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Wingstop Inc. WING is likely to benefit from digital efforts, unit expansion and strategic partnerships. Also, the emphasis on AI-powered kitchen technology bodes well. However, an uncertain macroeconomic environment is a concern.
Let us discuss the factors that highlight why investors should retain the stock for now.
Factors Driving WING Stock
Digital remains a cornerstone of Wingstop’s growth engine. In 2024, the digital sales mix rose to 70%, underpinned by the launch of the company’s proprietary tech stack, MyWingstop. The digital platform now boasts over 50 million users, reflecting nearly 30% annual growth. With enhanced personalization, increased customer opt-ins and improved return on investment on marketing spend, Wingstop is strengthening both guest frequency and loyalty.
Wingstop is leveraging AI-powered kitchen technology to modernize its back-of-house operations. This initiative aims to significantly reduce quote times, improve consistency and unlock additional demand — especially during high-traffic periods such as lunch. Over 10% of its system is already operating above its new $3 million average unit volume (AUV) target, reinforcing the scalability of this model.
Wingstop is witnessing strong momentum in its development strategy, fueled by robust demand from existing brand partners. In 2024, it achieved a record 349 net new restaurant openings, underscoring confidence in the brand’s growth potential. Looking ahead, the company anticipates unit growth rate of 14% to 15% in 2025. Notably, approximately 95% of new development continues to stem from existing partners reinvesting in the brand, reflecting a high level of franchisee commitment.
Wingstop continues to scale brand awareness through always-on marketing and high-profile partnerships, such as its collaboration with the NBA. Additional partnerships with the NFL, UFC and WWE are poised to further strengthen brand visibility, particularly among younger Gen Z and millennial consumers, resonating with the company’s value proposition.
Looking ahead, Wingstop is focused on executing its multi-year growth strategy with a goal of achieving $3 million in AUV and scaling to over 10,000 global units. With consistent gains in brand consideration, quality and purchase intent, management believes much of the upside potential persists.
Concerns for WING Stock
Image Source: Zacks Investment Research
Shares of Wingstop have declined 16.5% in the past three months against the industry’s 3.1% rise. The downside can be attributed to the uncertain macroeconomic environment.
Wingstop has been continuously incurring increased expenses, which have been detrimental to margins. During the fiscal fourth quarter, Wingstop reported cost of sales totaling $23.3 million, up from $19.7 million in the same period a year ago. As a percentage of company-owned restaurant sales, the cost of sales rose to 77.6% from 75.1%. This uptick was largely attributed to higher food, beverage and packaging costs, primarily stemming from an increase in the price of bone-in chicken wings. Selling, general and administrative expenses increased $3.2 million year over year to $31.2 million. The rise was mainly due to a $3.0 million increase in headcount-related costs, reflecting the company’s continued investment in personnel to support its expanding operations. Going forward, WING remains cautious of inflationary pressures and interest rates changes.