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Wingstop Inc. Reports Fiscal First Quarter 2016 Financial Results

DALLAS, May 05, 2016 (GLOBE NEWSWIRE) -- Wingstop Inc. (WING) today announced fiscal first quarter 2016 financial results for the period ended March 26, 2016 and also raised annual guidance for fiscal year 2016.

Highlights for the Fiscal First Quarter 2016 compared to the Fiscal First Quarter 2015

  • System-wide restaurant count increased 17.2% to 873 worldwide locations
  • Domestic same store sales increased 4.6%
  • Net income increased to $4.3 million, or $0.15 per diluted share, compared to $2.6 million, or $0.10 per diluted share
  • Adjusted EBITDA*, a non-GAAP measure, increased 24.0% to $8.9 million
  • Adjusted net income*, a non-GAAP measure, increased 33.2% to $4.6 million
  • Adjusted earnings per pro-forma diluted share*, a non-GAAP measure, was $0.16, an increase of 33.3% from the prior year period

* Adjusted EBITDA, adjusted net income and adjusted earnings per pro-forma diluted share are non-GAAP measures. Reconciliations of adjusted EBITDA, adjusted net income and adjusted pro-forma diluted EPS to the most directly comparable financial measures presented in accordance with GAAP, are set forth in the schedules accompanying this release. See “Non-GAAP Financial Measures.”

President and Chief Executive Officer Charlie Morrison stated, “We continue to execute on our growth strategy which has resulted in a strong start to 2016, and we are raising our annual earnings guidance for 2016. We opened 28 net new restaurants during the first fiscal quarter and ended with 873 restaurants across 39 states and six countries, representing a unit growth rate of 17% over the prior-year period, and we also increased domestic same store sales by 4.6% during the quarter. This yielded a 16.0% increase in our top-line, which we then leveraged into even higher growth of 24.0% in adjusted EBITDA and 33.2% in adjusted net income.”

Morrison continued, “In addition to the strong results this quarter we have an exciting announcement regarding our future growth. At our Wingstop International Convention held in April, our domestic franchisees voted to accelerate our path to national advertising by one full year as compared to our previous expectation. We will commence our transition and become a national media buyer at the beginning of 2017. This decision will benefit all domestic restaurants across the country by making television advertising available to every market, which we expect will increase brand awareness as we continue our domestic growth.”

Key Operating Metrics for the Fiscal First Quarter 2016 Compared to the Fiscal First Quarter 2015

Thirteen Weeks Ended
March 26,
2016
March 28,
2015
Number of system-wide restaurants open at end of period873745
Number of domestic franchise restaurants open at end of period796681
Number of international franchise restaurants open at end of period5845
System-wide sales (in thousands)$235,821$199,217
System-wide domestic same store sales growth4.6%10.7%
Adjusted EBITDA (in thousands)$8,917$7,194

Fiscal First Quarter 2016 Financial Results

Total revenue for the fiscal first quarter 2016 increased 16.0% to $22.1 million from $19.0 million in the fiscal first quarter last year.

  • Royalty revenue and franchise fees increased 21.0% to $13.5 million from $11.2 million in the fiscal first quarter last year. This was primarily due to a 17.6% increase in the number of franchised restaurants and domestic same store sales growth of 4.6%.
  • Company-owned restaurant sales increased $0.7 million to $8.6 million from $7.9 million in the fiscal first quarter last year. The increase was the result of company-owned domestic same store sales growth of 9.0%.

Cost of sales increased 5.9% to $6.1 million from $5.7 million in the prior fiscal year’s first quarter. As a percentage of company-owned restaurant sales, cost of sales decreased 210 basis points to 70.8% from 72.9%. The decrease was primarily due to the leveraging of fixed costs due to the company-owned same store sales increase of 9.0% and a 1.5% decrease in commodities rates for bone-in-chicken wings as compared to the prior year period.

Selling, general & administrative expenses (SG&A) remained consistent at $7.7 million. SG&A expense included non-recurring costs of $0.5 million related to the follow-on offering during the current period, compared to non-recurring costs of $1.3 million associated with our preparation to become a public company in the comparable period in 2015. The decrease in non-recurring costs was offset primarily by headcount additions and other recurring costs associated with being a public company.

Net income increased 68.0% to $4.3 million, or $0.15 per diluted share, compared to net income of $2.6 million, or $0.10 per diluted share in the prior fiscal year’s first quarter.

Adjusted net income increased 33.2% to $4.6 million, or $0.16 per pro-forma diluted share, compared to $3.4 million, or $0.12 per pro-forma diluted share, in the prior fiscal year’s first quarter. A reconciliation between net income and adjusted net income as well as diluted shares to pro-forma diluted shares is included in the accompanying financial data.

Restaurant Development

As of March 26, 2016, there were 873 Wingstop restaurants system-wide. This included 815 restaurants in the United States, of which 796 were franchised restaurants and 19 were company-owned. Our international footprint consisted of 58 franchised restaurants across five countries. During the first quarter, there were 31 system-wide Wingstop openings, including 29 domestic franchised and 2 international franchised locations.

Fiscal Year 2016 Financial Outlook

For the fiscal year ending December 31, 2016, we are raising our earnings outlook to the following:

  • Total revenue...

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