Chicken wing costs will stabilize in the second half of the year, offsetting the effects of inflation seen in 2021, Alex Kaleida, the CFO of Wingstop shared with investors during an earnings call.
“We believe the worst is behind us,” he said.
Bone-in chicken wing prices increased 40% in 2021 compared to the year before, of which approximately half was passed on to customers. Wingstop estimates that this will level out to one to two percent in the coming year.
In 2021, a combination of supply chain issues, labor shortages and greater consumer demand resulted in increased meat prices.
Thighstop rated a success
To help offset rising chicken wing costs, Wingstop introduced Thighstop in June 2021. The virtual brand specializes in chicken thighs, allowing the chain to find cost-savings by purchasing the whole bird.
“I think it’s done what we hoped, which is how to understand how to use more parts of the bird,” Wingstop CEO Charlie Morrison said on the earnings call.
“Overall, we’re going to continue to look at other ways to use the bird and expand the whole bird concept that we’ve talked about, which should ladder up to our supply chain strategies and how we can control more of the supply.”
Other reported sales growth
Same-store sales grew by 7.5% in the fourth company of 2021, down from 18.2% during the same time period in 2020, the company reported. Overall, domestic same-store sales increased by 25.7% over the two-year period.
“In March 2020 our world changed dramatically,” said Morrison.
“No one prepares for a pandemic, but Wingstop was ready. … We settled into a year of record growth for the brand. Many thought it would be hard for Wingstop to eclipse that year of record growth for the brand. As we sit here today, we are happy to say we lapped that number.”
