Wingstop experiences a decrease in same-store sales for the first time in three years
Wingstop, the popular chicken wing chain, is making waves in the fast-food industry with its innovative Smart Kitchen operating system. The system, which has been implemented in over 1,000 U.S. restaurants, has significantly improved sales and speed performance.
The Smart Kitchen has reduced average order preparation time to about 10 minutes, improving the chain's visibility in search results for "food under 30 minutes." This faster service enhances guest experience, consistency, and profitability, contributing to stronger same-store sales growth in test locations and overall operational gains.
The investment in AI-powered Smart Kitchen technology has streamlined operations, improved consistency, and reduced order quote times, enabling the chain to unlock additional demand, especially during peak hours. This technological enhancement is a core factor driving Wingstop’s sustained growth and record unit development. Over 10% of the system is already performing above the new $3 million average unit volume target, indicating strong unit economics and scalability linked to the Smart Kitchen platform.
The company projects the addition of 435 to 460 restaurants for the year, representing a global unit growth rate of 17% to 18%. Wingstop has already added 255 net new units so far in 2025, which is about how many the chain opened in all of 2023. The chain is expanding to new markets, with units coming to Italy and the Netherlands.
Despite a slight same-store sales decline of 1.9% likely due to macroeconomic consumer budget pressures, CEO Michael Skipworth expects comparable sales to turn positive again in the third quarter. The softness in sales has mostly been seen in pockets, particularly among lower-income Hispanic guests, which aligns with broader industry trends.
The decline in sales was primarily seen in Wingstop's franchise locations, while more than 160 company units saw a 3.6% increase, driven by transactions. The brand is increasing its marketing efforts around sports events, including a recent NBA partnership, and expects football season and potential partnerships with WWE and UFC events to bring more results.
Wingstop reiterated its projection for 1% domestic same-store sales growth for the year. Net income decreased 2.6% for the chain to $26.8 million. Despite the short-term challenges, the Smart Kitchen rollout is expected to support a rebound in sales and efficiency as it expands to franchised stores over the coming quarters.
The company, which currently has 407 units in other countries, including the first to open in Sydney, Australia, and the first flagship in Paris, is planning to test a new loyalty program in the fourth quarter and expects a full rollout next year.
Wall Street appears to be happy with Wingstop's results, with the stock price up more than 25% in midday trading on Wednesday. With the successful implementation of the Smart Kitchen system, Wingstop is poised for continued growth and success in the fast-food industry.
References: 1. Wingstop Q2 Earnings Call Transcript 2. Wingstop's Smart Kitchen Revolution 3. Wingstop's Q2 Sales Slump 4. Wingstop's Smart Kitchen Impact 5. Wingstop's Q2 Earnings Press Release
- Wingstop, with its innovative Smart Kitchen system, is revolutionizing the restaurant industry by simplifying operations, enhancing consistency, and rapidly preparing orders, making it attractive to investors looking for businesses with robust real-estate investments and solid financial performance.
- Leveraging the success of the Smart Kitchen, Wingstop is planning to expand globally, franchising its business into new markets such as Italy and the Netherlands, while also introducing a new loyalty program and capitalizing on potential partnerships with sports events like the NBA, WWE, and UFC to boost sales.
- Despite facing short-term challenges due to external economic factors, the company remains optimistic about its future, expecting a rebound in sales and efficiency as the Smart Kitchen system is rolled out to franchised stores, further solidifying its position in the fast-food industry and driving profitability through menu innovation.
