Wingstop Inc Macro Still a Drag, Waiting for Sales Inflection

Research evidence excerpt

Wingstop Inc Macro Still a Drag, Waiting for Sales Inflection

in 2H

12/26E

1Q sss of -7.5% missed Consensus (-5.6%) given continued pressure among the brand's From To % ch Cons.

core customers. Macro headwinds appear to be a large part of WING’s ongoing sales Q1 1.18 1.18 0 1.04

pressure, with 55% of the brand’s portfolio located in urban markets that skew towards Q2 1.02 1.18 15 1.04

lower & middle income households, and visit frequency for digital guests in those Q3E 1.12 1.01 -10 1.16

regions was down ~9%. Conversely, regions that skew towards higher income Q4E 1.17 1.04 -11 1.18

consumers exhibited traffic growth among digital guests. Updated guidance of down 4- 12/26E 4.50 4.41 -2 4.56

6% in '26 sss reflects pressured 1H results and ongoing macro uncertainty, including still 12/27E 5.47 5.26 -4 5.55

elevated gas prices. We believe sss should sequentially improve in 2H, modeling -5.3% 12/28E 7.01 6.79 -3 7.09

'26 sss, supported by easier comparisons and several initiatives, including: i) the Club

Dennis Geiger, CFA

Wingstop loyalty platform; ii) emphasis on providing value to core guests; iii) marketing Analyst

strategies to improve brand awareness; iv) the menu innovation pipeline; and v) benefits dennis.geiger@ubs.com

from the Wingstop Smart Kitchen. +1-212-713 9313

Club Wingstop loyalty platform successfully rolled out in 2Q, with enrollment Paul Hao

tracking 22% better than internal expectations and app downloads that are up Associate Analyst

17% since launch. Sales from loyalty members represent ~50% of 1P digital paul.hao@ubs.com

+1-201-352 1091

sales, significantly outperforming results from the pilot market. Additionally,

~70% of the enrolled loyalty members returned for a second visit, with the Nikhil Gunderia

typical user skewing lower income and younger.