Wingstop Inc Q3 2026 Earnings Call - Domestic Sales Decline Deepens as Loyalty Program Shows Early Promise

Conference Operator: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Wingstop Inc.’s fiscal third quarter 2026 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note this conference call is being recorded today, Wednesday, October 28, 2026. On the call today are Michael Skipworth, President and Chief Executive Officer, Alex Kaleida, Senior Vice President and Chief Financial Officer, and Sarah Niehaus, Senior Director of Investor Relations. I would now like to turn the conference over to Sarah. Please go ahead.

Sarah Niehaus, Senior Director of Investor Relations, Wingstop Inc.: Thank you, and welcome to the fiscal third quarter 2026 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. Our SEC filings describe various risks that could affect our future operating results and 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. Reconciliations to comparable GAAP measures are contained in our earnings release.

Lastly, for the Q&A session, we ask that each of you please keep to one question and 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, President and Chief Executive Officer, Wingstop Inc.: Thank you, Sarah. Good morning, everyone, and thank you for joining us. I would like to start by taking a moment to recognize our brand partners, restaurant team members, and global support center team members for their continued commitment to Wingstop. We’ve asked a lot from our team this year as we’ve advanced several important strategic initiatives across our business, and I genuinely appreciate their focus, hard work and dedication. This year, we’ve made significant investments in our talent, our operations, launched our first loyalty program, and continued building capabilities that we believe will support our next phase of growth. Our top priority is improving sales performance and rebuilding transaction growth. We are moving with urgency on the actions we can control in this current operating environment. During the third quarter, domestic same-store sales declined 5.4%, below our expectations.

While we are beginning to see positive signals from the changes we have made, the improvement in sales performance is taking longer than we initially anticipated, and the macro trends we are seeing among customers have intensified over the last few months. With that in mind, we have updated our full year domestic same-store sales outlook to a decline of approximately 6.5%-7%. This does not change our focus on returning to sustained same-store sales growth, and we are confident the actions we are taking will do just that. We also are not waiting for the consumer environment to improve. We are taking deliberate action across our business to strengthen performance, drive greater guest frequency, and acquire new guests.

Over the past several quarters, as the operating environment has continued to evolve, we have continued to deepen our understanding of our guest behaviors, key choice drivers for restaurant occasions, and what Wingstop can do better to more consistently win those occasions. Last quarter, we outlined actions to sharpen our creative messaging and media mix, more clearly connecting the quality and bold flavor our guests expect with the compelling value Wingstop can deliver. As you will hear today, we are encouraged by the early response to those actions while recognizing there is more work to do. In addition to marketing, we are also intensified our focus on operations, bringing in new talent and capabilities to strengthen our execution across the business. One of the key things we have learned is that our marketing campaigns over-index on building awareness. The opportunity in front of us is around driving consideration.

We recognized that our marketing wasn’t consistently connecting our differentiated food, flavor, and value into a compelling reason to choose Wingstop, particularly around occasions where we have the greatest opportunity to win. As we discussed in our second quarter earnings call, we needed to do a better job of clearly communicating the value we offer beyond price alone while giving guests more reasons to return. We have put those insights into action by sharpening our marketing approach to drive greater consideration and acquisition, leveraging Club Wingstop and personalization to test and learn how we can deepen guest relationships and drive greater frequency and strengthen restaurant execution through Wingstop Smart Kitchen. Ultimately, our objective is to give consumers more compelling reasons to choose Wingstop more often. We are doing this by concentrating our media investment on occasions where guests’ interests and Wingstop’s relevance are the highest.

We are layering in menu, value, and promotional levers that are being amplified by more compelling creative and paid media. Most of the changes in our marketing came to life in the second week of September with the kickoff of the NFL regular season, with limited impact on our third quarter results. The initial readout suggests we are on the right track and reinforce our conviction in this strategy. I am excited to lay out more detail on our messaging approach, which we believe is beginning to gain traction with our guests. Our marketing strategy is to build reach by front-loading our video investment with more premium placements and leveraging 30-second spots. From there, we plan to sustain efficient reach and frequency through a weekly presence of 15-second spots and an always-on social strategy to keep Wingstop top of mind.

We are concentrating investments around high relevance occasions, pairing it with creative that more clearly communicates Wingstop’s quality, bold flavor, and compelling value, and sustaining engagement through paid and owned channels between those moments. We are leaning into our brand strengths, bone-in wings, flavor, and quality, while ensuring we are clearly communicating value. The response to the Watch Party Bundle and our Thursday Night Football activation suggest we are on the right path. The objective is not a short-term promotion. This is just the first step to establish with guests repeatable group occasions that build transactions, frequency, and long-term brand relevance. We are supporting this strategy with incremental investment from our G&A dollars. As we continue to execute our plan, we will continuously measure results and sharpen our marketing investment based on the data.

Flavor innovation has always been core to Wingstop’s identity and remains one of our greatest points of differentiation alongside our ranch, Seasoned Fries, and bone-in wings. We know continued innovation and product news is key to driving consideration. We are taking a more integrated approach to flavor innovation, including dedicated creative support for flavor LTOs like our recent Lemon Pepper Trio. Part of this is doubling down on what we know our customers already love, our Lemon Pepper, and giving them reasons to reengage through LTOs, which are both new and familiar at the same time. This brings me to Club Wingstop’s first-ever loyalty program. Club Wingstop is another way we can deliver additional value to our guests and keep them coming back for more. Our initial priority following the national launch in May was to build awareness and drive enrollment into the club, and we have made great progress.

Enrollment continues to pace ahead of our plan, giving us a solid foundation to where we are now focused on strategies and tactics that most effectively engage our members and drive frequency. We are seeing evidence of stronger retention among Club Wingstop members. New guests who enroll in the program are returning within 30 days at 13 points higher than non-members, a trend that has remained consistent across enrollment cohorts. There are also positive signs of behavioral changes, with purchase frequency increasing almost 20% among members who have completed a full 90 days in the program. We are building on these early learnings with initiatives designed to give members more reasons to return. Over the past several weeks, we have introduced exclusive offerings like Wing Pass, which sold out in less than one minute.

The Wingstop Watch Party Bundle punch card, merchandise drops, early access to new flavors, and unique experiences that leverage our partnerships across sports and entertainment. As we progress beyond the initial launch of Club Wingstop, our focus is now on testing and learning exactly which tactics increase purchase frequency and maximize the lifetime value of our members. When we consider the typical maturity curve for loyalty programs, we are happy with the direction of this initiative, including the early response from our most loyal guests. In September, we activated our AI-driven personalization engine, initially focusing on testing more relevant offers and messages with targeted guest segments. In those initial tests, guests receiving personalized offers generated higher total sales compared to those who did not receive offers.

This demonstrates the value of more relevant messages and the offers at the individual guest level and give us a foundation to scale this capability. As our marketing strategy drives guests to our restaurants, it is paramount that every guest who chooses Wingstop has a great experience. The Wingstop Smart Kitchen is an enabler for our back-of-house operations, and now it is up to our restaurant team members to deliver that guest experience consistently. Along with our brand partners and restaurant team members, we are laser-focused on delivering great-tasting, cooked-to-order wings, hot Seasoned Fries, and an accurate order every time. To deliver on that consistently, we have retrained the entire system in the last 3 months and established new operating standards.

We have just launched a new, more comprehensive restaurant scorecard and an operating toolkit that brings together guest feedback and restaurant performance data with a focus on food quality, order accuracy, and speed of service. We also launched an AI assistant for our field team to create quicker insights, greater clarity, and focus on performance outliers for the restaurants they support. This strengthens insights for our field teams, providing a more consistent way to identify opportunities, coach restaurant teams, and measure improvement. We recognize that consumers are making more deliberate decisions about where they spend their money. When they choose to spend that money on Wingstop, we have to deliver. They expect the quality, flavor, and experience that makes Wingstop special, and it is our responsibility to deliver on that expectation every time. That is how we earn their trust and keep them coming back, and we are making good progress.

Throughout 2026, the rate of guest complaints related to food quality and preparation declined approximately 30% compared to the same period last year. However, we know there is more work to do, and this is something that is entirely within our control. Technology has always been at the forefront of our business, and we have invested significant time and resources in our proprietary platforms and data capabilities to build what we believe is a competitive advantage for Wingstop. Today, those investments are coming together through the Wingstop Smart Kitchen, Club Wingstop, and personalization, giving us greater visibility into our business and more effective ways to serve and engage with our guests. With a dedicated chief AI officer helping lead the next phase of our AI and data strategy, we are excited about the foundation we have built and the opportunity to continue to strengthen our competitive advantage as we scale.

Technology will continue to be a long-term compounder for our business as we improve our execution. Our growth engine remains strong, supported by compelling restaurant-level economics and continued brand partner confidence in the Wingstop opportunity. During the third quarter, we opened 76 net new restaurants globally, bringing our system to 3,331 restaurants, an increase of nearly 14% year-over-year. Importantly, 98% of the restaurant openings through the first 9 months of this year came from existing brand partners, reinforcing their continued confidence in the Wingstop model and commitment to reinvesting in the brand. As we scale domestically, our enhanced market planning capabilities are allowing us to more effectively evaluate trade areas, restaurant spacing, and delivery overlap. We are seeing the benefits of that approach. During the third quarter, we made restaurant-level investments to support our strategies and protect our core consumer occasion. The underlying economics of our business remain compelling.

With domestic average unit volumes of approximately $1.8 million, our current restaurant-level model supports unlevered cash-on-cash returns of approximately 60%. These attractive returns continue to support brand partner investment in the brand, and our development pipeline remains robust with over 2,300 committed restaurants globally. Outside of the U.S., we opened 21 restaurants during the quarter, bringing our international footprint to 544 restaurants, an increase of more than 27% year-over-year. We have opened eight new markets in the last year and a half. I am excited by the response and engagement we are seeing from guests and how our brand partners are operating, and importantly, the opportunity in front of us to scale these markets. We have launched flagship restaurants in Thailand, Spain, and Italy. In August, we celebrated our 100th restaurant opening in the U.K.

India, which is a 1,000-restaurant opportunity, is our next market and is anticipated to open by early 2027. Our development opportunity is supported by attractive brand partner returns, disciplined market planning, and significant white space, both domestically and internationally. Those fundamentals give us the confidence in our ability to grow the global footprint and scale towards our long-term goal of 10,000-plus restaurants. As I wrap up, I want to reiterate that returning to sustained sales growth remains a top priority for our team. We are taking deliberate actions across the business that we believe will deliver sustained sales growth. We have an incredibly differentiated brand, compelling unit economics, a strong development pipeline, and significant white space ahead of us, both domestically and internationally. Our optimism is grounded in the early evidence we are seeing and the work still in front of us.

We will continue to execute with the discipline, speed, and determination required to deliver sustaining same-store sales growth. We are building something incredibly special at Wingstop, and I couldn’t be more confident in our ability to capture the tremendous growth opportunity ahead of us as we scale Wingstop into a top 10 global restaurant brand. Thank you. With that, I’ll turn the call over to Alex.

Alex Kaleida, Senior Vice President and Chief Financial Officer, Wingstop Inc.: Thank you, Michael, and good morning, everyone. We are making good progress in the strategies we are executing to return same-store sales to growth. We recognize we are not where we need to be. Our focus remains on sharpening our marketing execution, leveraging our new loyalty program to drive acquisition and frequency, and delivering a great guest experience. While continuing to invest in the capabilities that will support Wingstop’s long-term value creation. This includes measuring results, optimizing returns, and holding our restaurants accountable for executing our standards. During the third quarter, domestic same-store sales declined 5.4%, and we opened 76 net new restaurants, contributing to 6% system-wide sales growth totaling approximately $1.4 billion. Royalty revenue, franchise fees, and other increased 6.3% to $86.3 million. The quarterly pacing of openings reflects the timing of restaurants moving through the construction pipeline.

As we mentioned at the start of the year, we rolled out a new restaurant design, which has gradually worked its way into the construction plans and will lead to a more outsized open rate in Q4. Company-owned restaurant sales increased 6.9% to $34.8 million during the third quarter, driven by additional corporate restaurants opened or acquired since the prior year, and partially offset by a 2.7% decline in company-owned same-store sales. During the third quarter, we completed the acquisition of 13 restaurants in the Tampa market for approximately $32 million, as previously disclosed on our second quarter earning call. This acquisition provides an opportunity to drive shareholder value and expand our company-owned restaurant footprint in a new market, one that has the potential to deliver approximately 25 additional restaurants over time.

Turning to restaurant level margins, company-owned cost of sales increased 340 basis points to 78.2% of company-owned restaurant sales. The increase was primarily driven by sales deleverage on labor and other restaurant operating expenses, partially offset by lower bone and wing costs. Coinciding with our 13 restaurant acquisition, we invested in additional labor, training, and deferred maintenance expenses as we integrated the restaurants into our portfolio. We anticipate some of these incremental expenses to flow into the fourth quarter. SG&A expense decreased $200,000 to $30.5 million versus the prior year, primarily driven by a decrease of $2 million in stock-based compensation expense, which was associated with a forfeiture and offset by $1.5 million in headcount related investments. Third quarter net income was $29.1 million, or $1.07 per diluted share, compared to $28.5 million, or $1.02 per diluted share in the prior year.

There was an approximately $0.07 per diluted share impact associated with additional depreciation and amortization expense from new technology investments in the quarter, which included Club Wingstop and AI capabilities. Adjusted EBITDA, a non-GAAP measure, increased 0.5% to $64 million. Our capital allocation priorities remain unchanged. Our first priority is investing behind our strategies, which we believe generate the highest long-term returns. An example of that is our recent acquisition of 13 franchise restaurants and the opportunity to expand our corporate restaurant footprint. We also continued to return capital to shareholders through a balanced approach that includes both our quarterly dividend and share repurchase program. On October 27th, our board of directors authorized and declared a quarterly dividend of $0.33 per share of common stock, totaling $9 million, and to be paid on December 4th, 2026, to stockholders of record as of November 13th, 2026.

Additionally, during the quarter, we repurchased approximately 191,000 shares of common stock for $25 million, bringing our 2026 year-to-date repurchases to $102.9 million. As of quarter end, approximately $288.4 million remained available under our share repurchase authorization. Turning to our outlook for 2026, we updated our domestic same-store sales guidance to decline of between 6.5% and 7% for the full year, given trends in the current consumer environment and the pace with which our actions are flowing into the top line. We also updated our global unit growth outlook to a range of 440 to 450 net new restaurants for 2026, or 14.4% to 14.7% unit growth versus prior year. The updated outlook reflects a timing change in restaurant openings with the largest factor attributed to ground up shopping center locations that are experiencing more extensive timelines to complete.

We remain incredibly proud of the efforts from our support center team, regional teams, and brand partners to open new restaurants at this scale. Our development pipeline with more than 2,300 restaurant commitments remains healthy and continues to provide strong visibility into future restaurant growth. Additionally, we are updating our SG&A guidance to a range of $138 million-$140 million. This includes additional marketing investment to support the strategy Michael discussed that was not part of our prior outlook, along with lower full-year stock-based compensation expense of approximately $21 million. As you saw in our Q3 results, we have been disciplined in SG&A to manage profitability. However, in light of the market investment we anticipate making, the guidance applies a more elevated spend in SG&A during Q4, which would translate to Adjusted EBITDA below our prior expectations.

As we look ahead, our focus is on executing the strategies we put in place, building on the progress we made throughout the year, and translating those investments into stronger financial performance over time. Our highly franchised model, attractive unit level economics, and significant global restaurant opportunity provides a strong foundation for future growth. As we continue to strengthen the guest experience and give consumers more reasons to choose Wingstop, we believe we are positioned to brand and deliver sustainable growth and create long-term value for shareholders. I would like to close by thanking our restaurant team members, global support center team members, supplier partners, and brand partners for their efforts and dedication to Wingstop. With that, operator, please open the line for questions.

Conference Operator: Thank you. If you would like to ask a question, please press star then one on your telephone keypad. To remove yourself from queue, press star then two. Once again, we do ask you, please limit yourself to one question and a single follow-up. Our first question today comes from Brian Harbour with Morgan Stanley. Please go ahead.

Brian Harbour, Analyst, Morgan Stanley: Yeah. Thank you, guys. Good morning. I guess, when you talk about response to some of the recent advertising changes, is there any quantification you can give to that. You do not usually like to talk about quarter to date, but have you sort of seen a real-time response to some of that. How should we interpret those comments about responses to the change in marketing?

Alex Kaleida, Senior Vice President and Chief Financial Officer, Wingstop Inc.: Hey, Brian. Good morning, and thank you for the question. As we said in our prepared remarks, our top priority right now is to improve our sales performance and return to same-store sales growth. As we mentioned, we are taking some deliberate actions and executing on strategies we believe will help us return to growth, but they are taking time. We did reference some proof points, if you will, or some kind of signals that we are seeing in the business that we are encouraged by. I think it can relate to what we are seeing around engagement with some of the promotions we are running, like Watch Party Bundle or even our Thursday night activation, for Thursday Night Football with 30 for 30. Those types of signals that we are seeing are translating to improvements in first-party average weekly sales.

We are seeing improvement in reactivation of guests, a decline in lapsed guests, and we are seeing an uptick in organic search traffic. There are some positive signals that we are seeing that tell us we are on the right track. The strategy we are working is showing up the way we want it to, so we are continuing to remain focused on executing against that.

Brian Harbour, Analyst, Morgan Stanley: Okay. Thank you. What are your thoughts at this point on unit growth for 2027? I guess, some of the slippage this year, would you expect those to just kind of move into the first quarter of next year?

Alex Kaleida, Senior Vice President and Chief Financial Officer, Wingstop Inc.: Yeah, Brian. We are really encouraged by the pace of development and the position we are in to deliver such a strong number for 2026. The sites we called out that are associated with ground up leases, which were the biggest driver to the revision and what we expect this year, clearly those will translate to openings in 2027. What I would refer back to are some of the prior remarks we have made about how we see development overall playing out for our brand over the long term. Obviously, we sit here today with a pipeline of sold commitments of over 2,300. So a really robust and strong pipeline and really strong demand from our brand partners to grow.

But as we’ve talked about before, we expect the pace of development in the U.S., we’ve been comfortable at the level we’ve seen over the last couple of years and might expect that to even moderate a little bit. At the same time, we’re seeing really strong momentum build in our international business as we continue to launch new markets, and then those markets that we’ve launched start to scale up their pace of development. So you’ll see our international business continue to contribute to the overall unit growth rate that we’re able to deliver, which lines up really well with our long-term target, our long-term algorithm of 10% plus unit growth.

Conference Operator: Thank you. Our next question today comes from Chris O’Cull at Baird. Please go ahead.

Chris O’Cull, Analyst, Baird: Thank you. Good morning, guys. Alex, the comp guidance seems to imply fourth quarter comps down between 4.5% and 6.5%. Is the current trend within that range, and do you believe you’ve built in maybe some conservatism? Then I had a follow-up.

Alex Kaleida, Senior Vice President and Chief Financial Officer, Wingstop Inc.: Hey, Chris. Yeah, thanks. One of the things we did mention was just the backdrop we’re operating in with this volatile consumer environment. So we did contemplate how we thought about current trends there, as well as the confidence we have and the strategies we’re executing that lead us down that path to return to growth. So I think we certainly want to deliver and have a high degree of confidence in our guidance for the quarter. We know how trends are progressing through the quarter and some of the proof points Michael mentioned that give us the confidence to hit that guidance.

Chris O’Cull, Analyst, Baird: Okay, thanks. I know you are not guiding to 2027 today, but how should we think about next year’s comp setup? Comparisons get easier, but the calendar turning does not necessarily change the underlying trend, especially as you mentioned, your core consumer is still under some pressure. So how should we balance those factors as we are thinking about building our models for next year?

Michael Skipworth, President and Chief Executive Officer, Wingstop Inc.: Yeah, Chris, this is Michael. I would just tie back to the comments we made around, we are taking deliberate actions to help position us to return to growth. We acknowledge that those are going to take some time. But we are sharpening our creative and messaging. We are leaning into our brand strengths, bone-in wings, flavor, quality, and the value that Wingstop can deliver. We are supporting that by a stronger media mix. We are focusing our investments around occasions where Wingstop is highly relevant. We are layering in menu value and promotional levers amplified by creative and paid media. We think all of that is really supporting the signals that we are seeing and putting us on a path we believe to return to same-store sales growth.

It is not a promotion, it is not a quick fix, but this is something we think will set us up to deliver sustained same-store sales growth over time.

Conference Operator: Thank you. Our next question today comes from Andy Barish at Jefferies. Please go ahead.

Andy Barish, Analyst, Jefferies: Yeah, quick one, Alex, just on the Adjusted EBITDA comments at the end of your prepared remarks. Should we think about that like the third quarter, flattish on a year-over-year basis?

Alex Kaleida, Senior Vice President and Chief Financial Officer, Wingstop Inc.: Yeah, I think you can see what it implies based on that step-up in G&A investment, which includes the additional marketing that we’re going to infuse into the plan for the fourth quarter. So I think you’d be pretty close modeling it that way.

Andy Barish, Analyst, Jefferies: Okay. On the delivery channel, I know you’ve been doing work all year and in a variety of ways with 3PD. Can you just give us a sense of how that channel is behaving and obviously, moving into a more important seasonal period with football and weather and stuff like that?

Michael Skipworth, President and Chief Executive Officer, Wingstop Inc.: Yeah, Andy, this is Michael. I think the delivery channel is another great example of where we talked about some of the things we’ve learned and we’ve analyzed earlier in the year, and the actions that we’re taking. One of the things that was pretty clear in the first half of the year was just the level of intensity around offers on these platforms. But we’ve taken a very intentional approach we think is effective around while we’re increasing the frequency of our offers, we’re doing it in a very targeted way that’s driving consideration. And really what we’re seeing is that strategy’s proven to be effective for us.

Conference Operator: Thank you. Our next question today comes from Sara Senatore with Bank of America. Please go ahead.

Sara Senatore, Analyst, Bank of America: Hi. Yes. I guess maybe two quick questions. One is, on the unit growth, if you could just talk a bit about the franchisee. It sounds like some of this is just timing. But returns, while still very, very high, have come down a bit. Are you seeing any kind of change in franchisee approach to development? Anything that suggests that they are pushing things out or how you are identifying sites, maybe the sites that they are bringing to you, what you are approving? Just any thoughts on the change and if there is one in the development strategy. Then you mentioned marketing, focusing on guest interest and Wingstop relevance where they are highest. I know in the past you have talked about maybe bringing in new customers, like with sandwiches. Is that something maybe you are evolving away from, really going back to the core? Or is this something where you can do both?

It seems like the language is a bit different from maybe what we have heard in the past. Thank you.

Michael Skipworth, President and Chief Executive Officer, Wingstop Inc.: Good morning, Sara. Thank you for the question. Let me hit on the development one first. As I mentioned earlier, obviously we are pretty proud to be on a pace of opening, call it roughly 450 restaurants this year. I think there is a few things at play that have impacted how the year has played out, the cadence of openings. We talked earlier this year about a new restaurant design that we launched that we are really excited about, and I think our brand partners share that excitement. That has influenced a little bit of the cadence throughout the year as anything that was in the pipeline or new sites, we are making sure we are incorporating that new restaurant design into those. The other thing I would point to is our market level playbooks that you have heard us reference before that are trade area specific.

In addition to that, identifying the schedule or timing of when restaurants are opened in each market underneath that playbook. That’s proven to be working out really well. We’re obviously, as we said in our prepared remarks, we’re measuring any levels around demand in that area, as well as any associated impact. Those are running at levels well below what we’ve seen historically. The playbooks are working out really well. We just came off of our annual brand partner convention just a couple of weeks ago. On your question about brand partner sentiment, I guess an example that I would share with you is the fact the sentiment was pretty positive from brand partners. Obviously, as you mentioned, the returns are still really strong. The demand for growth is still really strong.

I even had a handful of brand partners hand me presentations, if you will, that were pitches around asking for more development and more growth. I think you see that show up in the pipeline of sold commitments that we were able to reference in our prepared remarks of over 2,300 as we sit here today. As it relates to our marketing strategy, obviously we’ve talked about our core guests and how a priority of ours is to focus on and protect our core guests. Also it’s about making sure that we’re leaning into our brand strengths, and showing up in a big way because, what we acknowledged earlier in the year was our marketing was, if you will, a little bit overly focused on brand awareness and not focused enough or the opportunity that we really saw was around driving consideration.

That ties back to not just those occasions that we’re leaning into where Wingstop is highly relevant, but it’s also making sure that we’re connecting our food flavor and value into a compelling reason for consumers or for guests to choose Wingstop. We’re obviously taking a balanced approach, and we still see a huge opportunity around new guest acquisition, and that’s part of how we’re deploying and investing those media dollars that I referenced earlier in our prepared remarks. I think the combination of those two things, and it’s those early signals that we’re seeing really tell us that we’re on the right track here, and we’re just going to continue to focus on, measure the results and pivot where we need to, but continue to execute as we march towards returning to sales growth.

Conference Operator: Thank you. Our next question today comes from Jim Salera at Stephens Inc. Please go ahead.

Jim Salera, Analyst, Stephens Inc.: Hey, guys. Good morning. Thanks for taking our question. I wanted to talk a little bit about the franchisee margins. You guys mentioned you started to step up a little bit in the marketing on the value side. On one hand, I am assuming the traffic declines are a headwind, but then at the same time, we have seen chicken prices come down significantly. Could you just give us an update on where the franchisee margins sit relative to maybe where we have been over the past couple of years, and how that interplays with the step up in the value messaging?

Alex Kaleida, Senior Vice President and Chief Financial Officer, Wingstop Inc.: Hey, Jim, this is Alex. Good morning. I would say we are optimistic about where margins will lead us into in 2027. We are actually going through the mechanics now on projecting out and negotiating our pricing arrangements for our poultry purchases and are very encouraged by the market dynamics that we see in front of us. We believe that we will either be at or slightly below what our full year food cost could be for this year. I think margins are an opportunity for us. One of the steps we took, and you can kind of see some of this in our corporate restaurant margins is some investments we made on value, whether it is a heightened focus on our classic wing, our bundles with 30 for 30 or Watch Party Bundle that we have out there.

We strengthen our value proposition through our Club Wingstop platform, which we see as we make great progress on driving enrollment, but you are going to see us start to shift into more frequency centric drivers and strategies that we will deploy through that platform to help, again, strengthen the value proposition for both our core guests and new guests alike. Separately, I do want to address in our corporate restaurant margins during the quarter, we did have some acquisition related impacts related to our largest acquisition to date of 13 franchise restaurants. We made some investments in labor training and maintenance expenses that we believe will carry in. That is unique to our corporate footprint, not something that you would see translate the same way in the franchise restaurants.

Jim Salera, Analyst, Stephens Inc.: Great. I appreciate all that detail. One follow-up just on the guest composition as you have changed some of the marketing messaging. Have you noticed if you are able to identify new guests that are coming in based off the value focused messaging that are either lapsed guests or perhaps new to the brand?

Michael Skipworth, President and Chief Executive Officer, Wingstop Inc.: Yeah, I think there’s a couple elements to answer that question. Obviously, I referenced we’re seeing really encouraging results around reactivation of guests. I would say we’re also seeing, as Alex mentioned earlier, some really positive signals within Club Wingstop. We’re seeing new guests who sign up for Club Wingstop returning and engaging with the brand in the next 30 days at a much higher rate. I would say we’re seeing a balance of kind of both of those new guests as well as reactivation of guests that are really encouraging, and again, point to some of those signals that we referenced that tell us we’re on the right track here and we’re continuing to focus and execute against the right strategy.

Conference Operator: Thank you. Our next question today comes from Margaret Binshtok with Wolfe Research. Please go ahead.

Margaret Binshtok, Analyst, Wolfe Research: Good morning, guys. Thanks for taking my question. I just wanted to ask a little bit on the integrated approach to flavor that you guys talked about with some of the creative support for LTOs like Lemon Pepper Trio. Can you give us some more color on what that support looks like and how Lemon Pepper Trio performed with it? How we should think about flavor cadence going forward and that integration with Club Wingstop. Thank you.

Michael Skipworth, President and Chief Executive Officer, Wingstop Inc.: Good morning, and thank you for the question. Flavor is something that I think Wingstop has definitely earned the right to play in and to win in with consumers. What we did with Lemon Pepper Trio, I think is a great example of how we’re evolving our approach and the actions that we’re taking. What we’ve done differently with Lemon Pepper Trio is one thing is we leaned into an equity of the brand, our Lemon Pepper, and made a play on that was something that obviously our consumers know and love, but then we were able to introduce innovation around that. We supported that with dedicated creative around Lemon Pepper Trio and included that in our media strategy. That’s a bit of a different approach for us. Obviously integrating that through the right level of support through paid and social.

I do think you will see us continue to lean into that playbook, which again, those early results and signals are encouraging. Lemon Pepper Trio performed really well for us. We do have additional flavor innovation coming down the pipeline for the balance of this year and then obviously into 2027 as well. Just this weekend, and this week, you have an opportunity to try a really unique flavor that may sound a little odd at face value, Sour Patch Kids wing flavor, but it is actually incredibly delicious. I would encourage you all to go out and try it, but it is a way for us to innovate with flavor, create some new news for our guests. As we mentioned in our remarks, newness, innovation, those are things that really drive consideration, and that is that opportunity we have in front of us.

Margaret Binshtok, Analyst, Wolfe Research: Thank you.

Conference Operator: Thank you. Our next question today comes from Gregory Francfort at Guggenheim Securities. Please go ahead.

Gregory Francfort, Analyst, Guggenheim Securities: Hey, my question is on the value marketing. I just pulled up the app, and you guys have two buckets of what you are marketing, which is $8-$10 kind of individual bundles and $22-$28 group bundles. I look at your competitors, and a lot of what they are doing are either individual offerings where maybe the price points are lower, or when they do groups, maybe there is more side options or more attached than just fries. I guess, how much has the $22-$28 bundles, where it is a ton of protein but maybe just with fries, resonated with consumers? Do you think you need to go after maybe more or shift the marketing towards more individual focus or add more side options? I am just trying to figure how this might evolve from here and what options you have. Thanks.

Michael Skipworth, President and Chief Executive Officer, Wingstop Inc.: Yeah, Greg, it’s a great question. I think you’re hitting on exactly some of those things we called out from our last call that were some of the learnings that we gathered and the actions we said we were going to take, and those are the deliberate actions that we took. We saw messaging and clearly communicating value as an opportunity for us, and you’re seeing that come to life in the creative that we have out there today. I referenced that Watch Party Bundle and the strong performance we’ve seen with that. We were very intentional, while it is a group pack and serves up to four people, we were intentional around the messaging on that value that we can deliver on a per person basis. The messaging includes that $7 per person.

If you’re logged into our app, you’re probably seeing things that are very targeted, and that’s a little bit of what we can do with the database that we have and how we’ve enriched that data. Obviously, as we think about Club Wingstop and the opportunity we have there, we can be very targeted with value messaging and deliver value, I think, in a very personalized way. In certain instances, it could be an individual occasion, and in others, it is a group pack, but I think it really depends on the guests and their profile and how they typically engage with our brand. We’re going to measure all of these things and continue to sharpen our strategy as we continue to execute through the balance of the year.

Alex Kaleida, Senior Vice President and Chief Financial Officer, Wingstop Inc.: Greg, this is Alex. Just to add too, you’re bringing up a great example of what we can accomplish with personalization, because on my webpage has a different item featured and flavor featured because of what we know about our guests. We can also enable that capability with our CRM campaigns, and it could be centered around flavor, it could be an individual occasion, it could be targeting a dinner group occasion for that guest based on what we know and understand about this. We’ve really deepened the knowledge of how to execute against this, and it’s a component of an action we took alongside of Club Wingstop to really unlock this personalization engine we’ve been able to build.

Conference Operator: Thank you. Our final question today, I apologize, comes from Danilo Gargiulo with Bernstein. Please go ahead.

Danilo Gargiulo, Analyst, Bernstein: Great. Michael, I wanted to ask you about the state of operations. Very encouraging that you are saying that some complaints have gone down across the system. I was wondering the opportunities that you had ahead. In other words, where do you see the complaints from customers actually going up, and therefore, they represent an opportunity for you to be deploying some actions to address those?

Michael Skipworth, President and Chief Executive Officer, Wingstop Inc.: Hey, Danilo, thank you for the question, and good morning. I would maybe start answering your question with just calling out Wingstop Smart Kitchen and just how much of a game changer that has been for us. This has really elevated the level of visibility that we have into our operations, and it has identified, if you will, incremental opportunities for us to continue to sharpen our execution within the four walls of the restaurant. That is what we have been focused on, and we did allude to the fact that we are seeing and measuring some really encouraging improvements, a reduction in incidences around food quality and preparation over recent months. We also shared the fact that we have launched a new scorecard.

This scorecard that we have launched, it is really about measuring the right things. Those are the things that really tie directly to that guest experience, which we talked about how important that is, and in this environment in particular, how every guest experience has to be delivered at a high level so that we can win over and retain those guests. I would say the other opportunities that we see, and this is really what we are focused on, is just really around accuracy. That is something we spent a lot of time with our brand partners talking about at our convention that we just had. This new scorecard is focused around ensuring we make progress there.

The results we see today and the opportunity that is in front of us, we are really encouraged by that and feel like we are on a really strong foot and headed in the right direction.

Danilo Gargiulo, Analyst, Bernstein: Thank you. Danilo, if you do not mind, I would love to hear your thoughts more strategically on how the landscape of the restaurant delivery business is changing with Walmart making an enter. Perhaps if you can share your thoughts on under what circumstances you will be considering partnering with Walmart, whether this is going to be expanding your TAM on the delivery side, given that this continues to be a big opportunity for you. Thank you.

Michael Skipworth, President and Chief Executive Officer, Wingstop Inc.: Yeah, Danilo, that is a great question. I think delivery continues to have a long runway for growth for Wingstop in particular. I think we have demonstrated this over the year. We are better positioned than most brands to win off-premise occasions. If there is an opportunity for us as it relates to winning more share and optimizing our economics on the delivery channel with something like what Walmart has launched, I think it is clearly something that we will evaluate. We continue to see this channel as a strategic channel for us and an opportunity for us to continue to win share and drive growth. I think obviously more competition should be better in the end for brands and I think for consumers as well.

Conference Operator: Thank you. That does conclude our question and answer session and our conference for today. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.