently. And so we're really encouraged by that.

Michael Skipworth: But I think, generally speaking, around our advertising, it's about just building awareness. And I think it's about showcasing abundance; it's about showcasing the variety of our flavors. And we believe that strategy is resonating well with guests.

Michael J. Skipworth: It's about showcasing the variety of our flavors, and we believe that strategy is responding well with guests. Thank you very much and congrats again.

Speaker Change: And the variety of our flavors and we believe that strategy is resonating well with guests.

David Tarantino: Right, thank you very much, and we're out again. Thank you.

Speaker Change: Right.

Speaker Change: You very much and congrats again.

Speaker Change: Thank you.

Jeffrey Bernstein: The next question comes from Jeffrey Barnstein from Barclays. Please go ahead.

Michael J. Skipworth: The next question comes from Jeffrey Bernstein from Berkley. Please go ahead. Great. Thank you very much. My first question was just on the... The comp trends for the second quarter. Obviously, there's a lot of industry and investor concerns about slowing comp. But it doesn't seem to be evident in your results.

Speaker Change: And next question comes from Jeff Bernstein from Barclays. Please go ahead.

Speaker Change: Yeah.

Jeffrey Bernstein: Great, thank you very much.

Jeffrey Andrew Bernstein: Great. Thank you very much.

Jeffrey Bernstein: The first question we just saw in the comp trends for the second quarter. Obviously, there's a lot of industry and investor concerns of slowing comps. It doesn't seem to be evident in your results. I wonder if you could share maybe the trends directional or specifically by month and into July. When you're seeing any change in consumer behavior to note whether it's visitation, makeshift, anything along those lines that would either reflect any change in the macro for better or for worse, and then had one follow up.

Jeffrey Andrew Bernstein: My first question was just on the.

Speaker Change: The comp trends for the second quarter, obviously, there's a lot of industry and investor concerns of slowing comps it.

Speaker Change: It doesn't seem to be evident in your results.

Michael J. Skipworth: I was wondering if you could share, maybe, the trends, directional or specifically by month and into July. And are you seeing any change in consumer behavior to note, whether it's visitation, makeshift, anything along those lines that would either reflect any change in the macro for better or for worse.

Speaker Change: I was wondering if you could share maybe the the trends <unk>.

Speaker Change: <unk> or specifically by month and into July what are you seeing any change in consumer behavior to note, whether its visitation mix shift or anything along those lines.

Speaker Change: That would either reflect any change in the macro for better for worse, and then I had one follow up.

Michael Skipworth: Yeah Jeff, good morning. As it relates to Q2, we saw a pretty consistent comp throughout the quarter, which I think just showed consistent strength in our business. And as we think about the overall backdrop, I think it really just showcases Wingstop operating in a category of one.

Michael J. Skipworth: Yeah, Jeff, good morning. As it relates to Q2, we saw a pretty consistent comp throughout the quarter, which I think just shows consistent strength in our business. And as we think about, you know, the overall backdrop, I think it really just showcases Wingstop operating in a category of 1. And there's a couple things to point out here.

Speaker Change: Yeah, Jeff Good morning, as it relates to Q2, we saw pretty consistent comp throughout the quarter, which I think just showed consistent strength in our business.

Speaker Change: And as we think about the overall backdrop I think it really just showcases wingstop operating in a category of one and there's a couple of things to point out here.

Michael Skipworth: And there's a couple of things to point out here with our guide for 2024 that setting us up to deliver our 21st consecutive year of same-store sales growth. And so I think within those couple of decades there, you can clearly see that we've been able to grow same-store sales regardless of the macro backdrop. And I think that highlights the unique position of our brand, how consumers, if they are under pressure and do begin to pull back, what we've seen historically is they'll pull back on more high-frequency occasions, and they'll save up for that indulgent Wingstop occasion.

Speaker Change: With our guide for 2024, that's setting us up to deliver our 21st consecutive year of same store sales growth and so I think within those couple of decades. There you can clearly see that we've been able to grow same store sales, regardless of the macro backdrop and I think that highlights the.

Michael J. Skipworth: With our guide for 2024, that's setting us up to deliver our 21st consecutive year of same-store sales growth. And so I think within those couple of decades, you can clearly see that we've been able to grow same-store sales regardless of the macro backdrop. And I think that highlights the unique position of our brand, how consumers, if they are under pressure and do begin to pull back, what we've seen historically is they'll pull back on more high-frequency occasions, and they'll save up for that indulgent Wingstop occasion.

Speaker Change: A unique position of our brand how consumers if they are under pressure and you begin to pull back what we've seen historically is they'll pull back on more high frequency occasions, and they'll save up for that indulgent Wingstop occasion, and that's allowed us to retain those those visits and continue to grow the business and then in addition to that we.

Michael Skipworth: And that's allowed us to retain those visits and continue to grow the business.

Michael J. Skipworth: And that's allowed us to retain those visits and continue to grow the business. And then, in addition to that, we have some really unique brand-specific growth drivers that we're executing against, whether it's closing the gap in brand awareness, whether it's bringing new guests in via menu innovation like the chicken sandwich, or continuing to expand the top of the funnel through access via delivery, which remains a significant opportunity. And then all of that is supported by a digital business that's close to 70% of sales, a database of over 45 million users strong that we've invested in to be very targeted with how we advertise, and then continuing to expand our digital business.

Michael Skipworth: And then, in addition to that, we have some really unique brand-specific growth drivers that we're executing against. Whether it's closing the gap and brand awareness, whether it's bringing new guests in via menu innovation like chicken sandwich, continuing to expand the top of the funnel through access via delivery, which remains a significant opportunity. And then all of that supported by a digital business that's close to 70% of sales, a database of over 45 million users strong that we've invested in to be very targeted with how we advertise, and then continuing to expand our digital business. And so all of that, I think, just really puts us in a unique spot.

Speaker Change: Have some really unique brand specific growth drivers that we're executing against whether it's closing the gap in brand awareness, whether it's bringing new guests N V. A menu innovation like chicken sandwich, continuing to expand the top of the funnel through access via delivery, which remains a significant opportunity.

Speaker Change: And then all of that supported by a digital business, that's close to 70% of sales.

Speaker Change: Database of over 45 million users strong that we've invested in to be very targeted with how we advertise and then continuing to expand our digital business and so all of that I think just really puts us in a unique spot and it puts us in a position to where we can in this environment actually increase our outlook this year.

Michael J. Skipworth: And so all of that, I think, just really puts us in a unique spot and puts us in a position where we can, in this environment, actually increase our outlook this year, where a lot of other brands are navigating a more challenging environment. Understandable, and my follow-up. I mean, I think investors get excited by the comp growth, but it's hard to imagine you can sustain at these levels long-term.

Jeffrey Bernstein: And then puts us in a position to where we can, in this environment, actually increase our outlook this year, where a lot of other brands are navigating a more challenging environment. And then my follow-up, I mean I think investors get excited by the comp growth, but hard to imagine you can sustain at these levels long-term. So it's really the unique growth that is the more consistent, stable top line driver. In fact, you bumped up your target for this year to what looks like 13 to 14 percent. I think you mentioned it's the strongest pipeline ever.

Speaker Change: There are a lot of other brands are navigating a more challenging environment.

Speaker Change: Understood and then my follow up.

Speaker Change: Investors get excited by the comp growth, but hard to imagine can sustain at these levels long term. So it's really the unit growth that is.

Michael J. Skipworth: So it's really the unit growth that is the more consistent, stable top-line driver. The fact that you bumped up your target for this year to what looks like 13 to 14 percent, I think you mentioned it's the strongest pipeline ever. I'm just wondering, as you think outgoing into next year, your long-term algorithm is for 10% growth, but on that higher base of openings this year, you have the visibility to see more openings in 2025 versus 2024 to kind of maintain that elevated percentage growth rate.

Speaker Change: The more consistent stable top line driver.

Speaker Change: In fact, you bumped up your target for this year to what it looks like 13%, 14% I think you mentioned, it's the strongest pipeline ever.

Michael Skipworth: I'm just wondering as you think out going into next year, I mean your long-term algorithm is for 10 percent growth but on that higher base of openings this year, you have the visibility to see more openings in 25 versus 24 to kind of maintain that elevated percentage growth rate. And within that, you talk about a 3 million AUV, but there was no necessarily time frame to achieve. I'm just wondering if you can give any kind of thoughts as to how many years before we're talking about 4 million.

Speaker Change: I'm just wondering as you think out going into next year I mean, your long term algorithm is for 10% growth, but on that higher base of openings. This year ease of the visibility to see more openings in 25 versus 24 to kind of maintain that elevated percentage growth rate and within that you're talking about a $3 million of UV, but there was no necessarily timeframe.

Michael J. Skipworth: And within that, you talk about a 3 million AUV, but there was no necessarily a timeframe to achieve it. I'm just wondering if you can give any kind of thoughts as to, you know, how many years before we're talking about 4 million. Thank you. Thanks, Jeff. I mean, I think you highlighted something really important.

Speaker Change: To achieve I'm just wondering if you can give any kind of thoughts as to how many years before we're talking about a $4 million. Thank you.

Michael Skipworth: Thank you. Thanks, Jeff. I mean, I think you highlighted something really important. We often talk a lot about same-store sales, but for us it's really focused on continuing to drive AUV growth. And in just two years to have gone from 1.5 million to 2 million, that's translated to strengthen unit economics. And then you combine that with the progress against our supply chain strategy. The demand for growth from our brand partners is really strong, and so it gives us confidence in continuing to be able to deliver on our long-term algorithm as far as unit growth goes.

Speaker Change: Okay.

Speaker Change: Thanks, Jeff I mean, I think you highlighted something really important we often talk a lot about same store sales, but for us. It's really focused on continuing to drive <unk> growth and then just two years have gone from $1 5 million to $2 million. That's translated to strengthen unit economics, and then you combine that with the progress.

Michael J. Skipworth: We often talk a lot about same-store sales, but for us, it's really focused on continuing to drive AUV growth. And in just two years, we have gone from $1.5 million to $2 million, which has translated to strengthen unit economics. And then you combine that with the progress against our supply chain strategy; the demand for growth from our brand partners is really strong, and so it gives us confidence in continuing to be able to deliver on our long-term algorithm as far as unit growth is concerned.

Speaker Change: Against our supply chain strategy the demand for growth from our brand partners is really strong and so it gives us confidence in continuing to be able to deliver on our long term algorithm as far as unit growth goes, but I think most importantly, as we thought about the opportunity we have within the U S. We feel.

Michael J. Skipworth: But I think most importantly, as we think about the opportunity we have within the U.S., we feel like we're in a position to support increasing that total addressable market to over 6,000 units. And so as we continue to deliver on that algorithm, obviously, that denominator gets bigger. And therefore, we'll need to open more units year after year, and we think the demand is there to support that. The next question comes from Andrew Charles from Cohen. Please go ahead. Great, thank you. You know, Michael, something clicked this quarter.

Michael Skipworth: But I think most importantly, as we thought about the opportunity we have within the US, we feel like we're in a position in the work to support increase in that total addressable market to over 6000 units. And so, as we continue to deliver on that algorithm, obviously that denominator gets bigger and therefore will need to open more units year after year, and we think the demand is there to support that.

Speaker Change: Like we're in a position in the work to support increasing that total addressable market to over 6000 units and so as we continue to deliver on that algorithm, obviously that denominator gets bigger and therefore will need to open more units year after year and we think the demand is there to support that.

Speaker Change: Okay.

Jeffrey Bernstein: Thank you.

Speaker Change: Thank you.

Andrew Charles: The next question comes from Andrew Charles from Cole, and please go ahead.

Speaker Change: The next question comes from Andrew Charles from Cowen. Please go ahead.

Andrew Charles: Great. Thank you.

Michael J. Skipworth: I mean, you've had very strong traffic growth for the better part of the last two years. But the fact that guest frequency is starting to improve, you know, from that roughly three times a quarter, roughly once a month level, is there something you can pinpoint around what's changing the frequency? You know, I would think it'd be the advertising, but anything you can point to around how you're rationalizing would be very helpful. Yeah, Andrew, good morning.

Andrew Michael Charles: Great. Thank you.

Andrew Charles: Michael, something clicked this quarter. I mean you've had very strong traffic growth for the better part of the last two years. But the fact that guest frequency starting to improve from that roughly three times a quarter or roughly once a month level. Is there something you can pinpoint around what's changing the frequency? I would think it would be the advertising, but anything you can point to around how you're rationalizing would be very helpful.

Andrew Michael Charles: Michael something click this quarter I mean, you've had very strong traffic growth for the better part of the last two years, but the fact that guest frequency starting to improve from that roughly three times a quarter roughly once a month level is there something you can pinpoint around what's changing the frequency you know I would think it would be the advertising, but anything you can point to around how you rationalize.

Speaker Change: It would be very helpful.

Michael Skipworth: Yeah, Andrew, good morning.

Michael J. Skipworth: The really thing driving an uptick in frequency is a couple of things. One is, as we continue to become more that consideration set. And we lean in and focus on delivering on value and quality, where we have measured continued improvements in those categories. The consumers are rewarding us for that. But I think this new guest that we're bringing in, as I mentioned earlier, we're continuing to bring in a record level of new guests quarter after quarter, and these new guests are coming back to the brand sooner than our traditional guests, and they're moving up that frequency curve faster, and so that's starting to impact the overall frequency, which we're really encouraged by, because we think we can continue to broaden how consumers view Wingstop, how Okay, very helpful.

Andrew Michael Charles: Yeah, Andrew good morning.

Michael Skipworth: The really the thing driving an uptick and frequency is a couple of things.

Michael: The really the thing driving an uptick in frequency as a couple of things. One is as we continue to become more of that consideration set.

Michael Skipworth: One is as we continue to become more that consideration set. Consumer, and we lean in and focus on delivering on value and quality, where we have measured continued improvements in those categories. The consumers are rewarding us for that, but I think this new guest that we're bringing in, as I mentioned earlier, we're continuing to bring in a record level of new guests quarter after quarter, and these new guests are coming back to the brand sooner than our traditional guests. And they're moving up that frequency curve faster, and so that's starting to impact the overall frequency, which we're really encouraged by because we think we can continue to broaden how consumers view Wingstop, how we fit in their consideration set, and win more and more occasions over time.

Speaker Change: Consumer and we lean in and focus on delivering on value and quality.

Speaker Change: Where we have measured the continued improvements in those categories. The consumers are rewarding us for that but I think this new guests that were bringing in as I mentioned earlier.

Speaker Change: We're continuing to bring in a record level of new guests quarter after quarter and these new guests are coming back to the brand sooner than our traditional gas and theyre moving up that frequency curve faster and so that's starting to impact the overall frequency what we're really encouraged by because we think we can continue to broaden how how.

Speaker Change: Consumers view Wingstop, how we fit in their consideration set and win more and more occasions overtime.

Andrew Charles: Okay, very helpful.

Michael J. Skipworth: And then my follow-up question is that this is the second time you've raised a long-term TAM for the U.S. market. Can you talk about how you landed on 6,000 stores? Last time you did this, you went from 3,000 to 4,000.

Speaker Change: Okay very helpful. And then my follow up is that this is the second time, you've raised the long term Tam for the U S market can you talk about how you landed on 6000 stores last time you did this you went from 3004 thousand so I'm just curious how do you leapfrog 5000 get to the 6000.

Andrew Charles: And then my follow-up is that this is the second time you've raised a long-term TAM for the US market.

Michael Skipworth: Keep talking about how you landed on 6,000 stores. Last time you did this, you went from 3,000 to 4,000. So just curious how you lead Prague 5,000 to the 6,000. Yeah, Andrew, it has a lot to do with just the progress we've made over the past couple of years. Take some of our more mature markets as an example of DFW, where we continue to open more restaurants, and we see a lot of runway in front of us. And so it ties back a little bit to your prior question of as Wingstop becomes more the consideration set as we've won more new guests.

Michael J. Skipworth: So I'm just curious how you leapfrogged 5,000 to get to 6,000. Yeah, Andrew, it has a lot to do with just the progress we've made over the past couple years. Take some of our more mature markets, like DFW, where we continue to open more restaurants, and we see a lot of runway in front of us. And so it ties back a little bit to your prior question of as Wingstop becomes more of a consideration set, as we've won more new guests, that's providing an opportunity for more restaurants within the U.S. And so we did a very detailed analysis around the progress we made and how that would develop over time across the broader U.S. And that's how we arrived at a pretty meaningful opportunity of over 6,000 units in the U Very helpful.

Speaker Change: Yeah, Andrew It has a lot to do with just the progress we've made over the past couple of years. It takes some of our more mature markets. As an example of DFW, where we continue to open more restaurants, and we see a lot of runway in front of us and so it ties back a little bit to your prior question of as Wingstop becomes.

Andrew Michael Charles: More of the consideration set as we've won more new guests.

Michael Skipworth: That's providing an opportunity for more restaurants within the U.S. And so we did a very detailed analysis around the progress we made and how that would develop over time across the broader US, and that's how we arrived at a pretty meaningful opportunity of over 6,000. 6,000 units in the United States, which is over triple our footprint today.

Andrew Michael Charles: That's providing an opportunity for more restaurants within the U S and so we did a very detailed analysis around the progress we made and how that would.

Andrew Michael Charles: How that would develop over time across the broader U S and that's how we arrived at a pretty meaningful opportunity of over 6000 units in the United States switches over triple our footprint today.

Andrew Charles: Very helpful. Thanks, Michael.

Michael: Very helpful. Thanks, Michael.

Michael Skipworth: Thank you.

Speaker Change: Thank you.

Speaker Change: Yeah.

Sarah Chinatour: The next question comes from Sarah Chinatour from Bank of America. Please go ahead.

Michael J. Skipworth: Thanks, Michael. Thank you. The next question comes from Sara Senatore from Bank of America. Please, go ahead.

Speaker Change: The next question comes from Sara Senatore from Bank of America. Please go ahead.

Sarah Chinatour: Great. Thank you.

Michael J. Skipworth: Great, thank you. A clarification and then a question. So, just in terms of the, you know, going from 2 to 3 million that target AUV, is there anything, you know, any constraints that you would need to address from a production standpoint, you know, whether it's the kitchen size or, you know, or, you know, equipment, anything that would limit that based on what you have now, or could you just anticipate seeing kind of continued leverage as you, you know, sweat the assets even harder than Good morning, Sara.

Sara Harkavy Senatore: Great. Thank you Claire.

Sarah Chinatour: A clarification and then a question. So just in terms of the, you know, going from 2 to 3 million that target AUV, is there anything, you know, any constraints that you would need to address from a production standpoint, you know, whether it's the kitchen size or, you know, equipment, anything that would limit that based on what you have now or could you just anticipate seeing kind of continued leverage as you, you know, work the assets even harder than you have already.

Sara Harkavy Senatore: A clarification and then a question. So just in terms of that you know going from $2 million to $3 million that target AZ is there anything you know any constraints that you would need to address them.

Speaker Change: Production standpoint, you know, whether it's or excuse me the size or.

Speaker Change: Or.

Speaker Change: Equipment anything that would limit that based on what you have now or could you.

Speaker Change: Anticipating continued leverage as you.

Speaker Change: The assets, even harder than you have already.

Michael Skipworth: Good morning, Sarah. I think I mentioned in my prepared remarks that the first Wingstop that opened 30 years ago and in that same efficient box where we're doing roughly $4 million out of the same kitchen in and that that restaurant is still growing transactions. And so I think we don't have a capacity constraint by any means as we sit here today. Roughly 10%, a little bit more, of our system is already doing $3 million or above. So there's a lot of capacity within the restaurant, so we don't see a need for any sort of structural change in the size of the box or the operations to be able to achieve that.

Speaker Change: Good morning.

Michael J. Skipworth: I think I mentioned in my prepared remarks that the first Wingstop opened 30 years ago, and in that same efficient box, we're doing roughly $4 million out of the same kitchen, and that restaurant is still growing transactions. And so I think we don't have a capacity constraint by any means. As we sit here today, roughly 10%, a little bit more of our system, is already doing $3 million or above. So there's a lot of capacity within the restaurant, and so we don't see a need for any sort of structural change in the size of the box or the operations to be able to achieve that. And I think it really kind of showcases the strength that we've seen across all vintages within the brand who are delivering outsized comps.

Speaker Change: I think I mentioned in my prepared remarks, the first Wingstop that opened 30 years ago and in that same efficient box, where were doing roughly $4 million out of out of out of the same kitchen and and that that restaurant is still growing transactions and.

Speaker Change: And so I think we don't have a capacity constraint by any means as we sit here today.

Speaker Change: Roughly 10% a little bit more of our system is already doing $3 million or above so there's a lot of capacity within the restaurant and so we don't see a need for any sort of structural change in the size of the box or the operations to be able to achieve that.

Alex Kaleida: And I think it really kind of showcases in the strength that we've seen across all ventages within the brand who are delivering outside comps.

Speaker Change: And I think it really kind of as showcases in and the strength that we've seen across all vintages.

Speaker Change: Within the within the brand who are delivering outsized comps.

Sarah Chinatour: Okay, thank you for clarifying. And then the question is about, you know, cost because it's obviously, you know, you sort of made a structural shift that's really benefited the business given, you know, would have been 40% food costs in the past at these, at these bone-in prices. So I understand what that means for pricing going forward because I think the value proposition is very strong, and the longer you continue to take limited amounts of price while everybody else kind of has to cover higher inflation, the greater that is. But, but so I guess how should I think about this going forward? You know, if it truly is kind of fixed at this mid 30s, then presumably, you know, your pricing only has to cover kind of wage or other inflation.

Michael J. Skipworth: And then the question is about, you know, the cost of goods, which obviously, you've sort of made a structural shift that's really benefited the business, given, you know, with these, it would have been 40% food costs in the past at these boning prices. So I just wanted to understand what that means for pricing going forward because I think, you know, the value proposition is very strong. And the longer you continue to take limited amounts of price while everybody else kind of has to cover higher inflation, the greater that is.

Speaker Change: Got it okay. Thank you for clarifying and then the question is about.

Speaker Change: That's it guys. It's obviously.

Nathan: Sure Nathan.

Nathan: A structural shift that's really benefited the business given.

Nathan: It would've been 40% food cost in the past and that is done at these done in prices.

Speaker Change: I didn't understand what that means for pricing going forward, because I think the value proposition is very strong.

Speaker Change: The longer you continue to take limited amounts of price, while everybody else kind of helps to cover higher inflation.

Speaker Change: The greater that is.

Alex R. Kaleida: But so I guess, how should I think about this going forward? You know, if it truly is kind of fixed at this mid-30s, then presumably, you know, your pricing only has to cover wage or other inflation. But I'm also trying to get my head around this idea that, you know, even if wing prices go up over time, you can still maintain this mid-30s. So maybe just a little bit more clarity on what your input costs are, how this works for input costs, and then, you know, your pricing strategy. Thanks. Good morning, Sara. This is Alex.

Speaker Change: But so I guess, how should I think about this going forward.

Speaker Change: Truly is kind of fixed at this mid thirties, and then presumably you know your pricing only has to cover kind of wage or other than Samsung.

Alex Kaleida: But I'm also trying to get my head around this idea that, you know, even if wing prices go up over time, you can still maintain this mid 30. So maybe just a little bit more clarity on what, you know, your impact cost, how this works for impact cost and then, you know, pricing strategy.

Speaker Change: But I'm also trying to get my head around this idea that you know even if when prices go up over time you can sell maintain this mid 30, so maybe just a little bit more clarity on what you hear them to cross how this works for input costs.

Speaker Change: You know pricing strategy. Thanks.

Alex Kaleida: Good morning, Sara. This is Alex. Thanks for the question. Yeah, we view this. Michael mentioned the excitement of our brand partners on the strength of the unit economics.

Alex R. Kaleida: Thanks for the question. Yeah, it's, you know, we view this. Michael mentioned the excitement of our brand partners on the strength of unit economics. And this strategy is a big unlock for us, and our strategy at the core of our first supply chain is to mitigate the volatility in our food costs. Just to paint the picture a bit of our history as a brand, if you trace back to a year like 2017 and Q3, we had a wing price on the spot market that was just under $2.10. And our food costs were 43% at that time.

Speaker Change: Good morning, Sarah This is Alex thanks for the question.

Speaker Change: Yes.

Speaker Change: View this as Michael mentioned, the excitement of our brand partners on the strength of the unit economics and this strategy is a big unlock for us and our strategy at the core of our.

Alex Kaleida: And this strategy is a big unlock for us. And our strategy at the core of our first supply chain is to mitigate the volatility in our food costs. Just to paint the picture a bit of our history as a brand, and if you trace back a year like 2017 and Q3, we had a wing price on the spot market that was just under $2.10. And our food costs was 43% at that time. Fast forward to today. Our quarter just ended below 36%. We saw the spot market move by $0.60 quarter to quarter, and the average market price for wings was about $2.30.

Speaker Change: For supply chain is to mitigate the volatility in our food costs just to paint the picture a bit of our history as a brand if you trace back to a year like 2017 in Q3, we had a wing price on the spot market that was just under $2.10 and our food cost was 43% at that.

Alex R. Kaleida: Fast forward to today, our quarter just ended, you know, below 36%. We saw the spot market move by $0.60 quarter to quarter, and the average market price for wings was about $2.30. So something our brand partners are really excited about, and we now have gotten visibility into 2025. And to your question on price, what this allows us to do is remain disciplined on opportunistic price increases that we can take to really maximize this transaction growth we're seeing in our business. The next question comes from Cruzalco from Schieffel. Please go ahead.

Speaker Change: Time.

Speaker Change: Fast forward to today, our quarter just ended.

Speaker Change: Low 36%, we saw the spot market move by 60, <unk> quarter to quarter and the average market price for wings was about $2.30.

Alex Kaleida: So something our brand partners were really excited about.

Speaker Change: So something our brand partners are really excited about and we now have gotten visibility into 2025 and to your question on price. What this allows us to do is remain disciplined on opportunistic price increases that we can take to really maximize this transit transaction growth, we're seeing in our business.

Alex Kaleida: And we now have gotten visibility into 2025. And to your question on price, what this allows us to do is remain disciplined on opportunistic price increases that we can take to really maximize this transaction growth receipt in our business.

Speaker Change: Okay.

Crisocle: The next question comes from Crisocle from Stisle. Please go ahead. Yeah.

Crazy Cold: The next question comes from Crazy Cold front.

Speaker Change: Please go ahead.

Michael J. Skipworth: Yeah, Michael, I just had a follow-up question about the TAM changes. I mean, the U.S. system sales goal went to $18 billion from $8 billion. So can you give us a little more color around the research the company did to determine that's a reasonable potential for the chain in the U.S.? Yeah, I mean, Chris, if you think about other more mature brands who have similar footprints but yet don't necessarily operate in Category 1 like us, I think at a high-level, top-down approach, it's pretty easy to get there.

Speaker Change: Yeah.

Crisocle: Michael, I just had a follow-up question about the TAM changes. I mean, the US system sales goal went from $18 billion to $8 billion. So can you give us a little more color around the research the company did to determine that the reasonable potential for the chain in the US? Yeah. I mean, I think, Chris, if you think about other more mature brands who have similar footprints, but yet don't necessarily operate in a category of one like us, I think at a high level top-down approach, it's pretty easy to get there. But then, as we worked from the bottoms up and went trade areas specific, understanding the demographics, understanding how restaurants perform that are more mature than maybe some of these new or emerging markets, it was a pretty detailed analysis that gives us confidence in our ability to deliver that.

Speaker Change: Michael I just had a I had a follow up question about the Tam changes I mean, the U S system sales go went from went to 18 billion from 8 billion. So can you give us a little more color around the research the company did to determine that's a reasonable potential for the chain in the U S.

Speaker Change: Yeah, I mean, I think Chris if you think about.

Speaker Change: Other more mature brands, who have similar footprints, but yet don't necessarily operate in a category one like us I think at a high level tops down approach, it's pretty easy to get there, but then as we worked from the bottoms up and went trade area specific understanding the demographics understanding.

Michael J. Skipworth: But then as we worked from the bottom up and went trade area-specific, understanding the demographics, understanding how restaurants perform that are more mature than maybe some of these new or emerging markets, it was a pretty detailed analysis that gave us confidence in our ability to deliver that.

Speaker Change: How restaurants perform that are more mature than maybe some of these newer emerging markets. It.

Speaker Change: It was a pretty detailed analysis that gives us confidence in our ability to deliver that.

Crisocle: Okay.

Michael J. Skipworth: And then, Michael, the UK AUVs are now exceeding the US. The company just announced a marketing event in Paris with an opening, I think, planned later this year. Can you help us understand how the system plans to expand in Western European countries? And in that response, how many units do you believe the system could have in that region, let's say, over the next three to five years? Yeah, Chris, we're pretty excited about the momentum we have in our international business, and I don't think it's, I would narrow the conversation to just Western Europe.

Michael: Okay, and then Michael.

Michael Skipworth: And then Michael, the UK AUVs are now exceeding the US. The company just announced a marketing event in Paris with an opening I think planned later this year. Can you help us understand how the system plans to expand in Western European countries? And in that response, how many units do you believe the system can have in that region, let's say over the next three to five years? Yeah, Chris, we're pretty excited about the momentum we have in our international business.

Michael: K a visa now exceeding the U S. The company just announced the marketing event in Paris with an opening I think planned later this year can you help us understand how the system plans to expand in western European countries and in that response, how many units you believe the system can have in that region, let's say over the next three to five years.

Michael J. Skipworth: If we look across all of our markets, even the more mature ones that we've been in for a while, such as Mexico or Indonesia, we're experiencing double-digit growth, similar to what we're seeing in the U.S. And so that gives us a lot of excitement about the overall opportunity that we have. Combining that with the demand in our business development pipeline for new countries, we're pretty bullish about the opportunity we have outside of the U.S. And you're right, in the U.K., the brand is performing extremely well. And that's our proven playbook. And so you're going to see us replicate that across the additional markets that we expand into. We're already doing that in Canada and Puerto Rico.

Michael: Yeah, Chris we're we're pretty excited about the momentum we have in our international business and I don't think it's I would narrow the conversation to just western Europe, if we look across all of our markets.

Michael Skipworth: And I don't think it's; I would narrow the conversation to just Western Europe. If we look across all of our markets, even the more mature ones that we've been in for a while, such as Mexico or Indonesia, we're experiencing double-digit growth similar to what we're seeing in the US. And then, so that gives us a lot of excitement about the overall opportunity that we have. Couple that with the demand for in our business development pipeline for new countries, we're pretty bullish about the opportunity we have outside of the US. And you're right. In the UK, the brand is performing extremely well.

Speaker Change: Even the more mature ones that we've been in for a while such as Mexico, where engine the Asia we're experiencing.

Speaker Change: Double digit growth.

Speaker Change: Similar to what we're seeing in the U S and so that gives us a lot of excitement about the overall opportunity that we have coupled that with the demand for our in our business development pipeline for new countries, we're pretty bullish about the opportunity we have outside of the U S and you're right and and.

Speaker Change: The U K the brand is performing extremely well.

Michael Skipworth: And that's our proven playbook. And so you're going to see us replicate that across the additional markets that we expand into. We're already doing that in Canada, Puerto Rico. You mentioned US Open in a location in Paris later. That's exactly right. We know the playbook. We feel like it's proven. And so it's about just finding the right partner and scaling this thing. And so we're pretty excited about the overall opportunity outside of the US.

Speaker Change: And that's the that's our proven playbook and so youre going to see us replicate that.

Speaker Change: Across the additional markets that we expand into we're already doing that in Canada, Puerto Rico you.

Michael J. Skipworth: You mentioned us opening a location in Paris later. That's exactly right. We know the playbook. We feel like it's proven. And so it's about just finding the right partner and scaling this thing. And so we're pretty excited about the overall opportunity outside of the U.S. The next question comes from Danilo Gargiulo from Bernstein. Please go ahead. Thank you, and Congress, again, on exceptional order once again.

Speaker Change: You mentioned us opening a location in Paris later, that's exactly right. We know the playbook, we feel like it's proven and so it's about just finding the right partner and scale in this thing and so we're pretty excited about the overall opportunity outside of the U S.

Milos Arziolo: Thank you. The next question comes from Milos Arziolo from Bernstein. Please go ahead.

Speaker Change: Yeah.

Speaker Change: Thank you.

John <unk>: The next question comes from John <unk>.

John <unk>: From Bernstein. Please go ahead.

Milos Arziolo: Thank you and Congress again on exceptional quarter once again. My question is back on to your AUV growth about the you know three million dollar going forward.

John <unk>: Thank you and Congress had had an exceptional quarter once again my questions back onto your <unk> growth.

Michael J. Skipworth: My question is back on to your AUV growth above the, you know, $3 million going forward. I know you mentioned that there is no kitchen capacity constraint that you're seeing today, but the refrigeration space might be a little bit more limited. So can you help us understand whether, you know, the most successful stores right now that are having AUVs above $3 million are maybe leveraging some increased delivery from suppliers? And if so, how does that change your supply chain strategy going forward?

Speaker Change: The Ah <unk>.

Speaker Change: Daughter going forward.

Michael Skipworth: I know you mentioned that there is no kitchen capacity constraint that you're seeing today, but the refrigeration space might be a little bit more limited. So can you help us understand whether you know the most successful stores right now that are having AUVs above the three million dollar are maybe leveraging some increased delivery from suppliers and it's so how does that change your supply chain strategy going forward? And also you can give us some context on what percent of your stores are already above the three million dollar AUV. Thank you. Thank you and good morning.

Speaker Change: You mentioned that there is no pizza and capacity constrained that youre seeing today.

Speaker Change: But the refrigeration space might be a little bit more limited. So can you can you help us understand whether you know the more successful scores right now that are heading figure. Please.

Speaker Change: <unk> seen even daughter or maybe leveraging some increased delivery from suppliers and if so how does that change your supply chain strategy going forward and also if you can give us some context on what percentage of your stores are already above the assuming the daughter Haley. Thank you.

Michael J. Skipworth: And also, if you can give us some context on what percentage of your stores are already above the $3 million AUV. Thank you and good morning. You know, I think that's one of the unique things about Wingstop is to achieve those AUV levels. It doesn't require a fundamental change to the asset or the kitchen or the back of the house.

Speaker Change: Thank you and good morning.

Michael Skipworth: You know, I think that's one of the unique things about Wingstop is to achieve those AUV levels. It doesn't require a fundamental change to the asset or the kitchen or the back of the house. It may require one additional delivery of chicken a week, but not a fundamental change to the operations. And you know, as we sit here today, I mentioned previously over 10 percent of our system is already doing three million dollars in AUVs, and really the only difference from those restaurants and the ones that are below three million dollars have to do with tenure.

Speaker Change: You know I think that's one of the unique things about Wingstop is is to achieve those AUC levels. It doesn't require.

Speaker Change: A fundamental change to the asset or the kitchen or the back of the house. It may require one additional delivery of chicken a week.

Michael J. Skipworth: It may require one additional delivery of chicken a week, but not a fundamental change to the operations. And, you know, as we sit here today, I mentioned previously, over 10% of our system is already doing $3 million in AUVs. And really, the only difference between those restaurants and the ones that are below $3 million has to do with tenure.

Speaker Change: But but not a fundamental change to the operations and you know as we sit here today I mentioned previously over 10% of our system is already doing $3 million in <unk> and really the only difference from those restaurants and the ones that are below $3 million has to do with tenure.

Michael J. Skipworth: If you stack up our restaurants by vintage, it's a pretty linear chart up and to the right. And so the reality is, these are a little bit more tenured restaurants who have had the opportunity to participate in more of those 20, soon to be 21, years of same-store sales. Great.

Michael Skipworth: If you stack up our restaurants by vintage, it's a pretty linear chart up and to the right, and so the reality is, is these are a little bit more tenured restaurants who have had the opportunity to participate in more of those 20, soon to be 21, years of same-store sales growth.

Speaker Change: If you stack up our restaurants by vintage, it's a pretty linear chart up until the right and so the reality is these are a little bit more tenured restaurants, who have had the opportunity to participate in more of those 20 soon to be 21 years of same store sales growth.

Michael Skipworth: Great, and can you spoke about the relevance of your bangle strategy, so maybe the positioning of your bangle compared to maybe the price promotion activity that we've seen picking up from competitors. Why do you think this is a wing strategy, at least in a wing category, and are you seeing, or are you witnessing, any pricing challenges or advertising and elevated promotional challenges now denting on to your ability to track consumers, you know, reflecting on some of the meal deals that some of your competitors are doing, also on chicken sandwiches. Thank you. Yeah, our bundle strategy I wouldn't say is really anything new or reactive to the current environment. It's something that's been a part of our playbook over the years, and it allows us to, if you will, maybe do a little bit of the thinking for our guest and provide a group pack really, which there's plenty of those on our menu today, but provide a group pack that highlights that occasion that wings up plays well in. It's that group occasion two or more off-premise, and so when we do highlight bundles, it allows us to deliver on that and deliver on guest expectations.

Michael J. Skipworth: And can you talk about the relevance of your bundle strategy? So maybe the positioning of your bundles compared to maybe the price promotion activity that we've seen picking up from competitors. Why do you think this is a winning strategy, at least in the WINGS category?

Speaker Change #102: Great and can you just talk about the relevance of your bundled strategy. So maybe the positioning of your bundle compared to maybe the price promotional activity that we've seen peeking out from competitors. Why do you think this is a winning strategy at least in the weeks category and.

Michael J. Skipworth: And are you seeing or are you witnessing any pricing challenges or advertising and elevated promotional challenges now denting your ability to attract consumers, you know, reflecting on some of the meal deals that some of your competitors are doing also on chicken sandwiches? Thank you. Yeah, our bundle strategy, I wouldn't say it's really anything new or reactive to the current environment. It's something that's been a part of our playbook over the years, and it allows us to, if you will, maybe do a little bit of the thinking for our guests and provide a group pack, really, which there are plenty of those on our menu today, but provide a group pack that highlights the occasion that Wingstop plays It's that group occasion, two or more off-premise, and so when we do highlight bundles, it allows us to deliver on that and deliver on guest expectations.

Speaker Change: Are you seeing what are you witnessing any.

Speaker Change: Pricing challenges or advertising and elevated promotional.

Speaker Change: Challengers now Dan team onto your ability to attract consumers, reflecting on some of the meal deals that some of your competitors are doing most on chicken sandwiches.

Speaker Change: No.

Speaker Change: Yeah.

Speaker Change #107: Our bundled strategy I wouldn't say, it's really anything new or reactive to the current environment. It's something that's been a part of our playbook over the years and it allows us to if you will maybe do a little bit of the thinking for our guest and provided a group pack really which there's plenty of those on our menu today, but provide a group pack that.

Speaker Change: Highlights that occasion that wingstop plays well in that group occasion, two or more off premise and so when we do highlight bundles that allows us to to to deliver on that and deliver on guest expectations.

Michael Skipworth: As it relates to the competitive environment, I think as you can see with our Q2 results, there's not a lot that we're too focused on or believe we have to pivot. Quite frankly, we think the strategies we're executed against are working quite well, and we'll just continue to lean into those.

Michael J. Skipworth: As it relates to the competitive environment, I think, as you can see from our Q2 results, there's not a lot that we're too focused on or believe we have to pivot. Quite frankly, we think the strategies we're executing against are working quite well, and we'll just continue to lean into those. The next question comes from Brian Harbour from Marlon Stanley. Please go ahead.

Michael J. Skipworth: As it relates to the competitive environment I think as you can see with our our Q2 results theres not a lot that were two two focused on or believe we have to pivot quite frankly, we think the strategies were executing against our working quite well and we'll just continue to lean into those.

Speaker Change: Yeah.

Brian Harbour: The next question comes from Brian Harbour from Martin Staley. Please go ahead.

Brian James Harbour: Our next question comes from Brian <unk>.

Marlin thinly: Marlin thinly. Please go ahead.

Michael J. Skipworth: Yeah, thanks. Good morning, guys. Going from............ Maybe the obvious answer might be... What do you think about expanding the product assortment or something like that? Hey, Brian.

Brian Harbour: Yeah, thanks.

Brian James Harbour: Yeah. Thanks, good morning, guys.

Brian Harbour: Good morning, guys. Going from two to three million AUVs, what do you think is kind of, you know, most impactful of that? Maybe the obvious answer might be just what you're doing, right? But if you think about expanding product to start men or something like that, what do you think will be more material in driving that uplift?

Brian: Going from two.

Speaker Change #104: $2 million to $3 million of your views what.

Speaker Change #100: What do you think is kind of.

Marlin thinly: You know most impactful that and maybe the answer.

Speaker Change #109: It might be just what youre doing right, but if you think about expanded.

Marlin thinly: Ending product assortment or or something like that.

Speaker Change #105: Do you think will be more material in driving that uplift.

Michael Skipworth: Hey, Brian, good morning. You know, as we think about the strategies we're executing against and the line of sight we believe we have into scale in AUVs to three million dollars, if you kind of oversimplify it, it's really about opening the top of the funnel, bringing more guests in, becoming more of their consideration set in winning more occasions, which is exactly what we're doing and what we're seeing in our Q2 results. And so I don't think there's this fundamental change that we have to go chase after or do differently. And it's; that was one of the points within our prepared remarks.

Michael J. Skipworth: Good morning. As we think about the strategies we're executing against and the line of sight we believe we have into scaling AUVs to $3 million, if you kind of oversimplify it, it's really about opening the top of the funnel, bringing more guests in, becoming more of their consideration set, and winning more occasions, which is exactly what we're doing and what we're seeing in our Q2 results. And so I don't think there's this fundamental change that we have to chase after or do differently.

Brian: Hey, Brian Good morning.

Speaker Change: You know as we think about the strategies were executing against and the line of sight. We believe we have into scaling <unk> to $3 million. If you kind of oversimplify. It it's really about opening the top of the funnel, bringing more guests than becoming more of their consideration set and winning.

Brian: More occasions, which is exactly what we're doing and what we're seeing in our Q2 results and so I don't think there is this fundamental change that we have to go chase after or do differently and it's that was one of the points within our prepared remarks is really wanted to highlight just the amount of runway we have in front of us.

Michael J. Skipworth: And that was one of the points within our prepared remarks is that we really wanted to highlight just the amount of runway we have in front of us as it relates to these strategies that we're executing against. I talked earlier about brand awareness, but consider delivery as a channel. It's still roughly 30% of our sales mix. And if we benchmark delivery in more mature, heavy off-premise brands, it's north of 50%. And our awareness levels on delivery platforms are really low, so there's a ton of opportunity there. And another example is the launch of My Wingstop.

Michael Skipworth: It's really one to highlight just the amount of runway we have in front of us as it relates to these strategies that we're executing against. I talked earlier about brand awareness, but take delivery as a channel. It's still roughly 30% of our sales mix, and if we benchmark delivery and more mature, heavy off-premise brands, it's north to 50%. Our awareness levels on delivery platforms are really low. And so there's a ton of opportunity there. And another example is the launch of my Wingstop. We believe that's going to be a game changer for us, allowing us to leverage that first party data that we've invested in to really lean into hyper personalization and build that digital ordering experience that's customized for our business, which I think again, when you create ease of access and you create the best-in-class guest ordering experience, you're going to win more occasions.

Marlin thinly: As it relates to these strategies that we're executing against I talked earlier about brand awareness, but take delivery is as it is a channel it's still roughly 30% of our sales mix and if we benchmark delivery and more mature heavy off premise brands.

Michael J. Skipworth: It's north of 50% and our awareness levels on delivery platforms are really low and so there's a ton of opportunity there and another example is the launch of my Wingstop. We believe that's gonna be a game changer for us, allowing us to leverage that first party data that we've invested in to really.

Michael J. Skipworth: We believe that's going to be a game changer, allowing us to leverage that first-party data that we've invested in to really lean into hyper-personalization and build that digital ordering experience that's customized for our business. And I think, again, when you create ease of access and you create the best-in-class guest ordering experience, you're going to win more occasions. So I think, Brian, it's really about us just continuing to lean into some of the strategies that are working.

Michael J. Skipworth: Lean into hyper personalization and build that digital ordering experience that's customized for our business, which I think again when you create ease of access and you create a best in class guest ordering experience you're going to win more occasions. So I think Brian it's really about us just continuing to lean into the strategy.

Michael Skipworth: So I think, Brian, it's really about us just continuing to lean into some of the strategies that are working.

Brian: Is that are working.

Brian Harbour: Okay, thanks.

Brian: Okay. Thanks.

Michael Skipworth: You're, your highest volume stores, you know, your prior answer kind of suggested it's really just about vintage, like you've been open longer. You kind of drive higher UVs. But do they have any kind of operational advantage, in your view? Do those stores have faster service times? Are there other things you can learn from those two drive sales at some of the lower volume stores? I wouldn't say I would, there's anything I would call out, whether it's operational efficiencies or impact as it relates to those higher volumes other than they more likely than not have a more tenured team because the restaurants tenured in, and that allows some improvements in operations there.

Michael J. Skipworth: Your highest volume stores... You know, your prior answer kind of suggested that it's really just about vintage, like you've been open longer, you kind of drive higher EVs, but do they have any kind of operational advantage in your view? Do those stores have faster service times, or are there other benefits?

Brian: Your highest volume stores.

Brian: You know your prior answer kind of suggested that it's really just about the vintage like you've been open long or are you kind of drive higher UBS, but do they have any.

Brian:

Speaker Change: Kind of operational advantage in your view do those stores have faster service times or is there are there other things you can learn from those to drive sales and some of the lower volume stores.

Michael J. Skipworth: I wouldn't say there's anything I would call out, whether it's operational efficiencies or impact as it relates to those higher volumes, other than they more likely than not have a more tenured team. [inaudible] really exciting new restaurant productivity in smaller, newer emerging markets where there's this pent-up demand, which gives us a lot of confidence in our ability to continue to expand the brand and continue to grow AUVs The next question comes from Andy Barish from Jeffrey. Please go ahead. Hey guys, um... The digital sales number stayed the same.

Speaker Change: I wouldn't say, there's anything I would call out, whether it's operational efficiencies or or impact.

Michael J. Skipworth: As it relates to those higher volumes other than they more likely than not have a more tenured team.

Speaker Change: Because the restaurants tenured and and that allows some some improvements in operations there, but generally speaking it's just about the tenure of the restaurant and there's not really.

Michael Skipworth: But generally speaking, it's just about the tenure of the restaurant, and there's not really a fundamental difference.

Michael J. Skipworth: A fundamental difference and I think you know you asked about some of these higher volume restaurants were seen.

Michael Skipworth: And I think, you know, you ask about some of these higher volume restaurants. We're seeing really exciting new restaurant productivity in smaller, newer emerging markets where there's this pent-up demand, which gives us a lot of confidence in our ability to continue to expand the brand and continue to grow AUVs.

Speaker Change: Really exciting new restaurant productivity and smaller newer emerging markets, where there is this pent up demand.

Speaker Change: Which gives us a lot of confidence in our ability to continue to expand the brand and continue to grow <unk>.

Andy Barish: The next question comes from Andy Barish from Jeffrey. Please go ahead. Hey guys, the digital sales number stayed the same. I mean, it's obviously impressive at 68%, but with my Wingstop rolling out in the QQ, can you kind of help us understand why that didn't start to move that number up? I mean, maybe it wasn't expected initially, and if that so, you know, kind of how do you think it helps that glide path, you know, over the next year or so?

Speaker Change: The next question comes from Andrew Barish from Jefferies. Please go ahead.

Andrew Marc Barish: Hey, guys.

Michael J. Skipworth: I mean, it's obviously impressive at 68 plus percent. But with my Wingstop rolling out in the 2Q, can you kind of help us understand why that didn't start to move that number up? I mean, maybe it wasn't expected initially.

Andrew Marc Barish: Digital sales number stayed the same I mean, its obviously impressive at 68%, but with my Wingstop Rolling out in Q2 can you.

Andrew Marc Barish: Help us understand why that didn't start to move that number up I mean, maybe it wasn't expected initially.

Speaker Change: If that so you know kind of how do you think it helps that glide path.

Speaker Change #103: And the next year or so.

Michael J. Skipworth: And if that's so, you know, kind of how do you think it helps that glide path, you know, over the next year? Hey Andy, good morning. We did see total digital sales grow, but as a channel mix perspective, it was pretty consistent to Q1. And we're okay with that, because we saw some really strong growth in non-digital carryout, which is just the way some consumers are choosing to engage with our brand and come into the brand. And so we're pretty excited. And from a year over year perspective, we're continuing to see strength in digital sales, which we're encouraged by. My Wingstop, obviously, we completed the rollout by the end of Q2.

Andy Barish: Hey Andy, good morning. We did see total digital sales grow, but as a channel mix perspective, it was pretty consistent to Q1 and we're okay with that because we saw some really strong growth in non-digital care out, which is just the way some consumers are choosing to engage with our brand and come into the brand. And we're pretty exciting, and from a year-over-year perspective, we're continuing to see strength in digital sales, which we're encouraged by. And my Wingstop, obviously, we completed the rollout by the end of Q2, so we're excited about how this does position us to have a platform and a digital guest experience that's built for Wingstop and for our guests that we think can continue to drive digital sales growth, which to remind everybody does experience about a 20% increase in average check.

Andy: Hey, Andy good morning.

Speaker Change: We did see total digital sales grow but as a as a channel mix perspective, it was pretty consistent to Q1, and we're okay with that because we saw some really strong growth in non digital carryout.

Speaker Change: Which is just the way some consumers are choosing to engage with our brand and come into the brand and so.

Speaker Change: We're pretty excited and from a year over year perspective, we're continuing to see strength in digital sales, which we're encouraged by my Wingstop. Obviously, we completed the rollout by the end of Q2. So we're excited about how this does position us to to.

Michael J. Skipworth: So we're excited about how this positions us to have a platform and a digital guest experience that's built for Wingstop and for our guests that we think can continue to drive digital sales growth, which, to remind everybody, does experience about a 20% increase in average check. But with Wingstop, we're going to be able to lean into hyper personalization, leverage that database of over 45 million users that we've invested in and enrich that data to really drive top of mind consideration and ultimately a very personalized guest experience. I got it.

Michael J. Skipworth: To have a platform in a digital guest experience that's built for Wingstop and for our guests that we think can continue to drive digital sales growth, which to remind everybody does experience about a 20% increase in average check.

Andy Barish: But with my Wingstop, we're going to be able to lean into hyper-personalization, leverage that database of over 45 million users strong that we've invested in, and enrich that data to really drive top-of-mind consideration, then ultimately the very personalized guest experience.

Michael J. Skipworth: But with my Wingstop, we're gonna be able to lean into hyper personalization leverage that database of over 45 million users strong that we've invested in and enrich that data to really drive top of mind consideration and then ultimately they are very personalized guest experience.

Andy Barish: Thank you very much.

Speaker Change: Got it thank you very much.

Jim Celera: The next question comes from Jim Celera from Stephen's age. Please go ahead.

Michael J. Skipworth: Thank you very much. The next question comes from James Salera from Stevens Inc. Please go ahead.

Speaker Change: The next question comes from.

Speaker Change #101: <unk> from <unk>. Please go ahead.

Jim Celera: Hi guys, good morning. Thanks for taking our question. Michael, you talked about the chicken sandwich consumer skewing more towards boneless, and we've actually noticed with what seems like some increased marketing around the tender products on TV.

Michael J. Skipworth: Hey guys, good morning. Thanks for taking the time. Michael, you talked about the chicken sandwich consumer skewing more towards boneless. We've actually noticed, with what seems like some increased marketing around tender products on TV. Can you just give us an update on the tender mix and maybe what you think the potential is for tenders to kind of help you guys along the pathway to that $3 million AUV target? Hey, good morning. Yeah, the Tinder mix is actually lower than a chicken sandwich, and you're right.

Speaker Change: Hey, guys. Good morning, Thanks for taking our question.

Speaker Change: Michael you talked about the chicken sandwich consumer skewing more towards boneless.

Speaker Change: And we've actually noticed witnessed what seems like some increased marketing around the tender products on TV can you just give us an update for the <unk>.

Michael Skipworth: You just give us an update for the tender mix and maybe what you think the potential is for tenders to kind of help you guys along the pathway to that 3 million AUV target.

Speaker Change: Tender mix and maybe what you think the potential is for tenders to kind of help you guys along the pathway to that $3 million target.

Michael Skipworth: Hey, good morning. Yeah, the tender mix is actually lower than chicken sandwich, and you're right. We do see that as an opportunity, as a lever we have to pull, as an opportunity to win more tender occasions. I would say if you're seeing tenders in our advertising, it's more about just highlighting that variety and abundance that we offer at Wingstop around that indulgent occasion.

Michael J. Skipworth: We do see that as an opportunity, as a lever we have to pull, as an opportunity to win more Tinder occasions. I would say if you're seeing Tinder in our advertising, it's more about just highlighting that variety and abundance that we offer at Wingstop around that indulgent occasion. So nothing specifically targeted there, but we do see that as an opportunity to, as I mentioned before, become more of a consideration set and win more occasions, which we're pretty excited about.

Speaker Change: Hey, good morning, Yeah, the tender mix is actually lower than chicken sandwich, and Youre right. We do see that as as an opportunity as a lever we have to pool as an opportunity to win more tender occasions.

Michael J. Skipworth: I would say if youre seeing tenders in our advertising, it's more about just highlighting that that variety and abundance that we offer at wingstop around that indulgent occasion, so nothing specific or target there, but we do see that as an opportunity to as I've mentioned before.

Michael Skipworth: So nothing specific or targeted there, but we do see that as an opportunity to, as I mentioned before, become more the considerations that win more occasions, which we're pretty excited about. about.

Michael J. Skipworth: Become more of a consideration set and win more occasions, which we're pretty excited about.

Michael Skipworth: Okay, great. And historically, we viewed the Wingstop brand as maybe tilting more towards experiential value versus absolute value. But, you know, with the relative price taken versus the industry and new offerings, like chicken sandwich and like detenders, it seems like maybe it's tilting more favorably to absolute value, and that's supporting some of the strong traffic growth.

Speaker Change: Okay great.

Michael J. Skipworth: And, you know, historically, we viewed the Wingstop brand as maybe tilting more towards experiential value versus absolute value. But, you know, with the relative price taken versus the industry and new offerings, like Chicken Sandwich and like the tenders, it seems like maybe it's tilting more favorably to absolute value. And that's supporting some of the strong traffic growth. Let me just talk a little bit more about the supply chain strategy and tilting more towards an absolute value offering, again, just to support going from two to three million AUD.

Speaker Change #106: Historically, we viewed the Wingstop brand is maybe tilting more towards experiential value versus absolute value.

Speaker Change: But with the relative price taken versus the industry and new offerings like chicken sandwich and like the tenders.

Speaker Change: It seems like maybe it's tilting more favorably to absolute value and Thats supporting some of the strong traffic growth can you, maybe just talk a little bit more about the supply chain strategy.

Michael Skipworth: Let me talk a little bit more about the supply chain strategy and tilting more towards an absolute value offering, again, to support going from two to three million AUD. Yeah, I would actually say our brand positioning hasn't really changed, and I think you can kind of see that in. We've sustained, if not seen, a little bit of growth in our average check. And so, what we have seen involved over the last year or so is the consumers' desire for quality and value as they're becoming more selective about how to spend those discretionary dollars. And with Wingstop, it's about an indulgent occasion, it's about flavor and quality, and I think that's the way our food shows up.

Michael J. Skipworth: Tilting more towards an absolute value offering again to support going from $2 million to $3 million.

Michael J. Skipworth: Yeah, I would actually say that brand positioning hasn't really changed. And I think you can kind of see that in we've sustained, if not seen a little bit of growth in our average check. And so, what we have seen evolve over the last year or so is consumers' desire for quality and value as they become more selective about how to spend those discretionary dollars. And with Wingstop, it's about an indulgent occasion.

Speaker Change: Yeah, I would actually say our <unk>.

Michael J. Skipworth: <unk> positioning hasn't really changed and I think you can kind of see that and we've we've sustained if not seen a little bit of growth in our average check and so what we have seen evolve over the last year or so is the consumers' desire for quality and value is there.

Michael J. Skipworth: Becoming more selective about how to spend those discretionary dollars and with Wingstop. It's about an indulgent occasion, it's about flavor and quality.

Michael J. Skipworth: It's about flavor and quality, and I think that's the way our food shows up. And so as consumers are leaning more towards experiential and looking for a less gut feel when they do dine out, we feel like that's really helping support how our brand is positioned. And it's been a position that we've had for a long time now.

Michael J. Skipworth: And I think that's the way our food shows up and so as consumers are leaning more towards experiential.

Michael Skipworth: And so, as consumers are leaning more towards experiential and looking for less gut feel when they do dine out, we feel like that's really helping support how our brand is positioned, and it's been a position that we've had for a long time now. Great.

Michael J. Skipworth: And looking for less got Phil when they do dine out.

Michael J. Skipworth: Feel like that's really helping support how our brand is positioned and it's been our position that we've had for a long time now.

Michael J. Skipworth: Great.

Michael J. Skipworth: I appreciate the telegram. The next question comes from Jeff Farmer from Garden Rocket. Please go ahead.

Michael Skipworth: I appreciate all of you guys.

Speaker Change: Great color, guys and I'll hop back in the queue.

Jeff Farmer: The next question comes from Jeff Farmer from Garden Rockhead.

Speaker Change: The next question comes from Jeff Farmer from Gordon Please.

Jeff Farmer: Please go ahead. Morning and thanks.

Speaker Change: Please go ahead.

Alex R. Kaleida: Morning and thanks. Your very strong same-source sales numbers suggest that life's good across all markets, but several of your restaurant company peers have pointed to a material softening of demand in California. I'm just curious what the Wingstop system has seen in California regarding demand. Good morning, Jeff. This is Alex.

Jeffrey Daniel Farmer: Good morning, and thanks.

Michael Skipworth: Your very strong seems for sales numbers suggest that life's good across all markets, but several of your restaurant company peers have pointed to material softening of demand in California. I'm just curious what the Wingstop system has seen in California on the demand front. Good morning, Jeff. We see and hear some of the same comments, but I think this is a good example of Wingstop being different, and in this category of one, we deploy a streamlined operating model that allows us to have a lean roster size in the restaurant, and our brand partners were very disciplined on pricing.

Jeffrey Daniel Farmer: You're very strong same store sales numbers suggest that life's good across all markets, but.

Alex R. Kaleida: Several of your restaurant company peers have pointed to a material softening of demand in California.

Speaker Change: I'm just curious what the Wingstop system has seen in California on the demand front.

Alex R. Kaleida: Yeah, we see and hear some of the same comments, but I think this is a good example of Wingstop being different. And in this category of one, we deploy a streamlined operating model that allows us to have a lean roster size in the restaurant. And our brand partners were very disciplined on pricing they took to help offset that wage increase that they saw on April 1st. We measured results prior to the wage increase in post, and we did not see a change in our transaction growth.

Jeff: Good morning, Jeff.

Jeff: Yeah, we see and hear some of the same comments, but I think this is a good example of wingstop being different and in this category of one.

Alex R. Kaleida: We deploy a streamlined operating model that allows us to have leaner ostracize in the restaurant and our brand partners, we're very disciplined on pricing they took.

Michael Skipworth: They took to help offset that wage increase that they saw in April 1st. We measured results prior to the wage increase in post, and we did not see a change in our transaction growth. In fact, the trends in California are following a very similar trend to what we see outside of California for our business. Okay, that's helpful.

Speaker Change: To help offset that wage increase that they saw on April one.

Speaker Change: We measured results prior.

Alex R. Kaleida: So the wage increase and posts and we did not see a change in our transaction growth in fact, the trends in California are following a very similar trend to what we see outside of California for our business.

Michael J. Skipworth: In fact, the trends in California are following a very similar trend to what we see outside of California for our business. Okay, that's helpful. And just one follow-up on MyWingstop.

Speaker Change: Okay. That's helpful and just one follow up on my Wingstop.

Michael Skipworth: And just one follow-up on my Wingstop. I think some of the 150 or so test restaurants I've been operating for at this point, a couple quarters with the My Wingstop platform.

Speaker Change: I think some of the 150 or so test restaurants.

Speaker Change: I've been operating for at this point, a couple of quarters with with the my Wingstop platform.

Michael J. Skipworth: I think some of the 150 or so test restaurants have been operating for, at this point, a couple quarters with the MyWingstop platform. I'm just curious what some of the key learnings from those early 150 test restaurants are that you would be willing to share with us in terms of what you're seeing and how the consumers are responding to the MyWingstop platform. Hey Jeff,

Michael Skipworth: I'm just curious what some of the key learnings from those early 150 test restaurants are that you would be willing to share with us in terms of what you're seeing and how the consumers are responding to the My Wingstop. I would say the biggest thing I would point out as it relates to my Wingstop in the test and pilot is just the positive feedback from team members in the restaurant, from brand partners about the operational capabilities that it provides to them. And as we've talked about before, we launched a BI or Business Intelligence solution associated with my Wingstop.

Speaker Change: I'm just curious what some of the key learnings from those early.

Jeff: 150 test restaurants are.

Michael J. Skipworth: That you would be willing to share with us in terms of what youre seeing and how the consumers responding to two a month.

Jeff: Wingstop platform.

Michael J. Skipworth: You know, I would say the biggest thing I would point out as it relates to MyWingstop in the test and pilot is just the positive feedback from team members in the restaurant and from brand partners about the operational capabilities that it provides to them. And as we've talked about before, we launched a BI or business intelligence solution associated with MyWingstop that's really allowing them visibility into their business in real-time, which is helping drive over time profitability.

Jeff: Hey, Jeff.

Jeff: I would say.

Michael J. Skipworth: The biggest the biggest thing I would point out as it relates to my Wingstop in the test and pilot is is just the positive feedback from team members in the restaurants from brand partners about the operational capabilities that it provides to them and and as we've talked about before we do.

Michael J. Skipworth: Launched a beer or business intelligence solution associated with my Wingstop, that's really allowing them visibility into their business real time, that's helping drive overtime profitability, but I think from a consumer perspective. It wasn't until we completed the rollout could we launched the consumer facing experience in our <unk>.

Michael Skipworth: That's really allowing them visibility into their business real time; that's helping drive over time profitability.

Michael J. Skipworth: But I think from a consumer perspective, it wasn't until we completed the rollout could we launch the consumer-facing experience on our new web and app. And so, early days there, but we're encouraged by what we do. I appreciate that. Thank you. The next question comes from Gregory Francfort from Guggenheim. Please go ahead. Hey, thanks for the question. My question is, you guys have been making a lot of investments in the last couple years and maybe recently on behalf of the franchisees in technology, loyalty, and supply chain.

Michael Skipworth: But I think from a consumer perspective, it wasn't until we completed the rollout, could we launch the consumer-facing experience in our new web and app. And so early days there, but we're encouraged by what we see.

Michael J. Skipworth: New web and App.

Michael J. Skipworth: So early days there, but we're encouraged by what we see.

Michael Skipworth: I appreciate that. Thank you.

Michael J. Skipworth: Alright, I appreciate that thank you.

Gregory Francfort: The next question comes from Gregory Francfort from Good and High. Please go ahead.

Speaker Change: The next question comes from.

Michael J. Skipworth: Frank for from Guggenheim. Please go ahead.

Gregory Francfort: Hey, thanks for the question. My question is, he's actually been making a lot of investments the last couple years, maybe recently on behalf of the franchisees in technology, and loyalty, and supply chain. Do you feel like the current royalty and maybe fee or digital fee structure gives you the right return on investments or those investments you're making?

Gregory Ryan Francfort: Hey, Thanks for the question.

Gregory Ryan Francfort: My question is you guys have been making a lot of investments last couple years and maybe recently on behalf of the franchisees are in technology and loyalty and supply chain do you feel like the current royalty and maybe fee or digital fee structure gives you the right return on investments or those investments youre, making.

Gregory Francfort: Have you contemplated making changes to that, and how are you thinking about it? Thanks.

Michael J. Skipworth: Do you feel like the current royalty and maybe fee, or digital fee structure gives you the right return on investments or those investments you're making? Have you contemplated making changes to that, and how are you thinking about it? Hi, good morning. Yeah, it is something that we contemplate from time to time, but I'd say where you see us or where we ask for that investment among our brand partners has been centered around the opportunity to close our gap in awareness.

Gregory Ryan Francfort: Have you contemplated making changes to that and how you're thinking about it. Thanks.

Alex Kaleida: Hi, good morning. Yeah, it is something that we contemplate from time to time, but I'd say where you see us, or where we ask for that investment among our brand partners has been centered around the opportunity to close our gap and awareness and some increases in our advertising national advertising fund or, most recently, with the increase in our tech fee and the tech fund that we established as part of the my wingstop rollout. We want our, we see the opportunity for growth and we feel right now the best opportunity to maximize returns for our brand partners and shareholders is focused on the unit growth ahead for us as a brand now 6000 plus.

Michael J. Skipworth: Hi, good morning that yes. It is something that we contemplate from time to time, but I'd say, where you see us or where we asked for that investment among our partners has been centered around the opportunity to close our gap and awareness and some increases in our advertising national advertising fund or most recently with the increase.

Michael J. Skipworth: And so increases in our advertising, the national advertising fund, or most recently with the increase in our tech fee and the tech fund that we established as part of the My Wingslop rollout. We see the opportunity for growth, and we feel right now the best opportunity to maximize returns for our brand partners and shareholders is focused on the unit growth ahead for us as a brand, now 6,000 plus. Thank you. Congratulations, guys. This concludes our question and answer session, and the conference has now concluded. Thank you for attending today's presentation. You may now...

Michael J. Skipworth: And our our tech fee and the Tech fund that we established as part of the my Wingstop rollout.

Michael J. Skipworth: We want or we see the opportunity for growth and we feel right now the best opportunity to maximize returns for our brand partners and shareholders as a focus on the unit growth ahead for us as a brand now 6000 plus.

Alex Kaleida: Thank you.

Speaker Change: Thank you congrats guys.

Alex Kaleida: Congrats, guys.

Operator: This concludes our question and answer session, and the conference has now concluded. Thank you for attending today's presentation. You may now.

Michael J. Skipworth: That concludes our question and answer session and the conference has now concluded.

Michael J. Skipworth: Answer for today's presentation.

Speaker Change: You may now disconnect.