The COVID pandemic has put a spotlight on the wing category, and Wingstop has more than capitalized.

Q2 was Wingstop’s strongest quarter since its IPO in 2015, both in terms of sales and profit. Quarter-to-date, same-store sales are up 28.7 percent, which laps double-digit growth in the prior-year quarter. The company is well on its way to 17 straight years of same-store sales growth.

Other brands have recognized this trend and are trying to leverage the category’s growth in popularity. For example, in June, Chili’s parent Brinker International rolled out It’s Just Wings, a new virtual brand. Applebee’s has Neighborhood Wings and Chuck E. Cheese introduced Pasqually’s Pizza & Wings. In July, Domino’s added a new 10-piece chicken wing option to its $7.99 value platform, which is being offered through digital channels.

But the growth in competition doesn’t faze Wingstop, CEO Charlie Morrison said. The brand refers to itself as being in “a category of one,” so the chain doesn’t see any added pressure with more operators entering the space.

Morrison made the point that others flooding the wing category served as a tailwind for the brand as opposed to hurting it. While it’s certainly not fueling any of Wingstop’s current growth, more restaurants advertising wings does bring attention to the segment.

“Although chicken wings are on the menus of almost every restaurant in America, especially casual-dining players, and pizza players, they’ve had them on their menus for a long, long time,” Morrison said during Wingstop’s Q2 earnings call. “What sets us apart is the focus on quality and the authenticity of our product. Everything starts with fresh wings. We cook them to order, we hand cut potatoes to make our fries, we hand prepare every single order, and we know that’s not the case with others in the marketplace.”

“… We don’t see that as a challenge for us just because we haven’t seen that we have a true direct competitor at all in the past or going forward.”

Morrison added that Wingstop will continue to “play our playbook the way we designed it”—a strategy that makes sense given how Q2 unfolded for the brand.

U.S. same-store sales grew 31.9 percent in Q2, which is on top of a 12.8 percent increase in the year-ago quarter. Pre-COVID, delivery mixed in the mid-to-low teens, but that has since doubled. Q2 revenue increased 36.1 percent to $66.1 million. Domestic AUVs grew from $1.19 million a year ago to $1.37 million. Net income increased 134.6 percent to $11.5 million, and adjusted EBIDTA increased 54.2 percent to $20.9 million.

By the end of Q2, there were 1,436 units. Of that amount, 1,274 are domestic—1,244 franchises and 30 corporate units. There were 23 net new openings in the quarter systemwide, including 17 in June. By the end of the year, Wingstop anticipates net systemwide openings of between 120 and 130 stores. Roughly 75 percent of new stores are in fortressing markets. Most of the investment is coming from existing franchisees.

Morrison said he expects the rate of development to continue because of Wingstop’s solid pipeline.

“We do not see any challenges of access to real estate right now,” Morrison said. “If anything, given the nature of the type of real estate we like, which is other people’s B- and C+ real estate, that’s going to bode well for our traditional restaurant that we build. We have certainly recognized in this world where all occasions are off-premise that the concept of a ghost kitchen makes sense for our business.”

Wingstop has 162 international units in nine markets. The business has been adversely affected by the pandemic because of location and its lean toward casual dining. However, only seven units are closed as of Wednesday. Since the pandemic hit, Wingstop opened five new international stores in four countries.

Digital mixed 63.7 percent in Q2. The brand leveraged a free delivery promotion to add many new customers, which has aided transaction growth. Wingstop has also seen lapsed users return and a slight uptick in frequency from core customers.

“I think it’s a result of the fact that we have made such investments in our digital and delivery capabilities that it’s so easy to access our product,” said Morrison, commenting on the sustained momentum. “That product fits so well with all occasions, but more importantly, family occasions with the variety that we offer. And so I think as you look forward, that’s going to be the thing that would sustain our momentum, barring any unforeseen macro challenges that we would encounter.”

Given Wingstop’s success during the pandemic, the brand has faced little pressure to reopen dining rooms. Morrison said the company plans to keep them closed for the safety of customers and employees.

Facing the uncertainty around rising COVID cases and expiration of enhanced unemployment benefits, CFO Michael Skipworth said Wingstop feels that it’s well-positioned to navigate the various scenarios that could play out for the rest of the year. He said that customers are rewarding the chain for its quality and convenience.

“The fact that 2019 marked our 16th consecutive year of positive same-store sales growth, there’s clearly a few recessions in that range where we were able to continue to grow as a brand because guests typically use us as an indulgent occasion, and that seems to be an occasion that is less likely to give up than maybe the more frequent QSR [quick-service restaurant] visit,” Skipworth said.

Because of the company’s strong cash flow and confidence in the brand, the board of directors approved a 27 percent increase in the quarterly dividend from $0.11 to $0.14 per share, resulting in a total dividend payment of roughly $4.1 million.