Wingstop Inc. (NASDAQ:WING) Q4 2017 Earnings Conference Call - Final Transcript
Feb 22, 2018 • 05:00 pm ET
Good afternoon ladies and gentlemen and thank you for standing by. Welcome to the Wingstop Inc., Fiscal Fourth Quarter and Fiscal Year 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.
Please note that this conference is being recorded today, Thursday, February 22, 2018. On the call, we have Charlie Morrison, Chairman and CEO; and Michael Skipworth, CFO.
I would now like to turn the conference over to Michael. Please go ahead.
Thank you and welcome. Everyone should have access to our fiscal fourth quarter and fiscal year 2017 earnings release. A copy is posted under the IR tab on our website at wingstop.com.
(Forward-Looking Cautionary Statements)
We will also discuss certain non-GAAP financial measures that we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations to comparable GAAP measures are contained in our earnings release.
With that, I would like to turn the call over to Charlie.
Thank you Michael and good afternoon everyone. We appreciate your interest in Wingstop and for joining us today on today's call.
We overcame with some of the greatest challenges that our brand has faced in its 23-year history in 2017. We began 2017 with negative consumer sentiment coming out of the 2016 Presidential election. Our core consumers were acutely affected and that resulted in negative same-store sales in the first quarter of 2017. Then, we experienced record high wing inflation which at its peak impacted our franchises and company owned restaurants food costs by 680 basis points. Most brands cannot overcome such challenges in any single year, but in our case though these challenges tested the strength and resilience of Wingstop business model, we recorded another record year.
The key metrics tell the story. We achieved a 13.5% unit growth rate ending 2017 with 1,133 Wingstop restaurants worldwide. We've recorded our 14th year of positive same-store sales growth. We achieved a $1 billion milestone in system wide sales, ending 2017 with $1.1 billion in system-wide sales. And we also initiated a regular dividend just to name a few. 2017 was really strong confirmation that Wingstop has the right business model.
As I mentioned we started 2017 with negative trend in domestic same-store sales, but we also launched national advertising last February and we were able to grow system-wide sales by 14%. We saw our national advertising campaign drive brand awareness throughout 2017, where domestic same-store sales growth accelerated throughout the year with 5.2% increase in the fourth quarter, resulting in same-store sales growth of 2.6% for the full year. And despite headwinds to our P&L with high wing inflation in our company-owned restaurants, we were still able to increase adjusted EBITDA and adjusted EPS in 2017 by 18.3% and 27.6% respectively over the prior year.
And finally in 2017, as a result of our strong