Sign in Subscribe

- $WING Wingstop Earnings Analysis: Consistent same-store sales growth over 21 consecutive years.

By sagebytes in Business —

Business Model

Wingstop generates revenue primarily through franchise royalties, franchise fees, advertising fees, and company-owned restaurant sales.

Revenue Sources

  • Franchise royalties and fees from domestic and international franchised restaurants.
  • Company-owned restaurant sales from company-operated locations.
  • Advertising fees collected from franchisees.

Revenue Distribution by Channel

  • Franchise restaurants account for approximately 98% of total restaurant count.
  • Company-owned restaurants represent approximately 2% of total restaurant count.

Income Statement Analysis

  • Total revenue increased by 27.4% compared to Q4 2023, driven by system-wide sales growth and new restaurant openings.
  • Operating income increased by 40.4% year-over-year due to higher revenues and operating leverage.
  • Net income increased by 42.2% year-over-year.
  • Diluted earnings per share grew by 43.8% compared to Q4 2023.

Balance Sheet Analysis

  • Total assets increased by 89.6% year-over-year, primarily due to an increase in cash and cash equivalents.
  • Total liabilities increased by 66.7% due to higher long-term debt.
  • Total stockholders' equity remained negative and decreased further due to share repurchases.

Cash Flow Analysis

  • Cash and cash equivalents increased significantly due to strong operating cash flow and financing activities.

Capital Allocation

Management is focused on returning capital to shareholders through quarterly dividends and share repurchase programs. The company increased its quarterly dividend to $0.27 per share and authorized an additional $500 million for share repurchases.

Management Commentary

2024 results demonstrated the strength and staying power of our strategies we are executing against, translating into another record year.

We opened 349 net new restaurants, a remarkable 15.8% growth rate, demonstrating the strength of our unit economics and confidence in our strategies.

We remain confident in the strategies we are executing and the opportunities in front of us as we work towards our goal of becoming a Top 10 Global Restaurant Brand.

We did see a little bit of noise related to the unseasonal weather in the Southeast and the fires in California.

Overall Sentiment: Management expresses optimism about future growth while acknowledging some external challenges.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.