Wingstop’s first-quarter results were good, but in the early weeks of the second quarter, the company’s deep commitment to digital operations sent its sales skyward. The company reported a 9.9 percent same-store sales increase through the quarter which ended March 30. Nearly half—47 percent—of those orders were digital.
When the COVID-19 pandemic hit and the company closed dining rooms in mid-March, there was an initial transaction decline and a small uptick in transaction size in the range of a typical online order bump of $5. But in April, company sales exploded.
“Domestic same-store sales increased 33.4 percent in the first four weeks of the second quarter, far exceeding our own expectations. Company-owned restaurant, same-store sales increased 32.6 percent during this same time period,” said executive vice president and CFO Michal Skipworth. “As April progressed, we experienced an acceleration in our same-store sales growth. This acceleration was due primarily to average check growth resulting from a higher mix of digital and delivery channels.”
He said that incredible growth showed “the strategic investments we have made to establish a world-class digital platform along with the rollout of national delivery in 2019 provided a strong foundation for our brand during this time and has led to the success we have seen,” said Skipworth on the earnings call.
A major marketing push helped there, as well.
“This was the first time we leveraged national advertising to promote delivery as a channel. As we navigated the initial days of this crisis, we quickly pivoted and partnered with DoorDash to offer free delivery via Wingstop.com and our Wingstop app to ease the burden of delivery fees for guests,” said Skipworth. “The promotion continued through April 30. We ended the first quarter with 47 percent of our sales through digital channels. We saw this accelerate to over 65 percent of sales during April.”
CEO Charlie Morrison said, above all, it was the entrepreneurial spirit driving the company through major change.
“Entrepreneurs make decisions quickly by relying on clarity over certainty. At Wingstop, we embraced our entrepreneurial spirit to pivot quickly to modify our operations and service approach, redirect our advertising and implement rapid changes to our technology that ensure our guests experience meets the needs of this extraordinary time,” said Morrison.
The Wingstop results show yet again how the leaders in the convenience economy were poised to benefit when the pandemic came and accelerated the ongoing trend toward off-premises dining.
