Coming off another record-breaking quarter, Wingstop announced November 13 its intent to issue $500 million in securitized notes.
Wingstop’s third quarter same-store sales are up nearly 21 percent.
The nearly 2,500-unit chicken wing powerhouse’s securitized financing transaction will include a new series of securitized debt, on top of its Series 2022-1 and Series 2020-1 fixed rate notes. Securitization is a process in which a company combines its debts into a single security as tradeable shares to be sold to investors.
Net proceeds from the notes will be used to pay transaction fees, corporate matters and “strengthen the company’s liquidity position,” according to a news release on the matter. That could include buying back shares of Wingstop stock.
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In addition to the new notes, Wingstop announced plans to increase its existing funding note facility of $200 million to $300 million.
The deal is expected to close this quarter.
Q3 sales up again
Wingstop’s domestic same-store sales are up nearly 21 percent in its third quarter and average unit volume continues to rise as it tops $2.1 million in its third quarter.
“Our third quarter results demonstrated the staying power of our multi-year strategies we are executing,” CEO and President Michael Skipworth said on the call.
Systemwide sales are up more than 39 percent to $1.2 billion, according to the franchise’s third quarter earnings call October 30. Wingstop’s AUV hit $2 million for the first time in Q2 this year.
Digital sales made up 69 percent of system sales. The company opened 106 net stores last quarter, a 17.1 percent increase in unit count, for a total of 2,458 stores globally with 2,120 in the United States.
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The chicken wing brand has its sights set on continued growth.
By the end of this year, Wingstop anticipates year-over-year same-store sales rising by 20 percent. It’ll end 2024 with 320 to 330 new units worldwide, up from the earlier expectation of 285 to 300.
Cost of sales was up significantly compared to Q3 in 2023, from $17.6 million last year to $24.4 million, due to food, packaging and drink cost increases. Bone-in chicken wings costs are up compared to last year, too.
Wingstop repurchased and retired more than 93,600 common stock shares in the third quarter, bringing the total number of shares repurchased to 815,431—with an average share price of $276.43—since it started repurchasing in August 2023.