Wingstop Inc
For the period ended Dec 28, 2024. Filed Feb 19, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 19, 2025
WING$163.28-1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-30; filed 2024-02-21.
0001636222-24-000011
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-28; filed 2025-02-19.
0001636222-25-000008
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 94 current paragraphs.
51 unchanged; 34 reworded; 9 added; 19 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
•System-wide sales increased 36.8% over the prior fiscal year to $4.8 billion;
Current report
•Domestic same store sales increased 19.9% over the prior fiscal year;
Current report
•Company-owned domestic same store sales increased 7.7% over the prior fiscal year;
Current report
•Total revenue increased 36.0% over the prior fiscal year to $625.8 million;
Current report
(c) System implementation costs represent non-recurring expenses incurred related to the development and implementation of new enterprise resource planning and human capital management technology, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.
Current report
Company-owned restaurant sales increased $24.0 million, of which $16.0 million was related to company-owned same store sales growth of 7.7%, driven primarily by an increase in transactions, and $8.0 million was primarily related to company-owned restaurants opened and acquired during fiscal year 2024.
Current report
Interest expense, net was $21.3 million in fiscal year 2024, an increase of $3.1 million, or 16.8%, compared to $18.2 million in the prior fiscal year. The increase was primarily driven by less interest income earned during fiscal year 2024 due to higher cash balances during fiscal year 2023.
Current report
On December 9, 2024, the Company entered into an accelerated share repurchase agreement (the “2024 ASR Agreement”) with a third-party financial institution to repurchase $250.0 million of the Company’s common stock under its Share Repurchase Program. Pursuant to the ASR Agreement, during the fiscal fourth quarter of 2024 the Company made an initial payment to the financial institution of $250.0 million in cash and received and retired an initial delivery of 551,325 shares of common stock, representing an estimated 75% of the total shares expected to be delivered under the ASR Agreement, based on the closing price on the date of initial delivery of $328.54. The delivery of any remaining shares will occur at the final settlement of the transactions under the ASR Agreement, which is scheduled to occur in the fiscal first quarter of 2025. The number of shares to be delivered upon final settlement is based on the daily volume-weighted average share prices during the valuation period specified in the ASR Agreement, less a discount and subject to adjustments.
Current report
During fiscal year 2024, the Company repurchased and retired 720,804 shares at an average share price of $339.95, inclusive of the shares repurchased under the 2024 ASR Agreement. During fiscal year 2023, the Company repurchased and retired 645,952 shares at an average share price of $193.51 under the 2023 ASR Agreement. As of December 28, 2024, $311.1 million remained available under the Share Repurchase Program. Since the inception of the Company’s share repurchase program in August 2023, the Company has repurchased and retired 1,366,756 shares of its common stock at an average price of $272.89 per share.
Removed paragraphs (19)
Previous report
Change in Presentation
Previous report
Beginning in the first quarter of 2023, gains and losses on disposal of assets are no longer presented as an adjustment to EBITDA or Net income in our calculation of Adjusted EBITDA, Adjusted net income, and Adjusted earnings per diluted share. EBITDA, Adjusted EBITDA, Adjusted net income, and Adjusted earnings per diluted share are non-GAAP measures and are defined below. Prior period gains and losses on disposal of assets have been excluded from these measures to conform to the current presentation. This reclassification had no impact on operating income, balance sheets or statements of cash flows.
Previous report
•System-wide sales increased 27.1% over the prior fiscal year to $3.5 billion;
Previous report
•Domestic same store sales increased 18.3% over the prior fiscal year;
Previous report
•Company-owned domestic same store sales increased 8.2% over the prior fiscal year;
Previous report
•Total revenue increased 28.7% over the prior fiscal year to $460.1 million;
Previous report
•Adjusted net income and adjusted earnings per diluted share, both non-GAAP measures, increased 36.0% to $74.1 million, or $2.48 per diluted share, compared to $54.5 million, or $1.82 per diluted share in the prior fiscal year; and
Previous report
(1) The fiscal year ended December 31, 2022 benefited from a 53 rd week as compared to fiscal 2023.
Previous report
Adjusted Net Income and Adjusted Earnings Per Diluted Share. We define Adjusted net income as net income adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and related tax adjustments that management believes are not indicative of the Company’s core operating results or business outlook over the long-term. We define Adjusted earnings per diluted share as Adjusted net income divided by weighted average diluted share count. For a reconciliation of net income to Adjusted net income and for further discussion of Adjusted net income and Adjusted earnings per diluted share as non-GAAP measures and how we utilize them, see footnote 3 below.
Previous report
(2)Fiscal 2022 included a 53 rd week; same store sales percentages were calculated excluding the 53 rd week.
Previous report
(4) Adjusted net income and adjusted earnings per diluted share are supplemental measures of operating performance that do not represent and should not be considered alternatives to net income and earnings per share, as determined by GAAP. These measures have not been prepared in accordance with Article 11 of Regulation S-X promulgated under the Securities Act. Management believes adjusted net income and adjusted earnings per diluted share supplement GAAP measures and enable management to more effectively evaluate the Company’s performance period-over-period and relative to competitors.
Previous report
The following table reconciles net income to adjusted net income and calculates adjusted earnings per diluted share for the fiscal years ended December 30, 2023 and December 31, 2022 (in thousands):
Previous report
(a) Represents costs and expenses related to our 2022 securitized financing facility and payment of a special dividend, as well as the extinguishment of our 2020 variable funding note facility; all transaction costs are included in Loss on debt extinguishment and financing transactions during the year ended December 31, 2022, with the exception of $310,000 that is included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.
Previous report
(c) Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an assumed effective tax rate of 24% for the periods ended December 30, 2023 and December 31, 2022, which includes provisions for U.S. federal income taxes, and assumes the respective statutory rates for applicable state and local jurisdictions.
Previous report
Company-owned restaurant sales increased $15.9 million primarily due to an increase of $10.3 million related to the increase in the number of company-owned restaurants as compared to the prior fiscal year, as well as an increase of $7.1 million related to company-owned same store sales growth of 8.2%, which was driven by an increase in transactions. These increases were partially offset by approximately $1.5 million in sales from the 53 rd week in the prior fiscal year.
Previous report
Interest expense, net was $18.2 million in fiscal year 2023, a decrease of $3.0 million, or 14.1%, compared to $21.2 million in the prior fiscal year. The decrease was due to $3.9 million of additional interest income earned during fiscal year 2023, as well as approximately $0.4 million in interest expense related to the 53 rd week in the prior fiscal year. These decreases were partially offset by an increase in interest expense related to the securitized financing transaction completed on March 9, 2022, which increased our outstanding debt by $250 million.
Previous report
Loss on debt extinguishment and financing transactions
Previous report
Loss on debt extinguishment and financing transactions was $0.8 million during fiscal year 2022 due to costs and fees associated with the extinguishment of our 2020 variable funding note facility on March 9, 2022.
Previous report
Our primary sources of short-term and long-term liquidity are expected to be cash flows from operations and available borrowings under our 2022 Variable Funding Notes (defined below). As of December 30, 2023, the Company had $119.7 million of cash and cash equivalents on its balance sheet, including advertising fund cash and cash equivalents.
Reworded paragraphs (34)
Previous wording
We operate on a 52- or 53-week fiscal year ending on the last Saturday of each calendar year. Our fiscal quarters are comprised of 13 weeks, with the exception of the fourth quarter of a 53-week year, which contains 14 weeks. Fiscal year 2023 contains 52 weeks, while fiscal year 2022 contains 53 weeks.
Current wording
We operate on a 52- or 53-week fiscal year ending on the last Saturday of each calendar year. Our fiscal quarters are comprised of 13 weeks, with the exception of the fourth quarter of a 53-week year, which contains 14 weeks. Fiscal years 2024 and 2023 each contain 52 weeks, while fiscal year 2022 contains 53 weeks.
Previous wording
Wingstop is the largest fast casual chicken wings-focused restaurant chain in the world and has demonstrated strong, consistent growth. As of December 30, 2023, we had a total of 2,214 restaurants in our system. Our restaurant base is 98% franchised, with 2,165 franchised locations (including 288 international locations) and 49 company-owned restaurants as of December 30, 2023. We generate revenues by charging royalties, advertising fees and franchise fees to our franchisees and by operating a number of our own restaurants.
Current wording
Wingstop is the largest fast casual chicken wings-focused restaurant chain in the world and has demonstrated strong, consistent growth. As of December 28, 2024, we had a total of 2,563 restaurants in our system. Our restaurant base is 98% franchised, with 2,513 franchised locations (including 359 international locations) and 50 company-owned restaurants as of December 28, 2024. We generate revenues by charging royalties, advertising fees and franchise fees to our franchisees and by operating a number of our own restaurants.
Previous wording
We plan to grow our business by opening new franchised restaurants and increasing our same store sales, while leveraging our franchise model to create shareholder value. Domestic same store sales have increased for 20 consecutive years beginning in 2004, which includes 5-year cumulative domestic same stores sales growth of 62.2% since the beginning of fiscal year 2019. We believe our asset-light, highly-franchised business model generates strong operating margins and requires low capital expenditures, creating shareholder value through strong and consistent operating cash flow and capital-efficient growth.
Current wording
We plan to grow our business by opening new franchised restaurants and increasing our same store sales, while leveraging our franchise model to create shareholder value. Domestic same store sales have increased for 21 consecutive years beginning in 2004, which includes 3-year cumulative domestic same stores sales growth of 41.6% since the beginning of fiscal year 2022. We believe our asset-light, highly-franchised business model generates strong operating margins and requires low capital expenditures, creating shareholder value through strong and consistent operating cash flow and capital-efficient growth.
Previous wording
•System-wide restaurant count increased 13.0% over the prior fiscal year to a total of 2,214 worldwide locations, driven by 255 net unit openings;
Current wording
•System-wide restaurant count increased 15.8% over the prior fiscal year to a total of 2,563 worldwide locations, driven by 349 net unit openings;
Previous wording
•Digital sales increased to 67.0% of system-wide sales;
Current wording
•Digital sales increased to 70.3% of system-wide sales;
Previous wording
•Domestic AUV increased to $1.8 million;
Current wording
•Domestic AUV increased to $2.1 million;
Previous wording
•Net income increased 32.5% over the prior fiscal year to $70.2 million, or $2.35 per diluted share, compared to $52.9 million, or $1.77 per diluted share in the prior fiscal year;
Current wording
•Net income increased 54.9% over the prior fiscal year to $108.7 million, or $3.70 per diluted share, compared to $70.2 million, or $2.35 per diluted share in the prior fiscal year; and
Previous wording
•Adjusted EBITDA, a non-GAAP measure, increased 36.1% to $146.5 million, compared to adjusted EBITDA of $107.6 million in the prior fiscal year.
Current wording
•Adjusted EBITDA, a non-GAAP measure, increased 44.8% to $212.1 million, compared to adjusted EBITDA of $146.5 million in the prior fiscal year.
Previous wording
EBITDA and Adjusted EBITDA. We define EBITDA as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization. We define Adjusted EBITDA as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization, with further adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and stock-based compensation expense. For a reconciliation of net income to EBITDA and Adjusted EBITDA and for further discussion of EBITDA and Adjusted EBITDA as non-GAAP measures and how we utilize them, see footnote 2 below.
Current wording
EBITDA and Adjusted EBITDA. We define EBITDA as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization. We define Adjusted EBITDA as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization, with further adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, system implementation costs, and stock-based compensation expense. For a reconciliation of net income to EBITDA and Adjusted EBITDA and for further discussion of EBITDA and Adjusted EBITDA as non-GAAP measures and how we utilize them, see footnote 2 below.
Previous wording
(1)The percentage of system-wide sales attributable to company-owned restaurants was 2.8% and 2.9% for the fiscal years ended December 30, 2023 and December 31, 2022, respectively. The remainder was generated by franchised restaurants, as reported by our franchisees.
Current wording
(1)The percentage of system-wide sales attributable to company-owned restaurants was 2.5% and 2.8% for the fiscal years ended December 28, 2024 and December 30, 2023, respectively. The remainder was generated by franchised restaurants, as reported by our franchisees.
Previous wording
(3)EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). EBITDA and Adjusted EBITDA should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. These should not be viewed as an alternative to cash flows from operating activities as a measure of our liquidity.
Current wording
(2)EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). EBITDA and Adjusted EBITDA should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. These should not be viewed as an alternative to cash flows from operating activities as a measure of our liquidity.
Previous wording
Due to these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only as performance measures and only supplementally. As noted in the table below, Adjusted EBITDA includes adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, and stock-based compensation expense. We believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our restaurants, and complicate comparisons of our internal operating results and operating results of other restaurant companies over time. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below help management measure our core operating performance over time by removing items that are not related to day-to-day operations.
Current wording
Due to these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only as performance measures and only supplementally. As noted in the table below, Adjusted EBITDA includes adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, system implementation costs, and stock-based compensation expense. We believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our restaurants, and complicate comparisons of our internal operating results and operating results of other restaurant companies over time. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below help management measure our core operating performance over time by removing items that are not related to day-to-day operations.
Previous wording
(a) Represents costs and expenses related to our 2022 securitized financing facility and payment of a special dividend, as well as the extinguishment of our 2020 variable funding note facility; all transaction costs are included in Loss on debt extinguishment and financing transactions during the year ended December 31, 2022, with the exception of $310,000 that is included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.
Current wording
(a)Represents costs and expenses related to our 2024 securitized financing facility; all transaction costs are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.
Previous wording
(b)Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete, project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income. Fiscal year 2022 includes approximately $0.5 million of third-party consulting fees incurred relating to a strategic initiative to consider the development of a business plan and financial model for potential vertical integration of a poultry complex, which review was completed in fiscal year 2022. Fiscal years 2023 and 2022 include approximately $5.2 million and $0.4 million, respectively, in consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, and which review was completed in fiscal year 2023. Given the magnitude and scope of these two strategic review initiatives that are not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiatives not reflective of the ongoing costs to operate its business.
Current wording
(b)Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete, project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income. Fiscal year 2023 includes approximately $5.2 million in consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, and which review was completed in fiscal year 2023. Given the magnitude and scope of this strategic review initiative that is not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiative not reflective of the ongoing costs to operate its business.
Previous wording
During fiscal year 2023, total revenue was $460.1 million, an increase of $102.5 million, or 28.7%, compared to $357.5 million in the prior fiscal year.
Current wording
During fiscal year 2024, total revenue was $625.8 million, an increase of $165.8 million, or 36.0%, compared to $460.1 million in the prior fiscal year.
Previous wording
Royalty revenue, franchise fees and other increased $48.5 million, of which $25.6 million was due to domestic same store sales growth of 18.3%, and $16.5 million was due to net new franchise development since December 31, 2022. Other revenue increased by $4.2 million primarily due to an increase in vendor rebates. These increases were partially offset by approximately $3.0 million in royalties from the 53 rd week in the prior fiscal year.
Current wording
Royalty revenue, franchise fees and other increased $81.3 million, of which $36.1 million was due to domestic same store sales growth of 19.9%, and $29.9 million was due to net new franchise development since December 30, 2023. Other revenue increased by $7.2 million primarily due to an increase in vendor rebates.
Previous wording
Advertising fees increased $38.1 million, of which$34.6 million was due to a 27.1% increase in system-wide sales during fiscal year 2023, and $6.2 million was due to an increase in the national advertising fund contribution rate to 5% from 4% effective the first day of the fiscal second quarter 2022. These increases were partially offset by approximately $2.7 million in advertising fees from the 53 rd week in the prior fiscal year.
Current wording
Advertising fees increased $60.5 million, of which $51.0 million was due to a 36.8% increase in system-wide sales during fiscal year 2024, and $9.5 million was due to an increase in the national advertising fund contribution rate to 5.3% from 5.0% effective the first day of the fiscal second quarter 2024.
Previous wording
Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 33.1% in fiscal year 2023 compared to 38.3% in the prior fiscal year. The decrease is primarily due to a 27.1% decrease in the cost of bone-in chicken wings as compared to the prior year period.
Current wording
Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 36.2% in fiscal year 2024 compared to 33.1% in the prior fiscal year. The increase is primarily due to a 43.0% increase in the cost of bone-in chicken wings as compared to the prior year period. Our purchases in the prior fiscal year period were tied primarily to the spot market, which benefited from significant deflation in the cost of bone-in chicken wings. During fiscal year 2024, we were able to move the majority of our purchases of bone-in chicken wings away from the spot market to provide more predictable food cost.
Previous wording
Labor costs as a percentage of company-owned restaurant sales were 24.0% in fiscal year 2023 compared to 24.1% in the prior fiscal year. The decrease is primarily due to sales leverage related to the company-owned domestic same store sales increase of 8.2%, offset by an increase in company-owned restaurant wages.
Current wording
Labor costs as a percentage of company-owned restaurant sales were 23.6% in fiscal year 2024 compared to 24.0% in the prior fiscal year. The decrease is primarily due to sales leverage related to the company-owned domestic same store sales increase of 7.7%, offset by an increase in company-owned restaurant wages.
Previous wording
Other restaurant operating expenses as a percentage of company-owned restaurant sales were 19.1% in fiscal year 2023 compared to 19.3% in the prior fiscal year. The decrease is primarily related to a decrease in pre-opening expenses as compared to the prior year fiscal period, offset by an increase in the national advertising fund contribution rate to 5% from 4% effective the first day of the fiscal second quarter 2022.
Current wording
Other restaurant operating expenses as a percentage of company-owned restaurant sales were 19.2% in fiscal year 2024 compared to 19.1% in the prior fiscal year. The increase as a percentage of company-owned restaurant sales was primarily due to an increase in the national advertising fund contribution rate to 5.3% from 5.0% effective the first day of the fiscal second quarter 2024, partially offset by sales leverage related to the company-owned domestic same store sales increase of 7.7%.
Previous wording
Advertising expenses were $166.6 million, an increase of $43.5 million, compared to $123.1 million in fiscal year 2022. Advertising expenses are recognized at the same time the related revenue is recognized, which does not necessarily correlate to the actual timing of the related advertising spend.
Current wording
Advertising expenses were $233.3 million, an increase of $66.7 million, compared to $166.6 million in fiscal year 2023. Advertising expenses are recognized at the same time the related revenue is recognized, which does not necessarily correlate to the actual timing of the related advertising spend.
Previous wording
SG&A was $96.9 million in fiscal year 2023, an increase of $29.8 million, or 44.5%, compared to $67.1 million in the prior fiscal year. The prior fiscal year was impacted by the benefit of $5.4 million in forfeited stock awards, offset by additional expenses of approximately $1.0 million in expenses related to the 53 rd week. In fiscal year 2023, incentive compensation and performance-based stock compensation expense increased $9.3 million primarily related to the Company’s current fiscal year performance, professional and consulting fees increased $7.2 million associated with the Company’s strategic initiatives, and headcount related expenses increased $4.1 million to support the growth in our business.
Current wording
SG&A was $116.8 million in fiscal year 2024, an increase of $19.9 million, or 20.5%, compared to $96.9 million in the prior fiscal year. The increase in SG&A expense was driven by an increase in headcount-related expenses of $10.2 million to support the growth in our business, an increase in performance-based stock compensation and incentive compensation expense of $7.6 million related primarily to the Company’s performance, and an increase in professional and consulting fees of $1.2 million associated with the Company’s strategic initiatives, including system implementation costs.
Previous wording
Depreciation and amortization was $13.2 million in fiscal year 2023, an increase of $2.3 million, or 21.5%, compared to $10.9 million in the prior fiscal year. The increase in depreciation and amortization was primarily due to capital expenditures related to our technology investments, partially offset by an estimated $0.3 million related to the 53 rd week in the prior fiscal year.
Current wording
Depreciation and amortization was $19.5 million in fiscal year 2024, an increase of $6.3 million, or 47.2%, compared to $13.2 million in the prior fiscal year. The increase in depreciation and amortization was primarily due to software assets placed into service during fiscal year 2024 that relate to the launch of our proprietary technology platform: MyWingstop.
Previous wording
The effective tax rate in fiscal year 2023 was 25.6%, compared to an effective tax rate of 23.6% in the prior fiscal year. The increase in the effective tax rate was primarily due tothe impact of tax benefits associated with stock awards forfeited during fiscal year 2022.
Current wording
The effective tax rate in fiscal year 2024 was 26.1%, compared to an effective tax rate of 25.6% in the prior fiscal year. The increase in the effective tax rate was primarily due to an increase in non-deductible expenses.
Previous wording
General. Our primary sources of liquidity and capital resources are cash provided from operating activities, cash and cash equivalents on hand, and borrowings available under our securitized financing facility. Our primary requirements for liquidity and capital are working capital, general corporate needs, capital expenditures, income tax payments, debt service requirements, and dividend payments. Historically, we have operated with minimal positive working capital or with negative working capital. We generally utilize available cash flows from operations to invest in our business, service our debt obligations, and pay dividends.
Current wording
General. Our primary sources of liquidity and capital resources are cash provided from operating activities, cash and cash equivalents on hand, and borrowings available under our securitized financing facility. Our primary requirements for liquidity and capital are working capital, general corporate needs, capital expenditures, income tax payments, debt service requirements, and dividend payments. Historically, we have operated with minimal positive working capital or with negative working capital. We generally utilize available cash flows from operations to invest in our business, service our debt obligations, and pay dividends. As of December 28, 2024, the Company had $359.6 million of cash and cash equivalents on its balance sheet, including advertising fund cash and cash equivalents.
Previous wording
Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with our securitized financing facility including our 2022 Variable Funding Notes, will be sufficient to meet our capital expenditure, working capital and debt service requirements for at least the next twelve months and the foreseeable future.
Current wording
Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with our securitized financing facility including our Variable Funding Notes, will be sufficient to meet our capital expenditure, working capital and debt service requirements for at least the next twelve months and the foreseeable future.
Previous wording
Net cash provided by operating activities was $121.6 million in fiscal year 2023, an increase of $45.4 million from cash provided by operating activities of $76.2 million in the prior fiscal year. The increase is primarily due to an increase in operating income, as well as changes in Ad Fund cash and cash equivalents, directly related to the timing of payments for expenses incurred for national advertising.
Current wording
Net cash provided by operating activities was $157.6 million in fiscal year 2024, an increase of $36.0 million from cash provided by operating activities of $121.6 million in the prior fiscal year. The increase is primarily due to an increase in operating income, as well as changes in Ad Fund cash and cash equivalents, directly related to the timing of payments for expenses incurred for national advertising.
Previous wording
Investing activities. Our net cash used in investing activities was $52.2 million in fiscal year 2023, an increase of $23.5 million, from $28.7 million in fiscal year 2022. The increase in cash used in investing activities was primarily due to an increase in purchases of property and equipment during the current fiscal year, as well as an increase in restaurant acquisition costs as compared to the prior fiscal year.
Current wording
Investing activities. Our net cash used in investing activities was $62.5 million in fiscal year 2024, an increase of $10.3 million, from $52.2 million in fiscal year 2023. The increase in cash used in investing activities was primarily due to an increase in capital expenditures related to our technology investments, as well as the impact of additional restaurants acquired from franchisees as compared to the prior fiscal year period, partially offset by the sale of seven company-owned restaurants to a franchisee in fiscal year 2024.
Previous wording
Financing activities. Our net cash used in financing activities was $155.5 million in fiscal year 2023, primarily related to the repurchase of $125.0 million in common stock under our ASR Agreement, dividend payments of $24.9 million, and repayment of long-term debt of $3.7 million. Cash provided by financing activities of $103.3 million in fiscal year 2022 was primarily related to the net cash provided by additional borrowings under our 2022 Class A-2 Notes (as defined below) of $250 million, partially offset by the payment of a special dividend in connection with the securitized financing transaction totaling $119.5 million, as well as deferred financing and other debt related costs incurred of $5.4 million.
Current wording
Financing activities. Our net cash provided by financing activities was $144.8 million in fiscal year 2024, a change of $300.3 million, from net cash used in financing activities of $155.5 million in fiscal year 2023. The change is primarily related to the net cash provided by additional borrowings under our 2024 Class A-2 Notes (as defined below) of $500 million in fiscal year 2024, partially offset by an increase of $189.3 million in common stock repurchased under our share repurchase program as compared to the prior fiscal year.
Previous wording
Securitized financing facility. On March 9, 2022, the Company completed a securitized financing transaction, pursuant to which Wingstop Funding LLC (the “Issuer”), a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company, issued $250 million of its Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Class A-2 Notes”). The Issuer also entered into a revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “2022 Variable Funding Notes,” and together with the 2022 Class A-2 Notes, the “2022 Notes”), which permits borrowings of up to a maximum principal amount of $200 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit. The Company’s existing revolving financing facility of Series 2020-1 Class A-1 Notes was terminated in connection with the transaction. The proceeds from the securitized financing transaction were used to pay related transaction fees and expenses, strengthen the Company's liquidity position and for general corporate purposes, which included a return of capital to the Company’s stockholders.
Current wording
Securitized financing facility. On December 3, 2024, the Company completed a securitized financing transaction, in which Wingstop Funding LLC, a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company (the “Issuer”), issued $500 million of its Series 2024-1 5.858% Fixed Rate Senior Secured Notes, Class A-2 (the “2024 Class A-2 Notes”). The Issuer also increased the capacity of its revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes”) from $200 million to $300 million. Following the increase, borrowing capacity under the Variable Funding Notes permits borrowings of up to a maximum principal amount of $300 million, a portion of which may be used to issue letters of credit. The 2024 Class A-2 Notes and the Variable Funding Notes are referred to collectively as the “2024 Notes.” The proceeds from the securitized financing transaction were used to pay related transaction fees and expenses, strengthen the Company's liquidity position and for general corporate purposes, including the repurchase of shares of the Company’s common stock.
Previous wording
In addition to the 2022 Notes, the Company’s outstanding debt consists of its existing Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Notes”). No borrowings were outstanding under the 2022 Variable Funding Notes as of December 30, 2023.
Current wording
In addition to the 2024 Notes, the Company’s outstanding debt consists of its existing Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Notes”) and Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Notes”). No borrowings were outstanding under the Variable Funding Notes as of December 28, 2024.
Previous wording
Dividends. We paid quarterly cash dividends of $0.19 per share of common stock in each of the first two quarters of 2023, and quarterly cash dividends of $0.22 per share of common stock in both the third and fourth quarters of 2023, resulting in aggregate quarterly dividend payments of $24.4 million in fiscal year 2023. On February 20, 2024, the Company’s board of directors approved a dividend of $0.22 per share, to be paid on March 29, 2024 to stockholders of record as of March 8, 2024, totaling approximately $6.5 million.
Current wording
Dividends. We paid quarterly cash dividends of $0.22 per share of common stock in each of the first two quarters of 2024, and quarterly cash dividends of $0.27 per share of common stock in both the third and fourth quarters of 2024, resulting in aggregate quarterly dividend payments of $28.7 million in fiscal year 2024. On February 18, 2025, the Company’s board of directors approved a dividend of $0.27 per share, to be paid on March 28, 2025 to stockholders of record as of March 7, 2025, totaling approximately $7.7 million.
Previous wording
On August 23, 2023, the Company entered into the ASR Agreement with a third-party financial institution to repurchase $125.0 million of the Company’s common stock as part of the Share Repurchase Authorization. Under the ASR Agreement, the Company paid the financial institution $125.0 million in cash and received and retired a total of 645,952 shares of common stock at an average share price of $193.51. Final settlement of the ASR Agreement occurred on December 21, 2023. The total number of shares repurchased under the ASR Agreement was based on a daily volume-weighted average share price during the valuation period specified in the ASR Agreement, less a discount and subject to adjustments. As of December 30, 2023, $125.0 million remained available under the Share Repurchase Authorization.
Current wording
Share Repurchase Program. On August 17, 2023, the Company’s board of directors approved a new share repurchase program with authorization to repurchase up to $250.0 million of its outstanding shares of common stock (the “August 2023 Authorization”). On August 23, 2023, the Company entered into an accelerated share repurchase agreement (the “2023 ASR Agreement”) with a third-party financial institution to repurchase $125.0 million of the Company’s common stock as part of the August 2023 Authorization. Under the 2023 ASR Agreement, the Company paid the financial institution $125.0 million in cash and received and retired a total of 645,952 shares of common stock at an average share price of $193.51. Final settlement of the ASR Agreement occurred on December 21, 2023.
Previous wording
Share Repurchase Program. On August 16, 2023, the Company’s Board of Directors approved a new share repurchase program with authorization to purchase up to $250.0 million of its outstanding shares of common stock (the “Share Repurchase Authorization”).
Current wording
On December 5, 2024, the Company’s board of directors authorized the purchase of up to an additional $500.0 million of its outstanding shares of common stock under its existing share repurchase program (the “December 2024 Authorization” and together with the August 2023 Authorization, the “Share Repurchase Program”), following the substantial completion of purchases of common stock under the August 2023 Authorization.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
(b) Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete, project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income. Fiscal year 2022 includes approximately $0.5 million of third-party consulting fees incurred relating to a strategic initiative to consider the development of a business plan and financial model for potential vertical integration of a poultry complex, which review was completed in fiscal year 2022. Fiscal years 2023 and 2022 include approximately $5.2 million and $0.4 million, respectively, in consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, and which review was completed in fiscal year 2023. Given the magnitude and scope of these two strategic review initiatives that are not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiatives not reflective of the ongoing costs to operate its business.