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美國
證券交易委員會
華盛頓特區20549

表格 10-Q

（在以下選項中加上一個）
☒根據1934年證券交易法第13或15(d)節的季度報告
截至季度結束日期的財務報告2024年9月28日
☐根據1934年證券交易法第13或15(d)節的轉型報告書
過渡期從_____到_____

委員會文件號 001-40368001-37425

WINGSTOP INC.
(根據其章程規定的註冊人準確名稱)

特拉華州47-3494862
（設立或組織的其他管轄區域）（內部稅務服務僱主識別號碼）
15505 Wright Brothers Drive
Addison, 得克薩斯州
75001
，（主要行政辦公地址）(郵政編碼)
(972) 686-6500
(註冊人電話號碼，包括區號)

在法案第12(b)條的規定下注冊的證券：
每一類的名稱交易標誌在其上註冊的交易所的名稱
普通股，每股面值0.01美元WING納斯達克全球精選市場

請用勾號表示註冊人是否（1）在過去12個月內已按照1934年證券交易法第13或15(d)條的規定提交了所有要求提交的報告（或在註冊人被要求提交這些報告的更短期間內提交了這些報告），且（2）在過去90天內已受到此類提交要求的制約。x 是   ¨ 否

請在以下勾選方框表示註冊人是否已在Regulation S-T Rule 405規定的前12個月(或在註冊人需要提交此類文件的較短期間內)提交了每個互動數據文件。x 是   ¨ 否

勾選以下選框，指示申報人是大型加速評估提交人、加速評估提交人、非加速評估提交人、小型報告公司或新興成長型公司。關於「大型加速評估提交人」、「加速評估提交人」、「小型報告公司」和「新興成長型公司」的定義，請參見《交易所法規》第12億.2條。


大型加速報告人x加速文件提交人☐
非加速文件提交人☐較小的報告公司☐
新興成長公司☐
如果公司無法符合證券交易法第13(a)條規定，使用延長過渡期來遵守任何新的或修訂的財務會計準則，請在複選框中指示。 ¨
請打勾表明註冊人是否爲殼公司（根據證券交易法規則12b-2定義）。 ☐是x 否
2024年10月29日 29,212,284股普通股。



目錄
第一部分
項目1。
事項二
第3項。
事項4。
第II部分
項目1。
項目1A。
事項二
第3項。
事項4。
項目5。
項目6。


3

第一部分  財務信息
項目1.  基本報表
WINGSTOP INC.及其子公司
合併資產負債表
（金額以千爲單位，股份和麪值金額除外）
 9月28日，
2024		 12月30日
2023
 (未經審計) 
資產 
流動資產 
現金及現金等價物$83,958 $90,216 
受限現金11,444 11,444 
2,687,823 16,939 12,408 
預付費用和其他流動資產7,225 4,948 
廣告基金資產，受限46,671 25,328 
總流動資產166,237 144,344 
資產和設備，淨值119,119 91,292 
營業租賃資產57,753 19,092 
商譽74,749 67,708 
商標32,700 32,700 
客戶關係淨額6,792 7,740 
其他非流動資產27,412 14,949 
總資產$484,762 $377,825 
負債和股東權益
流動負債
應付賬款$10,301 $4,725 
經營租賃負債流動部分3,533 2,380 
其他流動負債58,386 38,571 
廣告基金負債46,671 25,328 
流動負債合計118,891 71,004 
長期負債淨額713,729 712,327 
經營租賃負債60,414 17,807 
遞延收入，扣除流動資產37,007 30,145 
遞延所得稅負債，淨額2,097 3,721 
其他非流動負債90 187 
負債合計932,228 835,191 
承諾和或有事項（見注7）
股東赤字
普通股，每股面值爲 $0.0001；0.01每股面值; 100,000,000 29,212,082和頁面。29,337,920 截至2024年9月28日和2023年12月30日，其發行和未流通股份分別爲
292 293 
股本溢價1,515 2,676 
赤字(449,336)(459,994)
累計其他綜合損失63 (341)
股東赤字合計(447,466)(457,366)
負債和股東赤字總計$484,762 $377,825 
有關合並財務報表的附註請參閱。
4

WINGSTOP INC.及其子公司
綜合收益的合併報表
（金額爲千美元，除每股數據外）
(未經審計)
 十三週結束三十九周已結束
 9月28日
2024		九月三十日
2023		9月28日
2024		九月三十日
2023
收入：  
特許權使用費收入、特許經營費和其他$74,395 $53,200 $212,652 $149,372 
廣告費56,764 39,951 161,567 114,010 
公司自有餐廳的銷售31,339 23,953 89,767 69,616 
總收入162,498 117,104 463,986 332,998 
成本和支出：  
銷售成本 (1)
24,367 17,622 68,311 50,959 
廣告費用60,965 42,381 172,705 120,753 
銷售、一般和管理32,294 23,047 85,569 68,820 
折舊和攤銷5,054 3,384 13,625 9,591 
資產處置損失— 18 — 95 
總成本和支出122,680 86,452 340,210 250,218 
營業收入39,818 30,652 123,776 82,780 
利息支出，淨額5,130 4,520 14,874 13,337 
其他（收入）支出(800)(19)(1,574)123 
所得稅支出前的收入35,488 26,151 110,476 69,320 
所得稅支出9,756 6,640 28,512 17,959 
淨收入$25,732 $19,511 $81,964 $51,361 
每股收益
基本$0.88 $0.66 $2.80 $1.72 
稀釋$0.88 $0.65 $2.78 $1.71 
加權平均已發行股數
基本29,265 29,750 29,319 29,889 
稀釋29,383 29,818 29,441 29,969 
每股分紅$0.27 $0.22 $0.71 $0.60 
其他綜合收益（虧損）
貨幣折算調整$440 $(199)$404 $76 
其他綜合收益（虧損）440 (199)404 76 
綜合收益$26,172 $19,312 $82,368 $51,437 

(1) 銷售成本包括公司自營餐廳的所有營業費用，包括廣告費用，不包括折舊和攤銷費用，這些費用單獨列示。
See accompanying notes to consolidated financial statements.


5

WINGSTOP INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Deficit
For the Thirty-Nine Weeks Ended September 30, 2023
(amounts in thousands, except share data)
(Unaudited)
Common Stock
SharesAmount
Additional
Paid-In Capital
Retained DeficitAccumulated Other Comprehensive LossTotal Stockholders’ Deficit
Balance at December 31, 202229,932,668 $300 $2,797 $(393,321)$(637)$(390,861)
Net income— — — 15,669 — 15,669 
Shares issued under stock plans49,817 — 111 — — 111 
Tax payments for restricted stock upon vesting(13,613)— — (2,292)— (2,292)
Stock-based compensation expense, net of forfeitures— — 3,345 — — 3,345 
Dividends declared on common stock and equivalents— — (5,444)(465)— (5,909)
Currency translation adjustment— — — — 147 147 
Balance at April 1, 202329,968,872 300 809 (380,409)(490)(379,790)
Net income— — — 16,181 — 16,181 
Shares issued under stock plans9,084 — 362 — — 362 
Tax payments for restricted stock upon vesting(342)— — (69)— (69)
Stock-based compensation expense, net of forfeitures— — 3,546 — — 3,546 
Dividends declared on common stock and equivalents— — (2,679)(3,030)— (5,709)
Currency translation adjustment— — — — 128 128 
Balance at July 1, 202329,977,614 $300 $2,038 $(367,327)$(362)$(365,351)
Net income— — — 19,511 — 19,511 
Shares issued under stock plans4,857 — 270 — — 270 
Purchases of common stock(567,151)(6)(241)(125,878)— (126,125)
Tax payments for restricted stock upon vesting(400)— — (66)— (66)
Stock-based compensation expense, net of forfeitures— — 3,128 — — 3,128 
Dividends declared on common stock and equivalents— — (3,957)(2,653)— (6,610)
Currency translation adjustment— $— $— $— $(199)$(199)
Balance at September 30, 202329,414,920 $294 $1,238 $(476,413)$(561)$(475,442)
See accompanying notes to consolidated financial statements.
6

WINGSTOP INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Deficit
For the Thirty-Nine Weeks Ended September 28, 2024
(amounts in thousands, except share data)
(Unaudited)
Common Stock
SharesAmountAdditional
Paid-In Capital		Retained DeficitAccumulated Other Comprehensive LossTotal Stockholders’ Deficit
Balance at December 30, 202329,337,920 $293 $2,676 $(459,994)$(341)$(457,366)
Net income— — — 28,747 — 28,747 
Shares issued under stock plans42,918 1 707 — — 708 
Tax payments for restricted stock upon vesting(10,860)— — (3,717)— (3,717)
Stock-based compensation expense, net of forfeitures— — 3,812 — — 3,812 
Dividends declared on common stock and equivalents— — (6,277)(262)— (6,539)
Currency translation adjustment— — — — (24)(24)
Balance at March 30, 202429,369,978 294 918 (435,226)(365)(434,379)
Net income— — — 27,485 — 27,485 
Shares issued under stock plans11,323 — 546 — — 546 
Purchases of common stock(75,862)(1)(4,304)(24,915)— (29,220)
Tax payments for restricted stock upon vesting(1,038)— — (401)— (401)
Stock-based compensation expense, net of forfeitures— — 4,926 — — 4,926 
Dividends declared on common stock and equivalents— — (217)(6,269)— (6,486)
Currency translation adjustment— — — — (12)(12)
Balance at June 29, 202429,304,401 $293 $1,869 $(439,326)$(377)$(437,541)
Net income— — — 25,732 — 25,732 
Shares issued under stock plans1,850 — — — — — 
Purchases of common stock(93,617)(1)(7,307)(27,887)— (35,195)
Tax payments for restricted stock upon vesting(552)— — (230)— (230)
Stock-based compensation expense, net of forfeitures— — 7,273 — — 7,273 
Dividends declared on common stock and equivalents— — (320)(7,625)— (7,945)
Currency translation adjustment— — — — 440 440 
Balance at September 28, 202429,212,082 $292 $1,515 $(449,336)$63 $(447,466)
See accompanying notes to consolidated financial statements.
7

WINGSTOP INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(amounts in thousands)
(Unaudited)
 Thirty-Nine Weeks Ended
 September 28,
2024		September 30,
2023
Operating activities  
Net income$81,964 $51,361 
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization13,625 9,591 
Deferred income taxes(1,624)(1,200)
Stock-based compensation expense16,011 10,019 
Loss on disposal of assets— 95 
Amortization of debt issuance costs1,561 1,530 
Changes in operating assets and liabilities:
Accounts receivable(4,531)(2,490)
Prepaid expenses and other assets(9,159)(20)
Advertising fund assets and liabilities, net17,718 9,596 
Accounts payable and other current liabilities22,097 2,992 
Deferred revenue7,227 2,054 
Other non-current liabilities4,979 219 
Cash provided by operating activities149,868 83,747 
Investing activities
Purchases of property and equipment(35,575)(28,295)
Acquisition of restaurants from franchisee(14,048)(4,396)
Payments for investments(500)(808)
Cash used in investing activities(50,123)(33,499)
Financing activities
Proceeds from exercise of stock options1,254 743 
Repayments of long-term debt— (3,650)
Purchases of common stock(64,210)(125,250)
Tax payments for restricted stock upon vesting(4,348)(2,427)
Dividends paid(20,981)(18,433)
Cash used in financing activities(88,285)(149,017)
Net increase in cash, cash equivalents, and restricted cash11,460 (98,769)
Cash, cash equivalents, and restricted cash at beginning of period119,676 205,715 
Cash, cash equivalents, and restricted cash at end of period$131,136 $106,946 
Supplemental information:
Accrued capital expenditures$5,196 $4,622 

See accompanying notes to consolidated financial statements.
8
WINGSTOP INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)

(1)    Basis of Presentation and Update to Significant Accounting Policies
Nature of operations. Wingstop Inc., together with its consolidated subsidiaries (collectively, “Wingstop” or the “Company”), is in the business of franchising and operating Wingstop restaurants. As of September 28, 2024, the Company had a total of 2,458 restaurants system-wide. The Company’s restaurant base is approximately 98% franchised, with 2,402 franchised locations (including 338 restaurants in international locations and U.S. territories) and 56 company-owned restaurants as of September 28, 2024.
Basis of presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Consequently, financial information and disclosures normally included in financial statements prepared annually in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. Balance sheet amounts are as of September 28, 2024 and December 30, 2023, and operating results are for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023.
Certain prior period information on the Consolidated Balance Sheets have been reclassified to conform to the current presentation.
In the Company’s opinion, all necessary adjustments have been made for the fair presentation of the results of the interim periods presented. The results of operations for such interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying interim unaudited consolidated financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023 (the “Annual Report”).
Fiscal year. The Company uses a 52- or 53-week fiscal year that ends on the last Saturday of the calendar year. Fiscal years 2024 and 2023 each have 52 weeks.
Cash, Cash Equivalents, and Restricted Cash. Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of September 28, 2024 and December 30, 2023 were as follows (in thousands):
September 28, 2024December 30, 2023
Cash and cash equivalents$83,958 $90,216 
Restricted cash11,444 11,444 
Restricted cash, included in Advertising fund assets, restricted35,734 18,016 
Total cash, cash equivalents, and restricted cash$131,136 $119,676 
Recently issued accounting pronouncements. We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements. There have been no changes to the recently issued accounting pronouncements not yet adopted disclosed in the Annual Report.
(2)    Earnings per Share
Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities convertible into, or other contracts to issue, common stock were exercised or converted into common stock. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of the exercise and vesting of stock options and service-based and performance-based restricted stock units, respectively, as determined using the treasury stock method.
9
WINGSTOP INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands):
Thirteen Weeks EndedThirty-Nine Weeks Ended
September 28,
2024		September 30,
2023		September 28,
2024		September 30,
2023
Basic weighted average shares outstanding29,265 29,750 29,319 29,889 
Dilutive shares118 68 122 80 
Diluted weighted average shares outstanding29,383 29,818 29,441 29,969 
No equity awards were excluded from the dilutive earnings per share calculation for the thirteen and thirty-nine weeks ended September 28, 2024. For the thirteen and thirty-nine weeks ended September 30, 2023, equity awards representing approximately 9,000 and 5,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive.
(3)    Stockholders’ Deficit
Dividends
In connection with the Company’s regular dividend program, our Board of Directors declared a quarterly dividend of $0.22 per share of common stock in each of the first two quarters of 2024, and a quarterly dividend of $0.27 per share of common stock in the third quarter of 2024, resulting in aggregate declared dividends of $20.8 million, or $0.71 per share of common stock, during the thirty-nine weeks ended September 28, 2024.

Subsequent to the third quarter, on October 29, 2024, our Board of Directors declared a regular quarterly dividend of $0.27 per share of common stock for stockholders of record as of November 15, 2024. The regular quarterly dividend is to be paid on December 6, 2024, totaling approximately $7.9 million.
Share Repurchase Program
On August 17, 2023, the Company announced a share repurchase program with authorization to purchase up to $250.0 million of its outstanding shares of common stock (the “Share Repurchase Program”). During the thirty-nine weeks ended September 28, 2024, the Company repurchased and retired 169,479 shares of its common stock at an average price of $377.09 per share. As of September 28, 2024, $61.1 million remained available under the Share Repurchase Program.
(4)    Fair Value Measurements
Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. Assets and liabilities are classified using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows:
Level 1 — Unadjusted quoted prices for identical instruments traded in active markets.
Level 2 — Observable market-based inputs or unobservable inputs corroborated by market data.
Level 3 — Unobservable inputs reflecting management’s estimates and assumptions.
10
WINGSTOP INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
The carrying values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short-term nature. Fair value of debt and the investment in bonds issued by the Company’s United Kingdom master franchisee, Lemon Pepper Holdings Ltd. (“LPH”), are determined on a non-recurring basis, which results are summarized as follows (in thousands):
 
Fair Value
Hierarchy
 September 28, 2024December 30, 2023
  
Carrying
Value
 Fair Value
Carrying
Value
Fair Value
Securitized Financing Facility:
2020-1 Class A-2 Senior Secured Notes (1)
Level 2$472,800 $445,945 $472,800 $423,823 
2022-1 Class A-2 Senior Secured Notes (1)
Level 2$248,125 $235,421 $248,125 $222,370 
Investments in bonds of LPH (2)
Level 3$3,884 $4,669 $3,557 $4,306 
(1) The fair value of the 2020-1 and 2022-1 Class A-2 Senior Secured Notes was estimated using available market information.
(2) The fair value approximates discounted cash flows using current market rates for debt investments with similar maturities and credit risk.
The Company also measures certain non-financial assets (primarily long-lived assets, intangible assets, and goodwill) at fair value on a non-recurring basis in connection with its periodic evaluations of such assets for potential impairment.
(5)    Income Taxes
Income tax expense and the effective tax rate were $9.8 million and 27.5%, respectively, for the thirteen weeks ended September 28, 2024, and $6.6 million and 25.4%, respectively, for the thirteen weeks ended September 30, 2023. The increase in the effective tax rate is primarily related to the impact of nondeductible expenses for executive compensation in the current fiscal year period. Income tax expense and the effective tax rate were $28.5 million and 25.8%, respectively, for the thirty-nine weeks ended September 28, 2024, and $18.0 million and 25.9%, respectively, for the thirty-nine weeks ended September 30, 2023.
(6)    Debt Obligations
Long-term debt consisted of the following components (in thousands):
September 28, 2024December 30, 2023
2020-1 Class A-2 Senior Secured Notes$472,800 $472,800 
2022-1 Class A-2 Senior Secured Notes248,125 248,125 
Debt issuance costs, net of amortization(7,196)(8,598)
Total debt713,729 712,327 
The Company’s outstanding debt was issued by Wingstop Funding LLC, a limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiary of Wingstop Inc. and consists of (i) Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Class A-2 Notes”), (ii) Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Class A-2 Notes”), and (iii) a revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “2022 Variable Funding Notes,” and together with the 2022 Class A-2 Notes, the “2022 Notes”), which permits borrowings of up to a maximum principal amount of $200 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit.
No borrowings were outstanding under the 2022 Variable Funding Notes as of September 28, 2024 and December 30, 2023.
As of September 28, 2024, the Company’s leverage ratio under the 2020 Class A-2 Notes and the 2022 Class A-2 Notes was less than 5.0x. Per the terms of the Company’s debt agreements, principal payments can be suspended at the borrower’s election until the repayment date, as long as the Company maintains a leverage ratio of less than 5.0x. Accordingly, the Company elected to suspend payments following the principal payment made in the second quarter of 2023, and the entire outstanding balance of $720.9 million of the 2020 Class A-2 Notes and the 2022 Class A-2 Notes has been classified as long-term debt due after fiscal year 2026.
11
WINGSTOP INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
The 2020 Class A-2 Notes and 2022 Notes were issued in securitization transactions, and are guaranteed by certain limited-purpose, bankruptcy-remote, wholly-owned indirect subsidiaries of the Company and secured by a security interest in substantially all of their assets, including certain domestic and foreign revenue-generating assets, consisting principally of franchise-related agreements, intellectual property, and vendor rebate contracts.
(7)    Commitments and Contingencies
The Company is subject to legal proceedings, claims, and liabilities, including claims and actions resulting from employment-related and franchise-related matters, which arise in the ordinary course of business and are generally covered by insurance. In the opinion of management, the amount of ultimate liability with respect to such actions is not likely to have a material adverse impact on the Company’s financial position, results of operations, or cash flows.
(8)     Leases
The Company has operating leases for retail store locations, office space, and equipment. The Company determines whether an arrangement is a lease at inception. The Company's leases have remaining terms of 0.2 years to 13.3 years, some of which include options to extend the lease term for up to ten years. The years remaining on the Company’s lease terms may include years that may be added to the lease terms by the exercise of options to renew when it is reasonably certain that the Company will exercise such options.
During the first fiscal quarter 2024, the Company executed a lease for an office building, which commenced in May 2024. The operating lease has an initial lease term of 13.8 years with undiscounted fixed payments of $66.9 million over the initial term.
Components of lease expense were as follows (in thousands):
Thirty-Nine Weeks Ended
September 28,
2024		September 30,
2023
Operating lease cost (1)
4,728 2,623 
Variable lease cost (2)
570 447 
Total lease cost
5,298 3,070 
(1) Includes short-term leases, which are immaterial.
(2) Primarily related to adjustments for inflation, common area maintenance, and property tax.
Supplemental cash flow information related to leases is as follows (in thousands):
Thirty-Nine Weeks Ended
September 28,
2024		September 30,
2023
Cash paid (received) for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)
$(4,849)$2,518 
Right-of-use assets obtained in exchange for new operating lease liabilities$41,260 $3,947 
(1) Includes tenant improvement reimbursements received.
(9)    Stock-Based Compensation
During the thirty-nine weeks ended September 28, 2024, the Company granted 25,257 restricted stock units (“RSUs”) to certain employees. The RSUs granted to certain employees generally vest ratably over a three-year period subsequent to the grant date and had a weighted-average grant-date fair value of $372.52 per unit.
In addition, the Company granted 24,015 performance stock units (“PSUs”) to certain employees during the thirty-nine weeks ended September 28, 2024. Of the total PSUs granted, 20,593 PSUs are subject to a service condition and a performance vesting condition based on return on incremental invested capital (“ROI PSUs”). The ROI PSUs are generally eligible to cliff-vest approximately three years from the grant date, and the maximum vesting percentage that could be realized for each of the ROI PSUs is 250% based on the level of performance achieved for the awards. The remaining 3,422 PSUs granted are subject to a service condition and a performance vesting condition based on the number of net new restaurants opened over the
12
WINGSTOP INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
performance period (“NNR PSUs”). The NNR PSUs vest ratably over a three-year period, and the maximum vesting percentage that could be realized for each of the NNR PSUs is 100% based on the level of performance achieved for the awards. The PSUs had a weighted-average grant-date fair value of $371.03 per unit. Total compensation cost for the PSUs is determined based on the most likely outcome of the performance condition and the number of awards expected to vest based on the outcome.

Total compensation expense related to all share-based awards, net of forfeitures recognized, was $16.0 million and $10.0 million for the thirty-nine weeks ended September 28, 2024 and September 30, 2023, respectively, and was included in Selling, general and administrative (“SG&A”) expense in the Consolidated Statements of Comprehensive Income.
(10)    Revenue from Contracts with Customers
The following table represents a disaggregation of revenue from contracts with customers for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023 (in thousands):
Thirteen Weeks EndedThirty-Nine Weeks Ended
September 28, 2024September 30, 2023September 28, 2024September 30, 2023
Royalty revenue$66,952 $47,546 $192,344 $134,330 
Advertising fees and related income56,764 39,951 161,567 114,010 
Franchise fees1,419 1,660 4,101 3,828 

Franchise fee, development fee, and international territory fee payments received by the Company are recorded as deferred revenue on the Consolidated Balance Sheets, which represents a contract liability. Deferred revenue is reduced as fees are recognized in revenue over the term of the franchise license for the respective restaurant. As the term of the franchise license is typically ten years, substantially all of the franchise fee revenue recognized in the thirteen and thirty-nine weeks ended September 28, 2024 was included in the deferred revenue balance as of December 30, 2023. Approximately $12.5 million and $9.3 million of deferred revenue as of September 28, 2024 and December 30, 2023, respectively, relates to restaurants that have not yet opened, so the fees are not yet being amortized. The weighted average remaining amortization period for deferred franchise and renewal fees related to open restaurants is 7.3 years. The Company did not have any material contract assets as of September 28, 2024.
(11)    Acquisitions of Company-owned Restaurants
The Company acquired four existing restaurants from franchisees during the thirty-nine weeks ended September 28, 2024. The aggregate purchase price was $14.0 million and was funded by cash flow from operations. The following table summarizes the allocations of the purchase price to the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition (in thousands):
Purchase Price Allocation
Working capital$44 
Property and equipment253 
Reacquired franchise rights6,710 
Goodwill7,041 
Total purchase price$14,048 
The excess of the purchase price over the aggregate fair value of assets acquired was allocated to goodwill and is attributable to the benefits expected as a result of the acquisition, including sales and unit growth opportunities. All of the goodwill from the acquisition is expected to be deductible for federal income tax purposes.
Pro-forma financial information of the combined entities is not presented due to the immaterial impact of the financial results of the acquisition on our consolidated financial statements.
13

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations of Wingstop Inc. (collectively with its direct and indirect subsidiaries on a consolidated basis, “Wingstop,” the “Company,” “we,” “our,” or “us”) should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes in Part I, Item 1 of this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023 (our “Annual Report”). The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources, and other non-historical statements are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Special Note Regarding Forward-Looking Statements,” below and “Risk Factors” beginning on page 11 of our Annual Report. Our actual results may differ materially from those contained in or implied by any forward-looking statements.
We operate on a 52- or 53-week fiscal year ending on the last Saturday of each calendar year. Our fiscal quarters are comprised of 13 weeks, with the exception of the fourth quarter of a 53-week year, which contains 14 weeks. Fiscal years 2024 and 2023 each contain 52 weeks.
Overview
Wingstop is the largest fast casual chicken wings-focused restaurant chain in the world, with over 2,450 locations worldwide. We are dedicated to serving the world flavor through an unparalleled guest experience and offering of classic wings, boneless wings, tenders, and chicken sandwiches, always cooked to order and hand-sauced-and-tossed in 12 bold, distinctive flavors.
The Company is primarily a franchisor, with approximately 98% of Wingstop’s restaurants currently owned and operated by independent franchisees. We believe our asset-light, highly-franchised business model generates strong operating margins and requires low capital expenditures, creating stockholder value through strong and consistent free cash flow and capital-efficient growth.
Third Quarter of 2024 Highlights
•System-wide sales increased 39.4% over the prior fiscal third quarter to $1.2 billion;
•106 net new openings in the fiscal third quarter 2024 for a total of 2,458 worldwide locations;
•Domestic same store sales increased 20.9% over the prior fiscal third quarter;
•Company-owned restaurant same store sales increased 7.3% over the prior fiscal third quarter;
•Digital sales increased to 69.0% of system-wide sales, as compared to 66.9% in the prior fiscal third quarter;
•Domestic AUV increased to $2.1 million;
•Total revenue increased 38.8% over the prior fiscal third quarter to $162.5 million;
•Net income increased 31.9% to $25.7 million, or $0.88 per diluted share, compared to net income of $19.5 million, or $0.65 per diluted share, in the prior fiscal third quarter; and
•Adjusted EBITDA, a non-GAAP measure, increased 39.5% to $53.7 million, compared to adjusted EBITDA of $38.5 million in the prior fiscal third quarter.
Year-to-Date Third Quarter of 2024 Highlights
•System-wide sales increased 40.4% to $3.5 billion;
•244 net new openings in the year-to-date third quarter of 2024;
•Domestic same store sales increased 23.6% over the prior fiscal year-to-date period;
•Total revenue increased 39.3% to $464.0 million over the prior fiscal year-to-date period;
•Net income increased 59.6% to $82.0 million, or $2.78 per diluted share, compared to net income of $51.4 million, or $1.71 per diluted share, in the prior fiscal year-to-date period; and
•Adjusted EBITDA, a non-GAAP measure, increased 45.0% to $155.7 million, compared to adjusted EBITDA of $107.4 million in the prior fiscal year-to-date period.
14

Key Performance Indicators
Key measures that we use in evaluating our restaurants and assessing our business include the following:
Number of restaurants. Management reviews the number of new restaurants, the number of closed restaurants, and the number of acquisitions and divestitures of restaurants to assess net new restaurant growth.
Thirteen Weeks EndedThirty-Nine Weeks Ended
September 28,
2024		September 30,
2023		September 28,
2024		September 30,
2023
Domestic Franchised Activity:
Beginning of period1,988 1,749 1,877 1,678 
Openings79 42 191 116 
Closures— — — (1)
Acquired by Company(3)— (4)(2)
Restaurants end of period2,064 1,791 2,064 1,791 
Domestic Company-Owned Activity:
Beginning of period52 45 49 43 
Openings1 1 3 1 
Closures— — — — 
Acquired by Company3 — 4 2 
Restaurants end of period56 46 56 46 
Total Domestic Restaurants2,120 1,837 2,120 1,837 
International Franchised Activity(1):
Beginning of period312 252 288 238 
Openings28 13 55 30 
Closures(2)(3)(5)(6)
Restaurants end of period338 262 338 262 
Total System-wide Restaurants2,458 2,099 2,458 2,099 
(1) Including U.S. territories.
System-wide sales. System-wide sales represents net sales for all of our company-owned and franchised restaurants, as reported by franchisees. This measure allows management to better assess changes in our royalty revenue, our overall store performance, the health of our brand, and the strength of our market position relative to competitors. Our system-wide sales growth is driven by new restaurant openings as well as increases in same store sales.
Domestic average unit volume (“AUV”). Domestic AUV consists of the average annual sales of all restaurants that have been open for a trailing 52-week period or longer. This measure is calculated by dividing sales during the applicable period for all restaurants being measured by the number of restaurants being measured. Domestic AUV includes revenue from both company-owned and franchised restaurants. Domestic AUV allows management to assess our domestic company-owned and franchised restaurant economics. Changes in domestic AUV growth are primarily driven by increases in same store sales and are also influenced by opening new restaurants.
Domestic same store sales. Domestic same store sales reflects the change in year-over-year sales for the same store restaurant base. We define the same store restaurant base to include those restaurants open for at least 52 full weeks. This measure highlights the performance of existing restaurants, while excluding the impact of new restaurant openings and permanent closures. We review same store sales for domestic company-owned restaurants as well as system-wide domestic restaurants. Domestic same store sales growth is driven by increases in transactions and average transaction size. Transaction size increases are driven by price increases or favorable mix shift from either an increase in items purchased or shifts into higher priced items.
15

 EBITDA and Adjusted EBITDA. We define EBITDA as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization. We define Adjusted EBITDA as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization, with further adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, system implementation costs, and stock-based compensation expense. Adjusted EBITDA may not be comparable to other similarly titled captions of other companies due to differences in methods of calculation. For a reconciliation of net income to EBITDA and Adjusted EBITDA and for further discussion of EBITDA and Adjusted EBITDA as non-GAAP measures and how we utilize them, see footnote 2 below.
The following table sets forth our key performance indicators for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023 (in thousands, except unit data):
Thirteen Weeks EndedThirty-Nine Weeks Ended
September 28, 2024September 30, 2023September 28, 2024September 30, 2023
Number of system-wide restaurants open at end of period2,458 2,099 2,458 2,099 
System-wide sales (1)
$1,233,373 $885,045 $3,532,891 $2,516,427 
Domestic restaurant AUV$2,116 $1,755 $2,116 $1,755 
Domestic same store sales growth20.9 %15.3 %23.6 %17.3 %
Company-owned domestic same store sales growth7.3 %6.0 %9.1 %7.2 %
Total revenue$162,498 $117,104 $463,986 $332,998 
Net income$25,732 $19,511 $81,964 $51,361 
Adjusted EBITDA (2)
$53,672 $38,483 $155,713 $107,417 
(1) The percentage of system-wide sales attributable to company-owned restaurants was 2.5% and 2.7% for the thirteen weeks ended September 28, 2024 and September 30, 2023, respectively, and was 2.5% and 2.8% for the thirty-nine weeks ended September 28, 2024 and September 30, 2023, respectively. The remainder was generated by franchised restaurants, as reported by our franchisees.
(2) EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. EBITDA and Adjusted EBITDA should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity.
We caution investors that amounts presented in accordance with our definitions of EBITDA and Adjusted EBITDA may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate EBITDA and Adjusted EBITDA in the same manner. We present EBITDA and Adjusted EBITDA because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. Many investors are interested in understanding the performance of our business by comparing our results from ongoing operations on a period-over-period basis and would ordinarily add back non-cash expenses such as depreciation and amortization, as well as items that are not part of normal day-to-day operations of our business.
Management uses EBITDA and Adjusted EBITDA:
•as a measurement of operating performance because we believe they assist us in comparing the operating performance of our restaurants on a consistent basis, as they remove the impact of items not directly resulting from our core operations;
•for planning purposes, including the preparation of our internal annual operating budget and financial projections;
•to evaluate the performance and effectiveness of our operational strategies;
•to evaluate our capacity to fund capital expenditures and expand our business; and
16

•to calculate incentive compensation payments for our employees, including assessing performance under our annual incentive compensation plan.
By providing these non-GAAP financial measures, together with a reconciliation to the most comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation, or as an alternative to, or a substitute for net income or other financial statement data presented in our consolidated financial statements as indicators of financial performance. Some of the limitations are:
•such measures do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
•such measures do not reflect changes in, or cash requirements for, our working capital needs;
•such measures do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;
•such measures do not reflect our tax expense or the cash requirements to pay our taxes;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and
•other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.
Due to these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only as performance measures and supplementally. As noted in the table below, Adjusted EBITDA includes adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, system implementation costs, and stock-based compensation expense. We believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our restaurants, and complicate comparisons of our internal operating results and operating results of other restaurant companies over time. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below help management measure our core operating performance over time by removing items that are not related to day-to-day operations.
The following table reconciles net income to EBITDA and Adjusted EBITDA for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023 (in thousands):
Thirteen Weeks EndedThirty-Nine Weeks Ended
September 28,
2024		September 30,
2023		September 28,
2024		September 30,
2023
Net income$25,732 $19,511 $81,964 $51,361 
Interest expense, net5,130 4,520 14,874 13,337 
Income tax expense9,756 6,640 28,512 17,959 
Depreciation and amortization5,054 3,384 13,625 9,591 
EBITDA$45,672 $34,055 $138,975 $92,248 
Additional adjustments:
Consulting fees (a)
— 1,300 — 5,150 
System implementation costs (b)
727 — 727 — 
Stock-based compensation expense (c)
7,273 3,128 16,011 10,019 
Adjusted EBITDA$53,672 $38,483 $155,713 $107,417 
(a) Represents non-recurring consulting fees that are not part of our ongoing operations and are incurred to execute discrete, project-based strategic initiatives, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income. The costs incurred in the thirteen and thirty-nine weeks ended September 30, 2023 include consulting fees relating to a comprehensive review of our long-term growth strategy for our domestic business to explore potential future initiatives, which review was completed in fiscal year 2023. Given the magnitude and scope of
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this strategic review that is not expected to recur in the foreseeable future, the Company considers the incremental consulting fees incurred with respect to the initiative not reflective of the ongoing costs to operate its business.
(b) System implementation costs represent non-recurring expenses incurred related to the development and implementation of new enterprise resource planning and human capital management technology, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.
(c) Includes non-cash, stock-based compensation, net of forfeitures.
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Results of Operations
Thirteen Weeks Ended September 28, 2024 compared to Thirteen Weeks Ended September 30, 2023
The following table sets forth our results of operations for the thirteen weeks ended September 28, 2024 and September 30, 2023 (dollars in thousands):
Thirteen Weeks EndedIncrease / (Decrease)
September 28,
2024		September 30,
2023		$%
Revenue:
Royalty revenue, franchise fees and other$74,395 $53,200 $21,195 39.8 %
Advertising fees56,764 39,951 16,813 42.1 %
Company-owned restaurant sales31,339 23,953 7,386 30.8 %
Total revenue162,498 117,104 45,394 38.8 %
Costs and expenses:
Cost of sales (1)
24,367 17,622 6,745 38.3 %
Advertising expenses60,965 42,381 18,584 43.8 %
Selling, general and administrative32,294 23,047 9,247 40.1 %
Depreciation and amortization5,054 3,384 1,670 49.3 %
Loss on disposal of assets— 18 (18)(100.0)%
Total costs and expenses122,680 86,452 36,228 41.9 %
Operating income39,818 30,652 9,166 29.9 %
Interest expense, net5,130 4,520 610 13.5 %
Other (income) expense(800)(19)(781)4,110.5 %
Income before income tax expense35,488 26,151 9,337 35.7 %
Income tax expense9,756 6,640 3,116 46.9 %
Net income$25,732 $19,511 $6,221 31.9 %
(1) Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, but excludes depreciation and amortization, which are presented separately.
Revenue
During the thirteen weeks ended September 28, 2024, total revenue was $162.5 million, an increase of $45.4 million, or 38.8%, compared to $117.1 million in the comparable period in 2023.

Royalty revenue, franchise fees and other increased $21.2 million, of which $9.6 million was due to domestic same store sales growth of 20.9%, and $9.3 million was due to net new franchise restaurant development. Other revenue increased by $2.1 million primarily due to an increase in vendor rebates.

Advertising fees increased $16.8 million primarily due to a 39.4% increase in system-wide sales during the fiscal third quarter 2024. $3.2 million of the increase was due to an increase in the national advertising fund contribution rate to 5.3% from 5.0%, effective the first day of the fiscal second quarter 2024.

Company-owned restaurant sales increased $7.4 million, due to an increase of $4.9 million related to the addition of ten net new company-owned restaurants since the prior fiscal third quarter. The remainder of the increase was due to company-owned same store sales growth of 7.3%, which was driven primarily by an increase in transactions.
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Cost of sales
The table below presents the major components of cost of sales (dollars in thousands):
Thirteen Weeks Ended
September 28, 2024September 30, 2023
In dollarsAs a % of company-owned restaurant salesIn dollarsAs a % of company-owned restaurant sales
Food, beverage and packaging costs$11,590 37.0 %$7,910 33.0 %
Labor costs7,355 23.5 %5,646 23.6 %
Other restaurant operating expenses6,270 20.0 %4,645 19.4 %
Vendor rebates(848)(2.7)%(579)(2.4)%
Total cost of sales$24,367 77.8 %$17,622 73.6 %
Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 37.0% in the thirteen weeks ended September 28, 2024, compared to 33.0% in the comparable period in 2023. This increase was primarily due to a 42.9% increase in the cost of bone-in chicken wings as compared to the prior year period. Our purchases in the prior fiscal third quarter were tied primarily to the spot market, which benefited from significant deflation in the cost of bone-in chicken wings.
Labor costs as a percentage of company-owned restaurant sales were 23.5% for the thirteen weeks ended September 28, 2024, which was comparable to 23.6% for the thirteen weeks ended September 30, 2023.
Other restaurant operating expenses as a percentage of company-owned restaurant sales were 20.0% for the thirteen weeks ended September 28, 2024, compared to 19.4% for the thirteen weeks ended September 30, 2023. The increase as a percentage of company-owned restaurant sales was primarily due to an increase in the national advertising fund contribution rate to 5.3% from 5.0%, effective the first day of the fiscal second quarter 2024, as well as an increase in pre-opening expenses as compared to the prior year period.
Advertising expenses
During the thirteen weeks ended September 28, 2024, advertising expenses were $61.0 million, an increase of $18.6 million compared to $42.4 million in the comparable period in 2023. Advertising expenses are recognized at the same time the related revenue is recognized, which does not necessarily correlate to the actual timing of the related advertising spend.
Selling, general and administrative (“SG&A”)
During the thirteen weeks ended September 28, 2024, SG&A expense was $32.3 million, an increase of $9.2 million compared to $23.0 million in the comparable period in 2023. The increase in SG&A expense was driven by an increase in performance-based stock compensation and incentive compensation expense of $4.9 million primarily related to the Company’s performance, an increase in headcount related expenses of $2.8 million to support the growth in our business, and an increase in consulting and other professional fees of $1.3 million associated with our strategic initiatives, including system implementation costs.
Depreciation and amortization
During the thirteen weeks ended September 28, 2024, depreciation and amortization was $5.1 million, an increase of $1.7 million compared to $3.4 million in the comparable period in 2023. The increase in depreciation and amortization was primarily due to depreciation expense for the software assets placed in service during the second fiscal quarter 2024 related to our MyWingstop technology platform.
Interest expense, net
During the thirteen weeks ended September 28, 2024, interest expense, net was $5.1 million, an increase of $0.6 million compared to $4.5 million of interest expense, net in the comparable period in 2023. The increase was primarily driven by additional interest income earned on our cash balances during the thirteen weeks ended September 30, 2023.


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Income tax expense
During the thirteen weeks ended September 28, 2024, we recognized income tax expense of $9.8 million, yielding an effective tax rate of 27.5%, compared to an effective tax rate of 25.4% in the prior year period. The increase in the effective tax rate is primarily related to the impact of nondeductible expenses for executive compensation during the thirteen weeks ended September 28, 2024.

Thirty-Nine Weeks Ended September 28, 2024 compared to Thirty-Nine Weeks Ended September 30, 2023
The following table sets forth our results of operations for the thirty-nine weeks ended September 28, 2024 and September 30, 2023 (dollars in thousands):
Thirty-Nine Weeks EndedIncrease / (Decrease)
September 28,
2024		September 30,
2023		$%
Revenue:
Royalty revenue, franchise fees and other$212,652 $149,372 $63,280 42.4 %
Advertising fees161,567 114,010 47,557 41.7 %
Company-owned restaurant sales89,767 69,616 20,151 28.9 %
Total revenue463,986 332,998 130,988 39.3 %
Costs and expenses:
Cost of sales (1)
68,311 50,959 17,352 34.1 %
Advertising expenses172,705 120,753 51,952 43.0 %
Selling, general and administrative85,569 68,820 16,749 24.3 %
Depreciation and amortization13,625 9,591 4,034 42.1 %
Loss on disposal of assets— 95 (95)(100.0)%
Total costs and expenses340,210 250,218 89,992 36.0 %
Operating income123,776 82,780 40,996 49.5 %
Interest expense, net14,874 13,337 1,537 11.5 %
Other (income) expense(1,574)123 (1,697)(1,379.7)%
Income before income tax expense110,476 69,320 41,156 59.4 %
Income tax expense28,512 17,959 10,553 58.8 %
Net income$81,964 $51,361 $30,603 59.6 %
(1) Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, and excludes depreciation and amortization, which are presented separately.

Revenue
During the thirty-nine weeks ended September 28, 2024, total revenue was $464.0 million, an increase of $131.0 million, or 39.3%, compared to $333.0 million in the comparable period in 2023.

Royalty revenue, franchise fees and other increased $63.3 million, of which $31.1 million was due to domestic same store sales growth of 23.6%, and $20.2 million was due to net new franchise development. Other revenue increased by $5.0 million primarily due to an increase in vendor rebates.

Advertising fees increased $47.6 million due to a 40.4% increase in system-wide sales during the thirty-nine weeks ended September 28, 2024, and $6.3 million was due to an increase in the national advertising fund contribution rate to 5.3% from 5.0%, effective the first day of the fiscal second quarter 2024.

Company-owned restaurant sales increased $20.2 million, primarily due to an increase of $10.0 million related to the addition of ten net new company-owned restaurants since the prior year comparable period. The remainder of the increase was due to company-owned same store sales growth of 9.1%, which was driven primarily by an increase in transactions.
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Cost of sales
The table below presents the major components of cost of sales (dollars in thousands):
Thirty-Nine Weeks Ended
September 28, 2024September 30, 2023
In dollarsAs a % of company-owned restaurant salesIn dollarsAs a % of company-owned restaurant sales
Food, beverage and packaging costs$32,186 35.9 %$22,661 32.6 %
Labor costs21,017 23.4 %16,683 24.0 %
Other restaurant operating expenses17,438 19.4 %13,278 19.1 %
Vendor rebates(2,330)(2.6)%(1,663)(2.4)%
Total cost of sales$68,311 76.1 %$50,959 73.2 %
Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 35.9% in the thirty-nine weeks ended September 28, 2024, compared to 32.6% in the comparable period in 2023. The increase was primarily due to a 41.5% increase in the cost of bone-in chicken wings as compared to the prior year period. Our purchases in the prior fiscal year period were tied primarily to the spot market, which benefited from significant deflation in the cost of bone-in chicken wings.
Labor costs as a percentage of company-owned restaurant sales were 23.4% for the thirty-nine weeks ended September 28, 2024, compared to 24.0% in the comparable period in 2023. The decrease in company-owned restaurant wages as a percentage of sales was primarily due to leverage as a result of company-owned domestic same store sales growth of 9.1%.
Other restaurant operating expenses as a percentage of company-owned restaurant sales were 19.4% for the thirty-nine weeks ended September 28, 2024, comparable to 19.1% in the prior fiscal year period in 2023. The increase as a percentage of company-owned restaurant sales was primarily due to an increase in the national advertising fund contribution rate to 5.3% from 5.0%, effective the first day of the fiscal second quarter 2024, as well as an increase in pre-opening expenses as compared to the prior year period.
Advertising expenses
During the thirty-nine weeks ended September 28, 2024, advertising expenses were $172.7 million, an increase of $52.0 million compared to $120.8 million in the comparable period in 2023. Advertising expenses are recognized at the same time the related revenue is recognized, which does not necessarily correlate to the actual timing of the related advertising spend.
Selling, general and administrative (SG&A)
During the thirty-nine weeks ended September 28, 2024, SG&A expense was $85.6 million, an increase of $16.7 million compared to $68.8 million in the comparable period in 2023. The increase in SG&A expense was driven by an increase in performance-based stock compensation and incentive compensation expense of $7.3 million primarily related to the Company’s performance, an increase in headcount related expenses of $6.8 million to support the growth in our business, and an increase in consulting and other professional fees of $1.6 million associated with our strategic initiatives, including system implementation costs.
Depreciation and amortization
During the thirty-nine weeks ended September 28, 2024, depreciation and amortization was $13.6 million, an increase of $4.0 million compared to $9.6 million in the comparable period in 2023. The increase in depreciation and amortization was primarily due to depreciation expense for software assets placed in service related to our MyWingstop technology platform during the thirty-nine weeks ended September 28, 2024.
Interest expense, net
During the thirty-nine weeks ended September 28, 2024, interest expense, net was $14.9 million, an increase of $1.5 million compared to $13.3 million of interest expense, net in the comparable period in 2023. The increase was primarily driven by additional interest income earned on our cash balances during the thirty-nine weeks ended September 30, 2023.
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Income tax expense
During the thirty-nine weeks ended September 28, 2024, we recognized income tax expense of $28.5 million yielding an effective tax rate of 25.8%, which is comparable to an effective tax rate of 25.9% in the prior year period.
Liquidity and Capital Resources
General. Our primary sources of liquidity and capital resources are cash provided from operating activities, cash and cash equivalents on hand, and borrowings available under our securitized financing facility. Our primary requirements for liquidity and capital are working capital, general corporate needs, capital expenditures, income tax payments, debt service requirements, dividend payments, and the repurchase of shares of our common stock (if any). Historically, we have operated with minimal positive working capital or with negative working capital. We generally utilize available cash flows from operations to invest in our business, service our debt obligations, pay dividends, and repurchase shares of our common stock (if any).
Our primary sources of short-term and long-term liquidity are expected to be cash flows from operations and available borrowings under our 2022 Variable Funding Notes (as defined below). As of September 28, 2024, the Company had $84.0 million of cash and cash equivalents on its balance sheet.
Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with our securitized financing facility, including our 2022 Variable Funding Notes, will be sufficient to meet our capital expenditure, working capital and debt service requirements for at least the next twelve months and the foreseeable future.
The following table shows summary cash flows information for the thirty-nine weeks ended September 28, 2024 and September 30, 2023 (in thousands):
Thirty-Nine Weeks Ended
September 28,
2024		September 30,
2023
Net cash provided by (used in):
Operating activities$149,868 $83,747 
Investing activities(50,123)(33,499)
Financing activities(88,285)(149,017)
Net change in cash and cash equivalents$11,460 $(98,769)
Operating activities. Our cash flows from operating activities are principally driven by sales at both franchise restaurants and company-owned restaurants, as well as franchise and development fees. We collect franchise royalties from our franchise owners on a weekly basis. Restaurant-level operating costs at our company-owned restaurants, unearned franchise and development fees, and corporate overhead costs also impact our cash flow from operating activities.
Net cash provided by operating activities was $149.9 million in the thirty-nine weeks ended September 28, 2024, an increase of $66.1 million from net cash provided by operating activities of $83.7 million in the thirty-nine weeks ended September 30, 2023. The increase is primarily due to an increase in operating income, coupled with the change in working capital due to timing of payments associated with our national advertising campaign and taxes.
Investing activities. Our net cash used in investing activities was $50.1 million in the thirty-nine weeks ended September 28, 2024, an increase of $16.6 million from net cash used in investing activities of $33.5 million in the thirty-nine weeks ended September 30, 2023. The increase is primarily due to an increase in capital expenditures related to our technology investments, as well as the impact of additional restaurants acquired from franchisees as compared to the prior fiscal year period.
Financing activities. Our net cash used in financing activities was $88.3 million in the thirty-nine weeks ended September 28, 2024, a decrease of $60.7 million from net cash used in financing activities of $149.0 million in the thirty-nine weeks ended September 30, 2023. The decrease is primarily due to a decrease in common stock repurchased under our Share Repurchase Program as compared to the prior fiscal year period, in which we initiated a $125.0 million accelerated share repurchase program, as well as principal payments made in the thirty-nine weeks ended September 30, 2023.
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Securitized financing facility. On March 9, 2022, the Company completed a securitized financing transaction, pursuant to which Wingstop Funding LLC, a limited purpose, bankruptcy-remote, indirect wholly-owned subsidiary of the Company, issued $250 million of its Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the "2022 Class A-2 Notes"), and entered into a revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “2022 Variable Funding Notes,” and together with the 2022 Class A-2 Notes, the “2022 Notes”), which permits borrowings of up to a maximum principal amount of $200 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit. The proceeds from the securitized financing transaction were used to pay related transaction fees and expenses, strengthen the Company's liquidity position and for general corporate purposes, which included a return of capital to the Company’s stockholders. No borrowings were outstanding under the 2022 Variable Funding Notes as of September 28, 2024.
In addition to the 2022 Notes, the Company’s outstanding debt consists of its existing Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Class A-2 Notes”).
During the fiscal third quarter of 2024, the Company continued to have a leverage ratio under the 2020 Class A-2 Notes and the 2022 Class A-2 Notes of less than 5.0x. Per the terms of the Company’s debt agreements, principal payments can be suspended at the borrower’s election until the repayment date, as long as the Company maintains a leverage ratio of less than 5.0x. Accordingly, the Company elected to suspend payments following the principal payment made in the second quarter of 2023, and the entire outstanding balance of the 2020 Class A-2 Notes and the 2022 Class A-2 Notes has been classified as long-term debt due after fiscal year 2026.
Dividends. We paid a quarterly cash dividend of $0.22 per share of common stock in each of the first two quarters of 2024, and a quarterly dividend of $0.27 per share of common stock in the third quarter of 2024, resulting in aggregate declared dividends of $20.8 million, or $0.71 per share of common stock, during the thirty-nine weeks ended September 28, 2024. On October 29, 2024 the Company’s Board of Directors declared a dividend of $0.27 per share, to be paid on December 6, 2024 to stockholders of record as of November 15, 2024, totaling approximately $7.9 million.
We do not currently expect the restrictions in our debt instruments to impact our ability to make regular quarterly dividends pursuant to our quarterly dividend program. However, any future declarations of dividends, as well as the amount and timing of such dividends, are subject to capital availability and the discretion of our Board of Directors, which must evaluate, among other things, whether cash dividends are in the best interest of the Company and our stockholders.
Share Repurchase Program. On August 17, 2023, the Company announced a share repurchase program with authorization to purchase up to $250.0 million of its outstanding shares of common stock (the “Share Repurchase Program”). During the thirteen weeks ended September 28, 2024, the Company repurchased and retired 93,617 shares of its common stock at an average price of $373.68 per share. As of September 28, 2024, $61.1 million remained available under the Share Repurchase Program.
Critical Accounting Policies and Estimates
Our consolidated financial statements and accompanying notes are prepared in accordance with GAAP. Preparing consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by the application of our accounting policies. Critical accounting estimates are those that require application of management’s most difficult, subjective, or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. While we apply our judgment based on assumptions believed to be reasonable under the circumstances, actual results could vary from these assumptions. It is possible that materially different amounts would be reported using different assumptions. Our critical accounting policies and estimates are identified and described in our annual consolidated financial statements and the related notes included in our Annual Report, and there have been no material changes since the filing of our Annual Report.
Recent Accounting Pronouncements
Refer to Note 1, Basis of Presentation, of the notes to the consolidated financial statements.
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Special Note Regarding Forward-Looking Statements
This report includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to the discussion of our business strategies and our expectations concerning future operations, margins, profitability, trends, liquidity and capital resources and to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “may,” “will,” “should,” “expect,” “intend,” “plan,” “outlook,” “anticipate,” “believe,” “think,” “estimate,” “seek,” “predict,” “can,” “could,” “project,” “potential” or, in each case, their negative or other variations or comparable terminology, although not all forward-looking statements are accompanied by such terms. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties, risks, and factors relating to our operations and business environments, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by these forward-looking statements.
Such risks and other factors include those listed below and elsewhere in this report and our Annual Report, that could cause actual results or outcomes to differ from the results expressed or implied by forward-looking statements:    
•our ability to effectively implement our growth strategy;
•our relationships with, and the performance of, our existing and new franchises and franchisees, as well as actions by franchisees that could harm our business;
•our ability to identify, recruit and contract with a sufficient number of qualified franchisees;
•risks associated with food safety, food-borne illness and other health concerns;
•our ability to successfully expand into new and existing markets;
•our ability to effectively compete within our industry;
•risks associated with changes in food and supply costs;
•risks associated with interruptions in our supply chain, including availability of food products;
•risks associated with data privacy, cybersecurity and the use and implementation of information technology, including heightened risks that may arise upon increased adoption of artificial intelligence technologies;
•risks associated with our increasing dependence on digital commerce platforms and third-party delivery service providers;
•uncertainty in the law with respect to the assignment or allocation of liabilities in the franchise business model;
•risks associated with litigation against us or our franchisees;
•risks associated with the availability and cost of labor;
•our ability to successfully advertise and market our business;
•risks associated with changes in customer preferences, perceptions and eating habits;
•risks associated with our future performance and operating results falling below the expectations of securities analysts and investors;
•risks associated with the geographic concentration of our business;
•the impact on our business from unexpected events such as international conflict or war and related sanctions, acts of terrorism, civil unrest, epidemics and pandemics and severe weather;
•our ability to comply with laws and government regulations, including those relating to food products, employment and franchising, advertising and consumer protection, or increased costs associated with new or changing regulations;
•our ability to maintain adequate insurance coverage for our business;
•risks associated with damage to our reputation or lack of acceptance of our brand in existing or new markets;
•risks associated with our expansion into international markets and foreign government restrictions on operations;
•our ability to attract and retain our executive officers and other key employees;
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•our ability to protect our intellectual property, including trademarks, trade secrets and other proprietary rights;
•the impact on our business from environmental, social and corporate governance matters; and
•our ability to comply with the terms of our securitized debt financing and generate sufficient cash flows to satisfy our significant debt service obligations thereunder.
The above list of factors is not exhaustive. Some of these and other factors are discussed in more detail under “Risk Factors” in our Annual Report. When considering forward-looking statements in this report or that we make in other reports or statements, you should keep in mind the cautionary statements in this report and future reports we file with the SEC. Any forward-looking statements made in this report speak only as of the date of the report, unless specified otherwise. New risks and uncertainties arise from time to time, and we cannot predict when they may arise or how they may affect us. Except as required by law, we assume no obligation to update or revise any forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.
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Item 3.     Quantitative and Qualitative Disclosures About Market Risk
Commodity Price Risk. We are exposed to market risks from changes in commodity prices. Many of the food products purchased by us are affected by weather, production, availability and other factors outside of our control, including inflation as compared to the prior year period. Although we enter into arrangements in an effort to mitigate the price volatility of food costs, there are no established fixed price markets for fresh bone-in chicken wings, so we may be subject to prevailing market conditions. Bone-in chicken wings accounted for approximately 19.5% and 16.2% of our company-owned restaurant cost of sales during the thirty-nine weeks ended September 28, 2024 and September 30, 2023, respectively. A hypothetical 10% increase in the bone-in chicken wing costs would have increased costs of sales by approximately $1.3 million during the thirty-nine weeks ended September 28, 2024. We do not engage in speculative financial transactions nor do we hold or issue financial instruments for trading purposes.
Interest Rate Risk. Our long-term debt, including current portion, consisted entirely of the $720.9 million incurred under the 2020 Class A-2 Notes and the 2022 Class A-2 Notes as of September 28, 2024 (excluding unamortized debt issuance costs). The Company’s predominantly fixed-rate debt structure has reduced its exposure to interest rate increases that could adversely affect its earnings and cash flows, but the Company remains exposed to changes in market interest rates reflected in the fair value of the debt and to the risk that the Company may need to refinance maturing debt with new debt at a higher rate. The Company is exposed to interest rate increases under the 2022 Variable Funding Notes; however, the Company had no outstanding borrowings under its 2022 Variable Funding Notes as of September 28, 2024.
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Item 4.     Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 28, 2024, pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of September 28, 2024, our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II.     OTHER INFORMATION
Item 1.     Legal Proceedings
We are currently involved in various claims and legal actions that arise in the ordinary course of business, including claims and actions resulting from employment-related and franchise-related matters. None of these matters, some of which are covered by insurance, has had a material effect on us, and, as of the date of this report, we are not party to any pending legal proceedings that we believe would have a material adverse effect on our business, financial condition, results of operations or cash flows. However, a significant increase in the number of these claims or an increase in amounts owing under successful claims could materially and adversely affect our business, financial condition, results of operations or cash flows.
Item 1A. Risk Factors
A description of the risk factors associated with our business is contained in the “Risk Factors” section of our Annual Report.
Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
PeriodTotal Number of Shares PurchasedAverage Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
June 30, 2024 - July 27, 2024— $— — $96,070,713 
July 28, 2024 - August 24, 202454,440 367.26 54,440 76,074,208 
August 25, 2024 - September 28, 202439,177 382.61 39,177 61,082,928 
Total93,617 $373.68 93,617 $61,082,928 

(1) On August 17, 2023, the Company announced a share repurchase program with authorization to purchase up to $250.0 million of its outstanding shares of common stock (the “Share Repurchase Program”). The authorization for the repurchase continues until all such shares have been repurchased or the repurchase plan is terminated by action of our Board of Directors. As of September 28, 2024, $61.1 million remained available under the Share Repurchase Program.
Item 3.     Defaults Upon Senior Securities
None.
Item 4.     Mine Safety Disclosures
Not applicable.
Item 5.     Other Information
During the thirteen weeks ended September 28, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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Item 6.    Exhibits
Index to Exhibits
Exhibit No.Description
3.1
3.2
31.1*
31.2*
32.1**
32.2**
101 INS*Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101 SCH*Inline XBRL Taxonomy Extension Schema Document
101 CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document
101 DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document
101 LAB*Inline XBRL Taxonomy Extension Label Linkbase Document
101 PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*Cover Page Interactive Data File (formatted as Inline XBRL and Contained in Exhibit 101)
* Filed herewith.
** Furnished, not filed.


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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Wingstop Inc.
(Registrant)
Date:October 30, 2024By:/s/ Michael J. Skipworth
President and Chief Executive Officer
(Principal Executive Officer)
Date:October 30, 2024By:/s/ Alex R. Kaleida
Chief Financial Officer
(Principal Financial and Accounting Officer)

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