Wingstop Inc. announced fiscal third quarter 2016 financial results for the period ended September 24.
Highlights for the Fiscal Third Quarter 2016 compared to the Fiscal Third Quarter 2015
Total revenue increased 14 percent to $21.8 million.
System-wide restaurant count increased 17.6 percent to 949 worldwide locations.
Domestic same store sales increased 4.1 percent.
President and chief executive officer Charlie Morrison says, “Our ‘category of one’ brand positioning and focus on unit development, revenue growth, and profitability are enabling us to deliver consistently strong quarterly performances, including a very solid third quarter. Based upon our results to date and expectations for a strong finish to the fiscal year, we are pleased to be raising our annual guidance. We opened 104 net new locations so far in 2016, and ended the fiscal third quarter with 949 restaurants worldwide, representing nearly 18 percent unit growth over the prior-year period. We now expect 145 to 155 system-wide openings in 2016, as we close in on the 1,000-unit milestone worldwide by year-end. As we march toward our 2,500-unit goal domestically, we will also continue to grow our international presence in markets that have Western brand appeal and high per capita chicken consumption. Recently, we signed a new development agreement for Colombia and Panama for 30 restaurant openings over the next five years, which like the Saudi Arabia deal announced in August, reflects the strength of our international potential.”
Fiscal Third Quarter 2016 Financial Results
Total revenue for the fiscal third quarter 2016 increased 14 percent to $21.8 million from $19.1 million in the fiscal third quarter last year.
Royalty revenue and franchise fees increased $2.1 million to $13.7 million from $11.6 million in the fiscal third quarter last year. This was primarily due to a 17.9 percent increase in the number of franchised restaurants and domestic same store sales growth of 4.1 percent.
Company-owned restaurant sales increased $0.6 million to $8.2 million from $7.5 million in the fiscal third quarter last year. The increase was the result of company-owned domestic same store sales growth of 4.8 percent and the opening of one company-owned restaurant in the Dallas area during the second fiscal quarter of 2016.
Cost of sales increased 14.3 percent to $6.1 million from $5.3 million in the prior fiscal year’s third quarter. As a percentage of company-owned restaurant sales, cost of sales increased 400 basis points to 74.7 percent from 70.7 percent. The increase was driven primarily by an increase in labor as we make investments in roster sizes and staffing to support the continued top line growth in our company-owned restaurants, as well as the ramp up of one company-owned restaurant that opened during the second fiscal quarter of 2016 as it gets to normal efficiency, offset by 1.9 percent decline in commodities rates for bone-in chicken wings as compared to the prior year period.
Selling, general and administrative expenses (SG&A) increased 21.5 percent to $8.9 million compared to $7.3 million in the prior fiscal year’s third quarter. The increase in SG&A expense is primarily due to nonrecurring costs of $1.4 million related to the refinancing of our credit agreement and subsequent dividend payout completed during the current fiscal quarter, compared to no nonrecurring expenses in the prior fiscal quarter.
Restaurant Development
As of September 24, there were 949 Wingstop restaurants system-wide. This included 882 restaurants in the United States, of which 862 were franchised restaurants and 20 were company-owned. Our international presence consisted of 67 franchised restaurants across five countries. During the fiscal third quarter 2016, there were 35 net system-wide Wingstop openings, including four international franchised locations and no closures.
