Wingstop Inc. 10-Q

Item 1. Financial Statements WINGSTOP INC. AND SUBSIDIARIES Consolidated Balance Sheets (amounts in thousands, except share and par value amounts) June 27, 2026 December 27, 2025 (Unaudited) Assets Current assets Cash and cash equivalents $ 127,455 $ 196,572 Restricted cash 25,994 25,994 Accounts receivable, net 25,108 20,823 Prepaid expenses and other current assets 10,130 7,956 Advertising fund assets, restricted 19,630 16,143 Total current assets 208,317 267,488 Property and equipment, net 153,075 130,581 Operating lease assets 49,380 48,637 Goodwill 83,875 83,875 Trademarks 32,700 32,700 Investments 90,693 87,164 Other non-current assets, net 39,951 42,964 Total assets $ 657,991 $ 693,409 Liabilities and stockholders' deficit Current liabilities Accounts payable $ 10,267 $ 12,846 Current portion of operating lease liabilities 3,713 3,232 Other current liabilities 36,596 49,744 Advertising fund liabilities 19,630 16,143 Total current liabilities 70,206 81,965 Long-term debt, net 1,210,589 1,209,094 Operating lease liabilities 58,173 58,080 Deferred revenues, net of current 51,471 47,721 Deferred income tax liabilities, net 40,345 33,142 Other non-current liabilities 194 169 Total liabilities 1,430,978 1,430,171 Commitments and contingencies (see Note 7) Stockholders' deficit Common stock, $ 0.01 par value; 100,000,000 shares authorized; 27,240,351 and 27,540,619 shares issued and outstanding as of June 27, 2026 and December 27, 2025, respectively 272 275 Additional paid-in-capital 2,409 1,529 Retained deficit ( 779,246 ) ( 744,915 ) Accumulated other comprehensive income (loss) 3,578 6,349 Total stockholders' deficit ( 772,987 ) ( 736,762 ) Total liabilities and stockholders' deficit $ 657,991 $ 693,409 See accompanying notes to consolidated financial statements. 4 WINGSTOP INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (amounts in thousands, except per share data) (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Revenue: Royalty revenue, franchise fees and other $ 86,844 $ 79,889 $ 174,314 $ 158,664 Advertising fees 64,536 61,962 127,805 124,234 Company-owned restaurant sales 34,184 32,478 67,170 62,525 Total revenue 185,564 174,329 369,289 345,423 Costs and expenses: Cost of sales (1) 25,068 24,405 49,784 47,240 Advertising expenses 68,417 65,533 135,728 131,328 Selling, general and administrative 30,236 32,937 64,685 64,377 Depreciation and amortization 7,212 6,220 14,053 12,448 Loss on disposal of assets — — — 6,535 Total costs and expenses 130,933 129,095 264,250 261,928 Operating income 54,631 45,234 105,039 83,495 Interest expense, net 9,813 8,469 19,577 17,379 Investment (income) expense 167 — 239 ( 93,839 ) Income before income tax expense 44,651 36,765 85,223 159,955 Income tax expense 13,363 10,002 24,052 40,927 Net income $ 31,288 $ 26,763 $ 61,171 $ 119,028 Earnings per share Basic $ 1.15 $ 0.96 $ 2.24 $ 4.23 Diluted $ 1.15 $ 0.96 $ 2.23 $ 4.21 Other comprehensive income (loss) Currency translation adjustment $ ( 1,050 ) $ 4,731 $ ( 2,771 ) $ 7,990 Other comprehensive income (loss) ( 1,050 ) 4,731 ( 2,771 ) 7,990 Comprehensive income $ 30,238 $ 31,494 $ 58,400 $ 127,018 (1) Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, and excludes depreciation and amortization, which are presented separately. See accompanying notes to consolidated financial statements. 5 WINGSTOP INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Deficit For the Twenty-Six Weeks Ended June 27, 2026 (amounts in thousands, except share data) (Unaudited) Common Stock Shares Amount Additional Paid-In Capital Retained Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Deficit Balance at December 27, 2025 27,540,619 $ 275 $ 1,529 $ ( 744,915 ) $ 6,349 $ ( 736,762 ) Net income — — — 29,883 — 29,883 Shares issued under stock plans 101,952 1 ( 1 ) — — — Purchases of common stock ( 374,324 ) ( 4 ) ( 6,034 ) ( 72,480 ) — ( 78,518 ) Tax payments for restricted stock upon vesting ( 35,768 ) — — ( 8,460 ) — ( 8,460 ) Stock-based compensation expense, net of forfeitures — — 4,823 — — 4,823 Dividends declared on common stock and equivalents — — ( 104 ) ( 8,313 ) — ( 8,417 ) Currency translation adjustment — — — — ( 1,721 ) ( 1,721 ) Balance at March 28, 2026 27,232,479 272 213 ( 804,285 ) 4,628 ( 799,172 ) Net income — — — 31,288 — 31,288 Shares issued under stock plans 8,628 — 354 — — 354 Tax payments for restricted stock upon vesting ( 756 ) — — ( 84 ) — ( 84 ) Stock-based compensation expense, net of forfeitures — — 3,893 — — 3,893 Dividends declared on common stock and equivalents — — ( 2,051 ) ( 6,165 ) — ( 8,216 ) Currency translation adjustment — — — — ( 1,050 ) ( 1,050 ) Balance at June 27, 2026 27,240,351 272 2,409 ( 779,246 ) 3,578 ( 772,987 ) 6 WINGSTOP INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Deficit For the Twenty-Six Weeks Ended June 28, 2025 (amounts in thousands, except share data) (Unaudited) Common Stock Shares Amount Additional Paid-In Capital Retained Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Deficit Balance at December 28, 2024 28,662,614 $ 287 $ 1,568 $ ( 676,940 ) $ ( 501 ) $ ( 675,586 ) Net income — — — 92,265 92,265 Shares issued under stock plans 109,964 1 ( 1 ) — — — Purchases of common stock ( 830,012 ) ( 8 ) ( 5,179 ) ( 115,582 ) — ( 120,769 ) Tax payments for restricted stock upon vesting ( 39,678 ) ( 1 ) — ( 11,596 ) — ( 11,597 ) Stock-based compensation expense, net of forfeitures — — 5,312 — — 5,312 Dividends declared on common stock and equivalents — — ( 409 ) ( 7,457 ) — ( 7,866 ) Currency translation adjustment — — — — 3,259 3,259 Balance at March 29, 2025 27,902,888 279 1,291 ( 719,310 ) 2,758 ( 714,982 ) Net income — — — 26,763 — 26,763 Shares issued under stock plans 28,298 — 855 — — 855 Tax payments for restricted stock upon vesting ( 7,433 ) — — ( 2,002 ) — ( 2,002 ) Stock-based compensation expense, net of forfeitures — — 6,217 — — 6,217 Dividends declared on common stock and equivalents — — ( 4,572 ) ( 3,008 ) — ( 7,580 ) Currency translation adjustment — — — — 4,731 4,731 Balance at June 28, 2025 27,923,753 $ 279 $ 3,791 $ ( 697,557 ) $ 7,489 $ ( 685,998 ) See accompanying notes to consolidated financial statements. 7 WINGSTOP INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (amounts in thousands) (Unaudited) Twenty-Six Weeks Ended June 27, 2026 June 28, 2025 Operating activities Net income $ 61,171 $ 119,028 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 14,053 12,448 Deferred income taxes 7,203 12,690 Stock-based compensation expense 8,716 11,529 Non cash investment income ( 5,268 ) ( 3,886 ) Loss on disposal of assets 32 6,535 Gain on sale of investment — ( 92,485 ) Amortization of debt issuance costs 1,614 1,548 Changes in operating assets and liabilities: Accounts receivable ( 4,285 ) ( 8,729 ) Prepaid expenses and other assets ( 3,065 ) ( 13,262 ) Advertising fund assets and liabilities, net ( 1,894 ) ( 17,519 ) Accounts payable and other current liabilities ( 13,425 ) ( 716 ) Deferred revenue 4,099 4,034 Other non-current liabilities ( 650 ) 661 Cash provided by operating activities 68,301 31,876 Investing activities Purchases of property and equipment ( 35,936 ) ( 22,381 ) Acquisition of restaurants from franchisee — ( 9,221 ) Proceeds from sales of assets — 17,330 Payments for investments — ( 76,513 ) Proceeds from sale of investments — 107,700 Cash (used in) provided by investing activities ( 35,936 ) 16,915 Financing activities Proceeds from exercise of stock options 354 855 Purchases of common stock ( 78,518 ) ( 120,772 ) Tax payments for restricted stock upon vesting ( 8,544 ) ( 13,599 ) Dividends paid ( 16,670 ) ( 15,636 ) Cash used in financing activities ( 103,378 ) ( 149,152 ) Net change in cash, cash equivalents, and restricted cash ( 71,013 ) ( 100,361 ) Cash, cash equivalents, and restricted cash at beginning of period 228,453 359,574 Cash, cash equivalents, and restricted cash at end of period $ 157,440 $ 259,213 Supplemental information: Accrued capital expenditures $ 4,462 $ 655 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 June 27, 2026, the Company had a total of 3,255 restaurants system-wide. The Company’s restaurant base is approximately 98 % franchised, with 3,198 franchised locations (including 527 restaurants in international locations and U.S. territories) and 57 company-owned restaurants as of June 27, 2026. 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 June 27, 2026 and December 27, 2025, and operating results are for the thirteen and twenty-six weeks ended June 27, 2026 and June 28, 2025. Certain reclassifications have been made to the financial statements and accompanying footnotes to conform to the Company’s current period 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 27, 2025 (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 2026 and 2025 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 June 27, 2026 and December 27, 2025 were as follows (in thousands): June 27, 2026 December 27, 2025 Cash and cash equivalents $ 127,455 $ 196,572 Restricted cash 25,994 25,994 Restricted cash, included in Advertising fund assets, restricted 3,991 5,887 Total cash, cash equivalents, and restricted cash $ 157,440 $ 228,453 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 that were previously 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 Ended Twenty-Six Weeks Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Basic weighted average shares outstanding 27,235 27,912 27,358 28,149 Dilutive shares 17 85 67 106 Diluted weighted average shares outstanding 27,252 27,997 27,425 28,255 For the thirteen weeks ended June 27, 2026 and June 28, 2025, equity awards representing approximately 192,000 and 15,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive. For the twenty-six weeks ended June 27, 2026 and June 28, 2025, equity awards representing approximately 141,000 and 4,000 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 $ 0.30 per share of common stock in the second quarter of 2026. Subsequent to the second quarter, on July 28, 2026, our Board of Directors declared a regular quarterly dividend of $ 0.33 per share of common stock for stockholders of record as of August 15, 2026. The regular quarterly dividend is to be paid on September 5, 2026, totaling approximately $ 9.0 million. Share Repurchase Program The following table summarizes shares repurchased and retired, and the average price per share, during the periods presented: June 27, 2026 December 27, 2025 # of shares Weighted average price per share # of shares Weighted average price per share 2023 & 2024 ASR Agreements — $ — 317,202 $ 292.28 Share repurchases 374,324 208.08 901,191 243.81 Total share repurchases 374,324 $ 208.08 1,218,393 $ 256.43 On March 5, 2026, the Company’s Board of Directors authorized the purchase of up to an additional $ 300.0 million of the Company’s common stock under the share repurchase program. On December 9, 2024, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with a third-party financial institution to repurchase $ 250.0 million of the Company’s common stock under its Share Repurchase Program. Pursuant to the terms of the ASR Agreement, the Company paid the financial institution $ 250.0 million and, on December 9, 2024, the Company received and retired 551,325 shares of its common stock. The final settlement under the ASR Agreement occurred on February 20, 2025, and the Company received and retired an additional 317,202 shares of common stock. In connection with the ASR Agreement, the Company received and retired a total of 868,527 shares of common stock at an average price of $ 287.84 per share. The total number of shares repurchased under the ASR Agreement was based on a daily volume-weighted average share price during the valuation period specified in the ASR Agreement, less a discount and subject to adjustments. During the twenty-six weeks ended June 27, 2026, the Company repurchased and retired 374,324 shares of its common stock at an average price of $ 208.08 per share. As of June 27, 2026, $ 313.4 million remained available under the Share Repurchase Program. 10 WINGSTOP INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (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. The carrying values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short-term nature. Certain assets are measured at fair value on a non-recurring basis using Level 3 inputs. The fair value of the Company’s preference share investment in the Company’s United Kingdom master franchisee, Lemon Pepper Holdings Ltd. (“LPH”), which is accounted for as a held-to-maturity debt security, was estimated using a discounted cash flow model that incorporates unobservable inputs, including expected cash flows, discount rates, and an assumed maturity term of approximately five years. Based on this valuation approach, the estimated fair value of the preference share investment was determined at $ 96.9 million. The carrying value of the investment as of June 27, 2026 was $ 89.0 million, net of an allowance for credit losses of $ 5.0 million. The carrying value and estimated fair value of debt and the investment in debt securities are summarized as follows (in thousands): Fair Value Hierarchy June 27, 2026 December 27, 2025 Carrying Value Fair Value Carrying Value Fair Value Securitized Financing Facility: 2020-1 Class A-2 Senior Secured Notes (1) Level 2 $ 472,800 $ 458,616 $ 472,800 $ 456,961 2022-1 Class A-2 Senior Secured Notes (1) Level 2 $ 248,125 $ 238,510 $ 248,125 $ 240,061 2024-1 Class A-2 Senior Secured Notes (1) Level 2 $ 500,000 $ 505,625 $ 500,000 $ 514,500 Investment in preference shares of LPH (2) Level 3 $ 88,958 $ 96,920 $ 85,597 $ 87,482 (1) The fair values of the 2020-1, 2022-1, and 2024-1 Class A-2 Senior Secured Notes were 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 preference shares are accounted for as held-to-maturity debt securities at amortized cost. Refer to Note 9 for additional information regarding the Company’s investments. The fair value of the assets and liabilities of the Company that are required to be measured at fair value on a recurring basis were not significant at June 27, 2026 or December 27, 2025. 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 $ 13.4 million and 29.9 %, respectively, for the thirteen weeks ended June 27, 2026, and $ 10.0 million and 27.2 %, respectively, for the thirteen weeks ended June 28, 2025. Income tax expense and the effective tax rate were $ 24.1 million and 28.2 %, respectively, for the twenty-six weeks ended June 27, 2026, and $ 40.9 million and 25.6 %, respectively, for the twenty-six weeks ended June 28, 2025. T he increase in the effective tax rate was primarily due to an increase in state income taxes and other non-deductible items. The decrease in total tax expense for the twenty-six weeks ended June 27, 2026 is primarily related to the taxable gain on the sale of our non-controlling interest in LPH during the first fiscal quarter of 2025. 11 WINGSTOP INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (6) Debt Obligations Long-term debt consisted of the following components (in thousands): June 27, 2026 December 27, 2025 2020-1 Class A-2 Senior Secured Notes $ 472,800 $ 472,800 2022-1 Class A-2 Senior Secured Notes 248,125 248,125 2024-1 Class A-2 Senior Secured Notes 500,000 500,000 Debt issuance costs, net of amortization ( 10,336 ) ( 11,831 ) Total debt 1,210,589 1,209,094 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”), (iii) Series 2024-1 5.858 % Fixed Rate Senior Secured Notes, Class A-2 (the “2024 Class A-2 Notes”), and (iv) a revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes”), which permits borrowings of up to a maximum principal amount of $ 300 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit. No borrowings were outstanding under the Variable Funding Notes as of June 27, 2026 and December 27, 2025. As of June 27, 2026, the Company’s leverage ratio under the 2020 Class A-2 Notes, the 2022 Class A-2 Notes, and the 2024 Class A-2 Notes was less than 5.0 x. 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 5.0 x. Accordingly, the Company elected to suspend payments, and the entire outstanding balance of $ 1.2 billion of the 2020 Class A-2 Notes, the 2022 Class A-2 Notes, and the 2024 Class A-2 Notes has been classified as long-term debt as the repayment date is more than one year from June 27, 2026. The 2020 Class A-2 Notes, 2022 Class A-2 Notes, and 2024 Class A-2 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) Stock-Based Compensation During the twenty-six weeks ended June 27, 2026, the Company granted 51,709 restricted stock units (“RSUs”) to certain employees. The RSUs granted generally vest ratably over a three-year period subsequent to the grant date and had a weighted-average grant-date fair value of $ 210.89 per unit. In addition, the Company granted 40,012 performance stock units (“PSUs”) to certain employees during the twenty-six weeks ended June 27, 2026. Of the total PSUs granted, 27,358 PSUs are subject to a service condition and a performance vesting condition based on return on incremental invested capital (“ROIIC PSUs”). The ROIIC 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 ROIIC PSUs is 250 % based on the level of performance achieved for the awards. An additional 4,311 PSUs granted are subject to a service condition and a performance vesting condition based on the number of net new restaurants opened over the 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. 12 WINGSTOP INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) The remaining 8,343 PSUs granted are subject to a service condition and performance vesting conditions based on the Company’s net new unit growth and Adjusted EBITDA growth, and include a same-store sales growth modifier, over a three-year performance period (“Growth PSUs”). The Growth 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 Growth PSUs is 200 % based on the level of performance achieved for the awards. The PSUs had a weighted-average grant-date fair value of $ 214.83 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 $ 8.7 million and $ 11.5 million for the twenty-six weeks ended June 27, 2026 and June 28, 2025, respectively, and was included in Selling, general and administrative (“SG&A”) expense in the Consolidated Statements of Comprehensive Income. (9) Investments In the first fiscal quarter of 2025, LPH, which was an unconsolidated equity method investment of the Company, completed a transaction to sell all its outstanding equity to a third party. The Company received proceeds of $ 107.7 million and recognized a gain of $ 97.2 million in Investment (income) expense on the Consolidated Statements of Comprehensive Income. In connection with the transaction, the Company reinvested $ 75.4 million in a newly formed entity, consisting primarily of preference shares and an approximately 18.75 % non-controlling equity interest. Substantially all of the reinvestment consists of preference shares, which are accounted for as held-to-maturity debt securities at amortized cost, with interest income recognized using the effective interest method. These securities are evaluated for credit losses on a quarterly basis under the current expected credit loss (“CECL”) methodology. The Company recorded a provision for credit losses of $ 4.7 million in Investment (income) expense on the Consolidated Statements of Comprehensive Income during the first fiscal quarter of 2025. The Company’s 18.75 % ownership interest in ordinary shares is accounted for using the equity method, and the Company’s share of investee income will be recorded in Investment (income) expense on 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 twenty-six weeks ended June 27, 2026 and June 28, 2025 (in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Royalty revenue $ 78,571 $ 72,905 $ 155,372 $ 144,853 Franchise fees and other 8,273 6,984 18,942 13,811 Royalty revenue, franchise fees and other 86,844 79,889 174,314 158,664 Advertising fees and related income 64,536 61,962 127,805 124,234 Company-owned restaurant sales 34,184 32,478 67,170 62,525 Total revenue 185,564 174,329 369,289 345,423 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 and other fees revenue recognized in the thirteen and twenty-six weeks ended June 27, 2026 was included in the deferred revenue balance as of December 27, 2025. Approximately $ 13.9 million and $ 13.6 million of deferred revenue as of June 27, 2026 and December 27, 2025, 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 7.5 years. The Company did not have any material contract assets as of June 27, 2026. 13 WINGSTOP INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) On May 27, 2026, the Company launched Club Wingstop, its first customer loyalty program. The program allows customers to earn loyalty points redeemable for future purchases of the Company’s products. The loyalty points represent a material right and therefore a separate performance obligation. When an enrolled customer purchases Wingstop products, a portion of the transaction price is deferred as a contract liability until points are redeemed or expire. Points expire twelve months after issuance. The contract liability recorded for the loyalty program is immaterial to the Company’s financial statements for the thirteen weeks ended June 27, 2026. (11) Segment Information The Company has one reportable segment, and the measure of restaurant segment assets is reported as Total assets on the Consolidated Balance Sheets. Financial information for the Company’s reportable segment is as follows (in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Revenue: Royalty revenue, franchise fees and other $ 86,844 $ 79,889 $ 174,314 $ 158,664 Advertising fees 64,536 61,962 127,805 124,234 Company-owned restaurant sales 34,184 32,478 67,170 62,525 Total revenue 185,564 174,329 369,289 345,423 Cost of sales: Food, beverage and packaging costs 12,040 11,937 23,835 23,178 Labor 7,763 7,441 15,652 14,594 Other operating costs 6,180 5,821 12,049 11,012 Vendor rebates ( 915 ) ( 794 ) ( 1,752 ) ( 1,544 ) Total cost of sales 25,068 24,405 49,784 47,240 Advertising expenses 68,417 65,533 135,728 131,328 Selling, general & administrative: Transaction costs — — — 497 System implementation costs 514 1,534 1,060 2,846 Amortization of capitalized system implementation costs 467 — 934 — Restructuring charges 77 — 2,467 — Stock-based compensation expense 3,893 6,217 8,716 11,529 Other segment expense (1) 25,285 25,186 51,508 49,505 Total selling, general and administrative 30,236 32,937 64,685 64,377 Depreciation and amortization 7,212 6,220 14,053 12,448 Loss on disposal of assets — — — 6,535 Interest expense, net 9,813 8,469 19,577 17,379 Investment (income) expense 167 — 239 ( 93,839 ) Income tax expense 13,363 10,002 24,052 40,927 Net income $ 31,288 $ 26,763 $ 61,171 $ 119,028 (1) Other segment expense consists primarily of corporate related items such as headcount-related expenses, office rent expense, and other overhead costs. 14 WINGSTOP INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) (12) Subsequent Event Subsequent to the end of the fiscal second quarter 2026, the Company entered into 2 agreements to purchase 13 restaurants for an aggregate price of $ 32 million, anticipated to be funded by cash on hand. The first transaction closed on July 27, 2026, and the second transaction is expected to close during the fiscal third quarter 2026. 15