WingStop Quarterly Earnings: Boost Due to Technology

Wingstop INC. (NASDAQ:WING), announced that in May first-quarter same-store sales grew 7.1% —  beating Wall Street’s expectations of 3.5%. Shares of Wingstop are up more than 26% this year and nearly 62% in the past year, trumping the S&P 500′s performance over the same time frames.

The aviation-themed chicken wing chain was founded in 1994. Wingstop operates more than 1,200 restaurants across the United States,  Mexico, Singapore and seven other countries around the world. The chain’s menu features chicken wings in 11 different flavors including Original Hot, Lemon Pepper and Mango Habanero.
Wingstop is focusing on technology investments to boost sales and mitigate high labor costs. “Every time somebody accesses us, we want the opportunity to digitize that transaction,”  CEO Charles Morrison said in an interview with Jim Cramer on the 6/3 episode of “Mad Money.” “Because a digital transaction tends to have almost a $5 higher average ticket, [it’s] more profitable for our franchisees, which means better return on investment.”
Hot Wings isolated on white. Please see my portfolio for other food related images.

Like many other restaurants, Wingstop is being affected by the low  US unemployment rate which is currently resulting in a labor shortage in the restaurant’s industry. However, Wingstore stores have a small footprint and do not require a large staff to operate. Each restaurant on average is about 1,750 square feet, far smaller than big box rivals like Buffalo Wild Wings.

“We do believe through digital technologies and further digitization of our business we can create efficiencies that create capacity that help us to grow, which will take pressure off the labor line,” says Morrison.
Sintel Systems is a global leader in omni channel solutions for the food industry. Our Direct-to-POS online ordering platform was specifically designed for restaurants. This system allows restaurants of all sorts to have a custom, secure website and mobile app to support customer ability for placing orders on the go. Through our omni channel approach, customers can order with an employee using a hand held device at busy drive thrus, order from a kiosk, order from their phone or order from a computer. If they prefer, they can even order inside the restaurant from staff at the counter. All transactions from devices are seamlessly sent to the kitchen display system (KDS) so that kitchen staff is always in the loop. Sintel Systems has a deep commitment to providing the restaurant industry with user friendly, effective POS solutions that promote order accuracy and customer engagement.