Wingstop Comes to the Big Apple
Dallas-based Wingstop Inc. (NASDAQ:WING) has come to the Big Apple.
The digitally-savvy, tech-focused restaurant brand with more than 1,600 locations worldwide has debuted its first Manhattan ghost kitchen in Times Square, with corporate officials saying there are more than 20 additional locations in the pipeline.
Executives announced plans in July to develop the Manhattan area in a company-owned strategy that includes an asset mix of traditional locations and ghost kitchens, with more than 20 upcoming openings over the course of three years. The brand believes its entrance into Manhattan presents an opportunity to invest capital and deliver great returns for shareholders by participating in Wingstop's best-in-class unit economics.
"The opening of Manhattan builds upon our strong development pipeline that has delivered record setting development each quarter in 2021," Wingstop CEO and Chairman Charlie Morrison said. "With the combination of ghost kitchens and traditional locations in Manhattan, we're following a proven playbook similar to our U.K. market, which now has AUVs at more than $2 million, surpassing our domestic average."
With the launch of Wingstop's first ghost kitchen in the U.K. in June 2020, the brand has seen promising results throughout its ghost kitchen portfolio, the release noted. Ghost kitchens create an opportunity to penetrate areas with high real estate costs or lower inventory of retail space.
The success experienced in the U.K. serves as fuel as the brand looks to replicate the archetype strategy in markets outside of Manhattan, including San Francisco, where Wingstop has an existing, small high street presence and one ghost kitchen.
Wingstop's entry into Manhattan follows four record quarters for development, executives said, with 49 net new restaurants in the third quarter of 2021 as well as an all-time high development year in 2020 with 153 net new restaurants and more than 700 restaurants commitments from brand partners.
For fiscal year 2020, Wingstop's system-wide sales increased 28.8% year over year to approximately $2.0 billion, marking the 17th consecutive year of same-store sales growth. The company has achieved over 700% stockholder return since its 2015 initial public offering.
The chain has also introduced its newest limited-time flavor, Orange Szechuan. The item was a trending flavor request from guests, and listening to what they're craving is always part of our innovative approach, Wingstop's Chief Growth Officer Marisa Carona said in a release. Our unique Wingstop take on Orange Szechuan creates a sweet and spicy flavor profile inspired by the most authentic ingredients."
"Whether enjoyed alone or as part of a meal with one of our signature sides, she continued, like freshly cut seasoned fries, our Orange Szechuan wings and thighs will create a fun new flavor experience. We look forward to offering new and exciting flavors like Orange Szechuan for our guests to enjoy."
The concepts core menu items include classic wings, boneless wings, cooked-to-order tenders that are hand-sauced-and-tossed in a choice of 11 flavors. Also available are signature sides, including fresh-cut, seasoned fries and freshly-made ranch and bleu cheese dips.
This article first appeared on GuruFocus.
