Mad Money

Wingstop CEO bets on advertising, digital and delivery in the wing chain's 'bright future'

Key Points
  • "We have a bright future ahead of us — a lot of runway for growth not only here in the U.S. but across the world," Wingstop CEO Charlie Morrison tells CNBC.
  • He tells "Mad Money" host Jim Cramer that advertising, online sales and delivery will help drive the company's growth next year.
  • The wing chain has renegotiated its contract with DoorDash for delivery services, and Morrison is "bullish" about the upside it can bring to 80% of its domestic restaurants.
Wingstop CEO on the chain's 'bright future'

Wingstop is counting on its advertising, digital and delivery strategies to help power through another year of same-store sales growth, CEO Charlie Morrison told CNBC on Wednesday.

The restaurant chain is approaching its 16th consecutive year of positive comp sales, he said. In its most recent quarter, Wingstop grew its advertising spending more than 50% to $12.7 million and expanded its online business to nearly 36% of domestic sales. Delivery is now offered at 80% of its U.S. restaurants.

"We have a bright future ahead of us — a lot of runway for growth not only here in the U.S. but across the world," Morrison said in an interview with "Mad Money" host Jim Cramer

Wingstop, the Dallas-based franchise operating in 1,300 locations in nine countries, reported a profit of 20 cents per share on nearly $50 million of revenue in its September quarter, beating analyst consensus on those measures. Wall Street expects the wing company to bring in about $198 million of revenue and produce 74 cents of earnings per share for full-year 2019, according to FactSet.

Management expects to almost double its presence in Mexico to 200 locations within the next decade. A new location recently opened in London and another is planned for France by the end of the year.

"We have a long way to go," Morrison explained.

Wingstop partnered with DoorDash to roll out delivery at its home-grown restaurants. Wingstop recently renegotiated a contract with the third-party delivery app and plans to advertise delivery options in the coming year.

Morrison said he is "bullish" about the upside that the delivery platform can bring to the chain. The relationship allowed Wingstop to pay a small commission that offset investments in labor that would have been required to develop its own delivery program. In addition, the privately held DoorDash charges delivery fees and accepts tips for its services, he said.

"If you combine the three of those together, DoorDash can make money off a brand especially like Wingstop," Morrison said. "We have a higher average check [and] a lot of takeout business already. Delivery is a perfect fit, and I think, if you maximize that equation, everybody's going to win."

Shares of Wingstop climbed 1.52% in Wednesday's session. The stock has run more than 32% year to date, outgaining the S&P 500's more than 23% return.

Wingstop's 'bright future' hinges on advertising, digital and delivery, CEO says

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