Wingstop Inc

Previous wording

Wingstop is the largest fast casual chicken wings-focused restaurant chain in the world, with over 2,450 locations worldwide. We are dedicated to serving the world flavor through an unparalleled guest experience and offering of classic wings, boneless wings, tenders, and chicken sandwiches, always cooked to order and hand-sauced-and-tossed in 12 bold, distinctive flavors.

Current wording

Wingstop is the largest fast casual chicken wings-focused restaurant chain in the world, with over 2,650 locations worldwide. We are dedicated to serving the world flavor through an unparalleled guest experience and offering of classic wings, boneless wings, tenders, and chicken sandwiches, always cooked to order and hand-sauced-and-tossed in 12 bold, distinctive flavors.

Previous wording

•244 net new openings in the year-to-date third quarter of 2024;

Current wording

•126 net new openings in the fiscal first quarter 2025;

Previous wording

•Digital sales increased to 69.0% of system-wide sales, as compared to 66.9% in the prior fiscal third quarter;

Current wording

•Digital sales increased to 72.0% of system-wide sales;

Previous wording

•Adjusted EBITDA, a non-GAAP measure, increased 39.5% to $53.7 million, compared to adjusted EBITDA of $38.5 million in the prior fiscal third quarter.

Current wording

•Adjusted EBITDA, a non-GAAP measure, increased 18.4% to $59.5 million.

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, system implementation costs, and stock-based compensation expense. Adjusted EBITDA may not be comparable to other similarly titled captions of other companies due to differences in methods of calculation. 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, certain system implementation costs, gains and losses on non-recurring transactions, and stock-based compensation expense. Adjusted EBITDA may not be comparable to other similarly titled captions of other companies due to differences in methods of calculation. 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

The following table sets forth our key performance indicators for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023 (in thousands, except unit data):

Current wording

The following table sets forth our key performance indicators for the thirteen weeks ended March 29, 2025 and March 30, 2024 (in thousands, except unit data):

Previous wording

(1) The percentage of system-wide sales attributable to company-owned restaurants was 2.5% and 2.7% for the thirteen weeks ended September 28, 2024 and September 30, 2023, respectively, and was 2.5% and 2.8% for the thirty-nine weeks ended September 28, 2024 and September 30, 2023, 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 2.3% and 2.5% for the thirteen weeks ended March 29, 2025 and March 30, 2024, respectively. The remainder was generated by franchised restaurants, as reported by our franchisees.

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 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.

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 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, certain system implementation costs, gains and losses on non-recurring transactions, 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

The following table reconciles net income to EBITDA and Adjusted EBITDA for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023 (in thousands):

Current wording

The following table reconciles net income to EBITDA and Adjusted EBITDA for the thirteen weeks ended March 29, 2025 and March 30, 2024 (in thousands):

Previous wording

(c)Includes non-cash, stock-based compensation, net of forfeitures.

Current wording

(e)Includes non-cash, stock-based compensation, net of forfeitures.

Previous wording

(b)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 wording

(d) 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.

Previous wording

During the thirteen weeks ended September 28, 2024, total revenue was $162.5 million, an increase of $45.4 million, or 38.8%, compared to $117.1 million in the comparable period in 2023.

Current wording

During the thirteen weeks ended March 29, 2025, total revenue was $171.1 million, an increase of $25.3 million, or 17.4%, compared to $145.8 million in the comparable period in 2024.

Previous wording

Royalty revenue, franchise fees and other increased $21.2 million, of which $9.6 million was due to domestic same store sales growth of 20.9%, and $9.3 million was due to net new franchise restaurant development. Other revenue increased by $2.1 million primarily due to an increase in vendor rebates.

Current wording

Royalty revenue, franchise fees and other increased $11.7 million, of which $10.0 million was due to net new franchise restaurant development, and $0.3 million was due to domestic same store sales growth of 0.5%. Other revenue increased by $0.8 million primarily due to an increase in vendor rebates compared to prior fiscal first quarter.

Previous wording

Advertising fees increased $16.8 million primarily due to a 39.4% increase in system-wide sales during the fiscal third quarter 2024. $3.2 million of the increase 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.

Current wording

Advertising fees increased $12.1 million primarily due to a 15.7% increase in system-wide sales during the fiscal first quarter 2025. $5.6 million of the increase was due to an increase in the national advertising fund contribution rate to 5.5% from 5.0%, effective the first day of the fiscal first quarter 2025.

Previous wording

Company-owned restaurant sales increased $7.4 million, due to an increase of $4.9 million related to the addition of ten net new company-owned restaurants since the prior fiscal third quarter. The remainder of the increase was due to company-owned same store sales growth of 7.3%, which was driven primarily by an increase in transactions.

Current wording

Company-owned restaurant sales increased $1.5 million, of which $0.5 million was related to company-owned same store sales growth of 1.4%, driven primarily by an increase in transactions, and $1.0 million was primarily related to company-owned restaurants opened and acquired since the prior fiscal first quarter.

Previous wording

Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 37.0% in the thirteen weeks ended September 28, 2024, compared to 33.0% in the comparable period in 2023. This increase was primarily due to a 42.9% increase in the cost of bone-in chicken wings as compared to the prior year period. Our purchases in the prior fiscal third quarter were tied primarily to the spot market, which benefited from significant deflation in the cost of bone-in chicken wings.

Current wording

Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 37.4% in the thirteen weeks ended March 29, 2025, compared to 34.7% in the comparable period in 2024. This increase was primarily due to a 13.2% increase in the cost of bone-in chicken wings as compared to the prior year period.

Previous wording

Labor costs as a percentage of company-owned restaurant sales were 23.5% for the thirteen weeks ended September 28, 2024, which was comparable to 23.6% for the thirteen weeks ended September 30, 2023.

Current wording

Labor costs as a percentage of company-owned restaurant sales were 23.8% for the thirteen weeks ended March 29, 2025, which was comparable to 23.4% for the thirteen weeks ended March 30, 2024. The increase is primarily due to an increase in company-owned restaurant wages, partially offset by the sale of corporate restaurants in the New York market to an existing franchisee during the fiscal fourth quarter 2024.

Previous wording

Other restaurant operating expenses as a percentage of company-owned restaurant sales were 20.0% for the thirteen weeks ended September 28, 2024, compared to 19.4% for the thirteen weeks ended September 30, 2023. 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, as well as an increase in pre-opening expenses as compared to the prior year period.

Current wording

Other restaurant operating expenses as a percentage of company-owned restaurant sales were 17.3% for the thirteen weeks ended March 29, 2025, compared to 19.0% for the thirteen weeks ended March 30, 2024. The decrease as a percentage of company-owned restaurant sales was primarily due to the sale of corporate restaurants in the New York market during the fiscal fourth quarter 2024, partially offset by an increase in the national advertising fund contribution rate to 5.5%, effective the first day of the fiscal first quarter 2025.

Previous wording

During the thirteen weeks ended September 28, 2024, advertising expenses were $61.0 million, an increase of $18.6 million compared to $42.4 million in the comparable period in 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.

Current wording

During the thirteen weeks ended March 29, 2025, advertising expenses were $65.8 million, an increase of $12.6 million compared to $53.2 million in the comparable period in 2024. 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

During the thirteen weeks ended September 28, 2024, SG&A expense was $32.3 million, an increase of $9.2 million compared to $23.0 million in the comparable period in 2023. The increase in SG&A expense was driven by an increase in performance-based stock compensation and incentive compensation expense of $4.9 million primarily related to the Company’s performance, an increase in headcount related expenses of $2.8 million to support the growth in our business, and an increase in consulting and other professional fees of $1.3 million associated with our strategic initiatives, including system implementation costs.

Current wording

During the thirteen weeks ended March 29, 2025, SG&A expense was $31.4 million, an increase of $6.3 million compared to $25.2 million in the comparable period in 2024. The increase in SG&A expense was driven by an increase in headcount related expenses, inclusive of stock-based compensation, of $4.8 million to support the growth in our business, as well as system implementation costs of $1.3 million during the fiscal first quarter 2025.

Previous wording

During the thirteen weeks ended September 28, 2024, depreciation and amortization was $5.1 million, an increase of $1.7 million compared to $3.4 million in the comparable period in 2023. The increase in depreciation and amortization was primarily due to depreciation expense for the software assets placed in service during the second fiscal quarter 2024 related to our MyWingstop technology platform.

Current wording

During the thirteen weeks ended March 29, 2025, depreciation and amortization was $6.2 million, an increase of $2.8 million compared to $3.4 million in the comparable period in 2024. The increase in depreciation and amortization was primarily due to depreciation expense for software assets placed in service during the fiscal second quarter 2024 that relate to the launch of our proprietary technology platform: MyWingstop.

Previous wording

During the thirteen weeks ended September 28, 2024, interest expense, net was $5.1 million, an increase of $0.6 million compared to $4.5 million of interest expense, net in the comparable period in 2023. The increase was primarily driven by additional interest income earned on our cash balances during the thirteen weeks ended September 30, 2023.

Current wording

During the thirteen weeks ended March 29, 2025, interest expense, net was $8.9 million, an increase of $4.4 million compared to $4.5 million of interest expense, net in the comparable period in 2024. The increase was primarily driven by $7.8 million in interest expense related to the securitized financing transaction completed on December 3, 2024, which increased our outstanding debt by $500 million, partially offset by additional interest income earned on our cash balances and interest earned on our investments, as compared to the prior year period.

Previous wording

During the thirteen weeks ended September 28, 2024, we recognized income tax expense of $9.8 million, yielding an effective tax rate of 27.5%, compared to an effective tax rate of 25.4% in the prior year period. The increase in the effective tax rate is primarily related to the impact of nondeductible expenses for executive compensation during the thirteen weeks ended September 28, 2024.

Current wording

During the thirteen weeks ended March 29, 2025, we recognized income tax expense of $30.9 million, yielding an effective tax rate of 25.1%, comparable to an effective tax rate of 25.3% in the prior year period. The increase in total tax expense is primarily related to the increase in Investment income, net as a result of the gain on sale of our investment in LPH during the fiscal first quarter 2025.

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, dividend payments, and the repurchase of shares of our common stock (if any). 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, pay dividends, and repurchase shares of our common stock (if any).

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, dividend payments, and the repurchase of shares of our common stock (if any). 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, pay dividends, and repurchase shares of our common stock (if any). As of March 29, 2025, the Company had $251.4 million of cash and cash equivalents on its balance sheet.

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

The following table shows summary cash flows information for the thirty-nine weeks ended September 28, 2024 and September 30, 2023 (in thousands):

Current wording

The following table shows summary cash flows information for the thirteen weeks ended March 29, 2025 and March 30, 2024 (in thousands):

Previous wording

Net cash provided by operating activities was $149.9 million in the thirty-nine weeks ended September 28, 2024, an increase of $66.1 million from net cash provided by operating activities of $83.7 million in the thirty-nine weeks ended September 30, 2023. The increase is primarily due to an increase in operating income, coupled with the change in working capital due to timing of payments associated with our national advertising campaign and taxes.

Current wording

Net cash provided by operating activities was $25.3 million in the thirteen weeks ended March 29, 2025, a decrease of $19.4 million from net cash provided by operating activities of $44.7 million in the thirteen weeks ended March 30, 2024. The decrease is primarily related to changes in Ad Fund cash and cash equivalents, directly related to the timing of payments for expenses incurred for national advertising, as well as changes in working capital.

Previous wording

Financing activities. Our net cash used in financing activities was $88.3 million in the thirty-nine weeks ended September 28, 2024, a decrease of $60.7 million from net cash used in financing activities of $149.0 million in the thirty-nine weeks ended September 30, 2023. The decrease is primarily due to a decrease in common stock repurchased under our Share Repurchase Program as compared to the prior fiscal year period, in which we initiated a $125.0 million accelerated share repurchase program, as well as principal payments made in the thirty-nine weeks ended September 30, 2023.

Current wording

Financing activities. Our net cash used in financing activities was $140.4 million in the thirteen weeks ended March 29, 2025, an increase of $130.8 million from net cash used in financing activities of $9.6 million in the thirteen weeks ended March 30, 2024. The increase is primarily related to $120.8 million in common stock repurchased under our share repurchase program as compared to the prior fiscal year period.

Previous wording

Securitized financing facility. On March 9, 2022, the Company completed a securitized financing transaction, pursuant to which Wingstop Funding LLC, 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"), and 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 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. No borrowings were outstanding under the 2022 Variable Funding Notes as of September 28, 2024.

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 Class A-2 Notes”).

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 Class A-2 Notes”) and Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Class A-2 Notes”).

Previous wording

During the fiscal third quarter of 2024, the Company continued to have a leverage ratio under the 2020 Class A-2 Notes and the 2022 Class A-2 Notes of less than 5.0x. Per the terms of the Company’s debt agreements, principal payments can be suspended at the borrower’s election until the repayment date, as long as the Company maintains a leverage ratio of less than 5.0x. Accordingly, the Company elected to suspend payments following the principal payment made in the second quarter of 2023, and the entire outstanding balance of the 2020 Class A-2 Notes and the 2022 Class A-2 Notes has been classified as long-term debt due after fiscal year 2026.

Current wording

During the fiscal first quarter of 2025, the Company continued to have a leverage ratio under the 2020 Class A-2 Notes, the 2022 Class A-2 Notes, and 2024 Class A-2 Notes of less than 5.0x. Per the terms of the Company’s debt agreements, principal payments can be suspended at the borrower’s election until the repayment date, as long as the Company maintains a leverage ratio of less than 5.0x. Accordingly, the Company elected to suspend payments, and the entire outstanding balance of the 2020 Class A-2 Notes, the 2022 Class A-2 Notes, and the 2024 Class A-2 Notes has been classified as long-term debt due after fiscal year 2026.

Previous wording

Dividends. We paid a quarterly cash dividend of $0.22 per share of common stock in each of the first two quarters of 2024, and a quarterly dividend of $0.27 per share of common stock in the third quarter of 2024, resulting in aggregate declared dividends of $20.8 million, or $0.71 per share of common stock, during the thirty-nine weeks ended September 28, 2024. On October 29, 2024 the Company’s Board of Directors declared a dividend of $0.27 per share, to be paid on December 6, 2024 to stockholders of record as of November 15, 2024, totaling approximately $7.9 million.

Current wording

Dividends. We paid a quarterly cash dividend of $0.27 per share of common stock, resulting in an aggregate of $7.6 million during the thirteen weeks ended March 29, 2025. On April 29, 2025 the Company’s Board of Directors declared a dividend of $0.27 per share, to be paid on June 6, 2025 to stockholders of record as of May 16, 2025, totaling approximately $7.5 million.

Previous wording

Share Repurchase Program. On August 17, 2023, the Company announced a share repurchase program with authorization to purchase up to $250.0 million of its outstanding shares of common stock (the “Share Repurchase Program”). During the thirteen weeks ended September 28, 2024, the Company repurchased and retired 93,617 shares of its common stock at an average price of $373.68 per share. As of September 28, 2024, $61.1 million remained available under the Share Repurchase Program.

Current wording

Share Repurchase Program. On December 5, 2024, the Company’s Board of Directors authorized the repurchase of up to an additional $500.0 million of its outstanding shares of common stock under its existing share repurchase program (the “Share Repurchase Program”). During the thirteen weeks ended March 29, 2025, the Company repurchased and retired 830,012 shares of its common stock at an average price of $257.40 per share, inclusive of common stock received as part of the final settlement under the ASR Agreement. As of March 29, 2025, $191.3 million remained available under the Share Repurchase Program. The authorization for the repurchase continues until all such shares have been repurchased or the repurchase plan is terminated by action of the Company’s Board of Directors.

Previous wording

•the impact on our business from unexpected events such as international conflict or war and related sanctions, acts of terrorism, civil unrest, epidemics and pandemics and severe weather;

Current wording

•the impact on our business from unexpected events such as changes in trade relations and policies, including tariffs, retaliatory tariffs and other trade barriers, international conflict or war and related sanctions, acts of terrorism, civil unrest, epidemics and pandemics and severe weather;