Wingstop (WING) Q2 2025: Net New Units Up 20%, Smart Kitchen Rollout Drives Operational Step-Change
Wingstop’s record 129 net new openings in Q2 mark an inflection in global expansion, as the company leverages operational innovation and digital engagement to offset near-term comp softness. The full-scale deployment of Wingstop Smart Kitchen is already compressing ticket times and driving outperformance in key markets, while international momentum and a robust development pipeline reinforce the brand’s long-term growth thesis.
Summary
- Unit Growth Outpaces Industry: Wingstop’s rapid new store expansion signals accelerating franchisee confidence and global brand demand.
- Operational Transformation Underway: Smart Kitchen rollout materially improves speed, consistency, and guest satisfaction across dayparts.
- Strategic Levers Set for 2026: Digital loyalty, menu innovation, and global market entries position Wingstop for continued multi-year outperformance.
Performance Analysis
Wingstop’s Q2 was defined by a record-setting 129 net new restaurants, representing nearly 20% unit growth and the highest quarterly expansion in company history. System-wide sales climbed double digits, with total revenue growth supported by both franchise expansion and company-owned restaurant performance. Same-store sales (comp sales) declined modestly, but this was against an extraordinary multi-year comp stack that included 28.7% growth in the prior year and 16.8% the year before, both driven by transaction volume. Management contextualized the comp softness as a function of lapping outsized prior-year gains, not demand erosion.
Company-owned restaurants, which have fully implemented the Wingstop Smart Kitchen, delivered positive same-store sales growth and materially improved speed of service metrics, with average ticket times dropping to 10 minutes from a prior range of 18 to 22 minutes. Cost of sales as a percent of company-owned sales declined, driven by sales leverage and ongoing supply chain discipline that keeps food costs within the targeted mid-30% range. SG&A increases were attributed to strategic headcount and technology investments, including a new ERP and HRIS platform, with non-recurring costs clearly called out. Adjusted EBITDA and EPS both grew, though EPS was impacted by increased interest expense from the late-2024 securitization used to fund share repurchases.
- Development-Driven Revenue Mix: Franchise royalties and fees rose primarily from 464 net new franchise openings in the trailing year, dwarfing the impact of comp softness.
- Smart Kitchen Margin Impact: Cost of sales leverage and labor efficiency gains are visible in company-owned stores, aided by operational tech upgrades and supply chain stability.
- Digital and Delivery Channel Tailwind: Digital engagement and delivery sales outperformed in Smart Kitchen markets, with delivery sales growth outpacing the U.S. average by mid-single digits in Dallas-Fort Worth.
Overall, the quarter underscores the asset-light, franchise-driven business model, where new unit growth and operational innovation more than offset short-term comp pressures, and international expansion adds incremental upside.
Executive Commentary
"The demand for opening more Wingstops is the strongest it's ever been. We opened 129 net new restaurants globally in the second quarter, a nearly 20% growth rate. The 129 net new units was the highest number of restaurants open in a single quarter in our history."
Michael Skipworth, President and CEO
"At today's AUVs of $2.1 million and on a low $500,000 investment to build a Wingstop, brand partners are seeing unlevered cash-on-cash returns of over 70%. This is driving yet another record-breaking quarter for development and, as Michael mentioned, fueling a record pipeline of sold restaurant commitments."
Alex Kalida, Senior Vice President and CFO
Strategic Positioning
1. Smart Kitchen as an Operational Game Changer
The rollout of the Wingstop Smart Kitchen, a proprietary kitchen operating platform, is transforming restaurant operations. With 1,000 locations live and full system implementation expected by year-end, early results show a 40% reduction in average ticket times and higher guest satisfaction scores. Smart Kitchen restaurants are outperforming control groups in same-store sales, particularly in the Dallas-Fort Worth market, and are unlocking new daypart and delivery occasions by reducing delivery times below 30 minutes, making Wingstop newly competitive on third-party platforms.
2. Franchisee-Led Expansion and Unit Economics
Wingstop’s asset-light model, in which franchisees bear the capital risk and drive expansion, is delivering industry-leading returns. Over 95% of new openings in 2025 came from existing brand partners, reflecting strong reinvestment and confidence in the model. The pipeline of sold commitments is at a record high, and international markets are opening at AUVs above domestic averages, with notable launches in Australia, Paris, and soon Italy and the Netherlands.
3. Digital Transformation and Loyalty Flywheel
Digital engagement is central to the growth thesis, with the My Wingstop tech stack now supporting a database of nearly 60 million guests, up 30% year-over-year. Plans for a differentiated loyalty program, piloting in Q4 and launching systemwide in 2026, aim to drive frequency and emotional brand connection rather than just transactional rewards. Management sees this as a lever to deepen engagement and unlock additional digital sales growth.
4. Menu Innovation and Value Messaging
Menu innovation remains a core traffic driver, as evidenced by the relaunch of crispy chicken tenders, which has tripled new and reactivated guests since launch. Bundled value offers, such as the “20 for 20” deal, delivered higher average checks without margin trade-offs, leveraging the brand’s ability to balance value and profitability. Flavor innovation and targeted daypart promotions will remain key levers, especially as Smart Kitchen unlocks lunch and late-night occasions.
5. Brand Awareness and Marketing Leverage
Brand awareness remains below larger peers, but the growing marketing fund is enabling more impactful media investments, including NBA and NFL partnerships. Management highlighted plans to further leverage cultural and sports tie-ins, as well as targeted digital placements, to close the awareness gap and drive incremental traffic.
Key Considerations
Wingstop’s Q2 demonstrates the interplay between operational upgrades, franchisee alignment, and digital scale, all against a backdrop of macro uncertainty and evolving consumer behavior. The following considerations frame the strategic context:
Key Considerations:
- Development Velocity as a Growth Engine: The record pace of openings, with 255 net new units in the first half, is a structural driver of revenue and brand reach, even as comps cycle through tough prior-year comparisons.
- Smart Kitchen’s Multi-Faceted Impact: Beyond speed of service, the new platform is improving consistency, guest satisfaction, labor efficiency, and delivery competitiveness, with early evidence of sustainable sales lifts in mature markets.
- International Ramp Accelerates TAM Expansion: New markets are opening at higher AUVs, and the international pipeline is robust, offering a second leg of growth beyond domestic saturation.
- Digital and Loyalty Levers Remain Underexploited: The transition from transactional to emotionally connected digital engagement is just beginning, with loyalty and personalization set to drive future frequency and retention.
Risks
Consumer demand softness persists in lower-income and Hispanic cohorts, with management noting no improvement in these pockets and cautioning around broader macro uncertainty. Comps remain pressured by extraordinary prior-year growth, and the full benefit of Smart Kitchen and loyalty initiatives will take time to materialize. Competitive intensity in value and delivery, as well as execution risk in global expansion, remain watchpoints for investors.
Forward Outlook
For Q3 2025, Wingstop guided to:
- Return to positive same-store sales growth as the quarter progresses, driven by easier comparisons and ongoing operational initiatives.
- Continued robust net new unit openings, with no sign of development slowdown.
For full-year 2025, management maintained and raised select guidance:
- Global unit growth of 17% to 18%, up from prior 16% to 17%, implying 435 to 460 net new units.
- Domestic same-store sales growth of approximately 1% for the year.
- SG&A of approximately $140 million, with $4.5 million in non-recurring system costs and $26 million in stock-based compensation.
- Adjusted EBITDA growth rate expected to exceed 15% versus 2024.
Management cited confidence in current trends, the operational ramp of Smart Kitchen, and a record development pipeline as key factors supporting guidance, but noted that macroeconomic volatility and consumer sentiment remain external risks.
Takeaways
Wingstop’s Q2 affirms the company’s transformation from a high-growth domestic chain to a global brand platform, driven by operational innovation, digital scale, and franchisee alignment.
- Operational Modernization: The Smart Kitchen rollout is already delivering tangible improvements in speed, guest experience, and sales, with full system impact set for 2026.
- Development-Led Growth: Franchisee demand and international momentum are fueling a structural shift in the growth algorithm, with new units and market entries outpacing legacy comp headwinds.
- Digital Loyalty and Menu Innovation: Upcoming loyalty program and ongoing menu innovation provide underappreciated levers for frequency and ticket growth, especially as digital penetration deepens.
Conclusion
Wingstop’s record unit growth, operational transformation, and digital engagement investments position the brand for durable, multi-year outperformance. While near-term comp softness and macro uncertainty linger, the structural levers in place—Smart Kitchen, international expansion, and loyalty—underscore a robust long-term outlook for investors focused on scalable, asset-light restaurant platforms.
Industry Read-Through
Wingstop’s execution in Q2 highlights a broader industry pivot toward operational technology and digital-driven guest engagement as key differentiators, especially in a value-sensitive, delivery-heavy landscape. The success of proprietary kitchen platforms and franchisee-led development offers a template for scalable growth that may be emulated by other fast-casual and QSR operators. International expansion at higher AUVs signals untapped white space for U.S. brands abroad, while the focus on loyalty and emotional brand connection underscores the next phase of digital transformation in foodservice.