Wingstop Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Wingstop Inc.' 's Fiscal Third Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note that this conference is being recorded today, Tuesday, November 4, 2025. On the call today are Michael Skipworth, President and Chief Executive Officer, Alex Kalida, Senior Vice President and Chief Financial Officer, and Sarah Niehaus, Senior Director of Investor Relations. I would now like to turn the conference over to Sarah. Please go ahead.

Thank you, and welcome to the fiscal third quarter 2025 earnings conference call for Wingstop. Our results were published earlier this morning and are available on our Investor Relations website at ir.wingstop.com. Our discussion today includes forward-looking statements. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties that could cause our actual results to differ materially from what we currently expect. Our SEC filings describe various risks that could affect our future operating results and financial condition. We use certain non-GAAP financial measures that we believe can be useful in evaluating our performance. Presentation of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations to comparable GAAP measures are contained in our earnings release. Lastly, for the Q&A session, we ask that each of you please keep to one question and a follow-up to allow as many participants as possible to ask a question. With that, I would like to turn the call over to Michael.

Good morning, everyone. We appreciate you joining our call. Coming into 2025, our priorities were clear. accelerate our global footprint as we scale towards our goal of over 10,000 Wingstop restaurants, execute the national rollout of our new kitchen operating platform across our 2,500 domestic restaurants, and deliver average unit volume growth as we scale towards our target of $3 million. Following two industry-leading years of same-store sales growth, stacking comps of roughly 40%, Through the first three quarters of 2025, we have opened 369 net new restaurants, representing a 19% unit growth rate, well surpassing our expectations. And we are quickly approaching 3,000 restaurants globally, not even a third of our potential. System-wide sales have grown by 13%, and on a trailing 12-month basis, system-wide sales exceeds well over $5 billion. The strength of our highly franchised asset-light model has delivered 17% adjusted EBITDA growth in this same timeframe. And as of this past week, we have implemented our new kitchen operating platform in over 2,000 restaurants, keeping us on track to have the national rollout completed by prior to year end. We shared earlier this year that certain regional pockets, which over-indexed to Hispanic and low-income consumers, were experiencing some softness in sales as we lapped two consecutive years of industry-leading same-store sales growth. During the third quarter, we saw this dynamic broaden across the industry and within our business to more geographies as well as to the middle-income consumer in some areas, resulting in a 5.6% decline in same-store sales in Q3 that was below our expectations. We believe this is only temporary and the current consumer environment will prove to be cyclical. While none of us can predict the duration, where I am focused is on the strategies we are executing that position Wingstop to return to same-store sales growth and further strengthen our already best-in-class unit economics. What gives me confidence is the underlying fundamentals and health of the brand that remains strong and the early results we're seeing from our strategies being implemented in 2025. Let me touch on each of these strategies we are investing in that we believe will scale AUVs towards our target of $3 million. First, our new kitchen operating platform, Wingstop Smart Kitchen, is truly a game changer. As I mentioned earlier, we are live in over 2000 restaurants. We are seeing more and more restaurants that have been on the new kitchen operating platform start to consistently deliver a 10 minute speed of service. Truly incredible to think about. That's over a 50% reduction from our prior speed of service levels. Our consumer research and early results in markets with the Wingstop Smart Kitchen show that speed and consistency are sizable opportunities for us to become more of the consumer's consideration set. Our brand partners are fully bought in, motivated to execute our new operating standards and maximize the investment they are making. Our Southwest region, which has the highest concentration and longest tenure with the new kitchen operating platform, is consistently delivering these 10-minute speed of service levels with 100% of restaurants seeing improvements in guest satisfaction scores, particularly in areas such as accuracy and consistency. Additionally, during the last quarter, same-store sales growth in the Southwest region had a mid-single-digit delta versus the U.S. average. What we're learning is restaurants begin seeing measurable improvements in guest scores following eight weeks of go-live and sustaining performance into a three- to six-month window from implementation where new guest retention rates and frequency strengthen. reinforcing that the benefits are consistent, repeatable, and scalable across the system. As we enter 2026 and begin supporting this game-changing improvement in our speed of service levels with marketing, we anticipate this curve will start to accelerate and position us to win more share of occasions in our demand space. Second is our new marketing campaign. Let me first help explain our core demand space where Wingstop is best positioned to win and who we need to target to fully appreciate the significance of this new campaign. It's a party size of two or more adults who prioritize a high-quality restaurant experience and access brands through off-premise occasions. These guests aren't anchored to a specific demographic. They are equally representative across ethnicity, income level, or age. The fact is today we are only winning roughly 2% of this demand space. And we believe we have a runway to gain our fair share at 20% over the long term. It starts with filling the top of the funnel and attracting new guests into the brand. Our gap in awareness to larger, more mature national brands is more than 20%. And as consumers become aware of your brand, consideration becomes an unlock where we have an even larger gap to these same brands. This is where our new ad campaign comes into play. The tagline is Wingstop is here. Our new campaign will showcase how Wingstop fits into everyday life moments. A friend hosting dinner for game night. Streaming a show with your plus one, a quick lunch with coworkers, or that late night indulgent craving only Wingstop can fulfill. Insights and moments informed by our more frequent guests. It is equally centered on reminding our core fans of that indulgent Wingstop occasion they know and love and educating new guests on how Wingstop fits into everyday life. Our new campaign is centered around broadening the top of the funnel and bringing in guests and occasions we are best positioned to win. I am extremely excited to see the interplay of this new marketing campaign and our new kitchen operating platform, the Wingstop Smart Kitchen, come to life and I believe it will be a powerful unlock for our business. The third strategic investment is loyalty. We have a best-in-class digital platform representing over 70% of sales, and we have amassed a database of over 60 million users, all without a loyalty program. Our technology platform, which we refer to as My Wingstop, has positioned us for that next natural extension of our digital journey with the launch of a loyalty program that we are branding as Club Wingstop. The addition of our loyalty program is just another tool in our digital flywheel that would allow us to drive behavior and win more of those occasions we are best positioned for. It will connect our rich first-party data with personalized offers and experiences to increase frequency and lifetime value. Club Wingstop will bring a hyper-personalized digital experience to life. in a way that only Wingstop can. Not through discounting, but through curated, one-of-a-kind access to content, flavors, merchandise, and experiences. We are currently in the pilot phase. Sign-up rates and guest engagement are ahead of our expectations. Based on early results, it's validating the extensive research and insights from our existing personalization strategies that informed the design of our program. It will truly be a differentiated loyalty program that we can bring to guests. We're on track for a national launch of our loyalty program by the end of the second quarter in 2026. As we look to 2026 and consider our Wingstop Smart Kitchen, our new ad campaign, and loyalty all coming together, there is a lot to be excited about, and I believe positions Wingstop well for this next phase of growth. Just last month, we hosted our brand partners at our annual Franchise City Conference. You could really feel the energy and enthusiasm in the brand. And it was clear they share my excitement around these investments we are making to support this next phase of growth for Wingstop. The opportunity to scale Wingstop to over 10,000 restaurants globally remains significant. We are now opening more than one Wingstop per day. The demand from our brand partners is as strong as it's ever been. It holds true for a five-restaurant brand partner or a 100-plus restaurant brand partner. We are executing our development strategy through our market-level playbooks that allow us to grow in the most sustainable way and maintain our industry-leading unit growth. In our most recent quarter, over 70 unique brand partners opened a Wingstop in over 100 different markets across the U.S., which really showcases the breadth and depth of demand for unit growth across our brand partners. Based on the strength of our pipeline, we now have line of sight into delivering a unit growth rate in the mid-teens range for 2026, well above our long-term algorithm of 10% plus unit growth. Outside of the US, we are making tremendous progress with new market openings, and our growth rate continues to accelerate. We've opened in several countries throughout the GCC, launched a brand building site in the Netherlands, expanded in France with multiple flagships, and are preparing to launch in Ireland, Thailand, and Italy. We're proving that the world needs our flavor and brand partners need our best in class unit economics. And we're just getting started in bringing Wingstop to guests around the world. Most recently, we finalized a landmark agreement for Wingstop in India, a market with an opportunity of over 1000 restaurants. Our international success shows the strength of the brand and the significant global runway still ahead. As of the end of Q3, our development pipeline yet again sits at a record level and just continues to build. A powerful signal that our brand partners see what we see. A runway for sustained profitable growth supported by industry-leading returns. As our business continues to scale, we believe our obligation to give back grows as well. About a year ago, we announced our partnership with St. Jude's Children Research Hospital. The work that is happening at St. Jude's is remarkable, and our brand partners, team members, and fans have embraced the opportunity to contribute to St. Jude's lifesaving mission, finding a cure for childhood cancer. Since this partnership started a year ago, I'm thrilled to share that we have raised nearly $3.5 million as a system. And we're not going to stop there. We believe in St. Jude's cause and see this as a lasting partnership opportunity for our brand. There's a lot to be excited about at Wingstop. We are focused on executing against strategies that we believe will position Wingstop well for the next phase of growth, providing line of sight for continued AUV expansion and maintaining industry-leading unit economics as we continue to expand our global restaurant count towards our goal of over 10,000 restaurants. The progress we've made in rolling out the new Wingstop Smart Kitchen platform Building our loyalty program and opening over 350 net new restaurants globally in just nine months is a testament to the people who are relentlessly focused on scaling Wingstop into a top 10 global restaurant brand. Our strategy is only as good as those executing, and I want to take a moment and thank our brand partners, supplier partners, and team members across the globe for their efforts. With that, I'd like to turn the call over to Alex.