What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-04-30 compared with 2024-10-30 · 117 added, 142 removed, 216 unchanged (55% of the section changed)

4 unchanged sentences

(amounts in thousands, except share and par value amounts)

September 28,

2025 December 28,

10 unchanged sentences

Trademarks 32,700 32,700

Customer relationships, net 6,792 7,740

Investments 76,116 8,511

Other non-current assets 33,581 29,700

17 unchanged sentences

100,000,000 shares authorized;

29,212,082 and 29,337,920 shares issued and outstanding as of September 28, 2024 and December 30, 2023, respectively

27,902,888 and 28,662,614 shares issued and outstanding as of March 29, 2025 and December 28, 2024, respectively

Additional paid-in-capital 1,291 1,568

8 unchanged sentences

(amounts in thousands, except per share data)

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Thirteen Weeks Ended

2025 March 30,

Royalty revenue, franchise fees and other $ 78,775 $ 67,097

12 unchanged sentences

Interest expense, net 8,910 4,544

Other (income) expense ( 800 ) ( 19 ) ( 1,574 ) 123

Investment income, net ( 93,839 ) ( 303 )

Income before income tax expense 123,190 38,497

4 unchanged sentences

Diluted $ 3.24 $ 0.98

Weighted average shares outstanding

Basic 29,265 29,750 29,319 29,889

Diluted 29,383 29,818 29,441 29,969

Dividends per share $ 0.27 $ 0.22 $ 0.71 $ 0.60

Other comprehensive income (loss)

7 unchanged sentences

Consolidated Statements of Stockholders' Deficit

For the Thirty-Nine Weeks Ended September 30, 2023

For the Thirteen Weeks Ended March 30, 2024 and March 29, 2025

(amounts in thousands, except share data)

9 unchanged sentences

Currency translation adjustment — — — — ( 24 ) ( 24 )

Balance at April 1, 2023 29,968,872 300 809 ( 380,409 ) ( 490 ) ( 379,790 )

Net income — — — 16,181 — 16,181

Shares issued under stock plans 9,084 — 362 — — 362

Tax payments for restricted stock upon vesting ( 342 ) — — ( 69 ) — ( 69 )

Stock-based compensation expense, net of forfeitures — — 3,546 — — 3,546

Dividends declared on common stock and equivalents — — ( 2,679 ) ( 3,030 ) — ( 5,709 )

Currency translation adjustment — — — — 128 128

Balance at July 1, 2023 29,977,614 $ 300 $ 2,038 $ ( 367,327 ) $ ( 362 ) $ ( 365,351 )

Net income — — — 19,511 — 19,511

Shares issued under stock plans 4,857 — 270 — — 270

Purchases of common stock ( 567,151 ) ( 6 ) ( 241 ) ( 125,878 ) — ( 126,125 )

Tax payments for restricted stock upon vesting ( 400 ) — — ( 66 ) — ( 66 )

Stock-based compensation expense, net of forfeitures — — 3,128 — — 3,128

Dividends declared on common stock and equivalents — — ( 3,957 ) ( 2,653 ) — ( 6,610 )

Currency translation adjustment — $ — $ — $ — $ ( 199 ) $ ( 199 )

Balance at September 30, 2023 29,414,920 $ 294 $ 1,238 $ ( 476,413 ) $ ( 561 ) $ ( 475,442 )

See accompanying notes to consolidated financial statements.

WINGSTOP INC.

AND SUBSIDIARIES

Consolidated Statements of Stockholders' Deficit

For the Thirty-Nine Weeks Ended September 28, 2024

(amounts in thousands, except share data)

Balance at March 30, 2024 29,369,978 $ 294 $ 918 $ ( 435,226 ) $ ( 365 ) $ ( 434,379 )

Shares Amount Additional

3 unchanged sentences

Shares issued under stock plans 109,964 1 ( 1 ) — — —

Tax payments for restricted stock upon vesting ( 10,860 ) — — ( 3,717 ) — ( 3,717 )

Stock-based compensation expense, net of forfeitures — — 3,812 — — 3,812

Dividends declared on common stock and equivalents — — ( 6,277 ) ( 262 ) — ( 6,539 )

Currency translation adjustment — — — — ( 24 ) ( 24 )

Balance at March 30, 2024 29,369,978 294 918 ( 435,226 ) ( 365 ) ( 434,379 )

Net income — — — 27,485 — 27,485

Shares issued under stock plans 11,323 — 546 — — 546

Purchases of common stock ( 830,012 ) ( 8 ) ( 5,179 ) ( 115,582 ) — ( 120,769 )

3 unchanged sentences

Currency translation adjustment — — — — 3,259 3,259

Balance at June 29, 2024 29,304,401 $ 293 $ 1,869 $ ( 439,326 ) $ ( 377 ) $ ( 437,541 )

Net income — — — 25,732 — 25,732

Shares issued under stock plans 1,850 — — — — —

Purchases of common stock ( 93,617 ) ( 1 ) ( 7,307 ) ( 27,887 ) — ( 35,195 )

Tax payments for restricted stock upon vesting ( 552 ) — — ( 230 ) — ( 230 )

Stock-based compensation expense, net of forfeitures — — 7,273 — — 7,273

Dividends declared on common stock and equivalents — — ( 320 ) ( 7,625 ) — ( 7,945 )

Currency translation adjustment — — — — 440 440

Balance at September 28, 2024 29,212,082 $ 292 $ 1,515 $ ( 449,336 ) $ 63 $ ( 447,466 )

Balance at March 29, 2025 27,902,888 $ 279 $ 1,291 $ ( 719,310 ) $ 2,758 $ ( 714,982 )

See accompanying notes to consolidated financial statements.

3 unchanged sentences

(amounts in thousands)

Thirty-Nine Weeks Ended

September 28,

2024 September 30,

Thirteen Weeks Ended

2025 March 30,

Operating activities

5 unchanged sentences

Loss on disposal of assets 6,535 —

Gain on sale of investment ( 92,485 ) —

Amortization of debt issuance costs 769 516

9 unchanged sentences

Purchases of property and equipment ( 8,022 ) ( 11,158 )

Acquisition of restaurants from franchisee ( 14,048 ) ( 4,396 )

Proceeds from sales of assets 17,330 —

Payments for investments ( 76,513 ) ( 500 )

Cash used in investing activities ( 50,123 ) ( 33,499 )

Proceeds from sale of investments 107,700 —

Cash (used in) provided by investing activities 40,495 ( 11,658 )

Financing activities

Proceeds from exercise of stock options — 708

Repayments of long-term debt — ( 3,650 )

Purchases of common stock ( 120,772 ) —

14 unchanged sentences

Wingstop Inc., together with its consolidated subsidiaries (collectively, “Wingstop” or the “Company”), is in the business of franchising and operating Wingstop restaurants.

As of September 28, 2024, the Company had a total of 2,458 restaurants system-wide.

As of March 29, 2025, the Company had a total of 2,689 restaurants system-wide.

The Company’s restaurant base is approximately 98 % franchised, with 2,638 franchised locations (including 388 restaurants in international locations and U.S.

territories) and 56 company-owned restaurants as of September 28, 2024.

territories) and 51 company-owned restaurants as of March 29, 2025.

Basis of presentation.

1 unchanged sentence

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 September 28, 2024 and December 30, 2023, and operating results are for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023.

Balance sheet amounts are as of March 29, 2025 and December 28, 2024, and operating results are for the thirteen weeks ended March 29, 2025 and March 30, 2024.

Certain prior period information on the Consolidated Balance Sheets have been reclassified to conform to the current presentation.

5 unchanged sentences

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 September 28, 2024 and December 30, 2023 were as follows (in thousands):

September 28, 2024 December 30, 2023

Cash, cash equivalents, and restricted cash within the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows as of March 29, 2025 and December 28, 2024 were as follows (in thousands):

March 29, 2025 December 28, 2024

Cash and cash equivalents $ 251,382 $ 315,910

4 unchanged sentences

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 disclosed in the Annual Report.

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

6 unchanged sentences

Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands):

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Thirteen Weeks Ended

2025 March 30,

Basic weighted average shares outstanding 28,385 29,349

1 unchanged sentence

Diluted weighted average shares outstanding 28,509 29,478

No equity awards were excluded from the dilutive earnings per share calculation for the thirteen and thirty-nine weeks ended September 28, 2024.

For the thirteen and thirty-nine weeks ended September 30, 2023, equity awards representing approximately 9,000 and 5,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive.

For the thirteen weeks ended March 29, 2025 and March 30, 2024, equity awards representing approximately 8,000 and 12,000 shares, respectively, were excluded from the dilutive earnings per share calculation because the effect would have been anti-dilutive.

(3) Stockholders’ Deficit

In connection with the Company’s regular dividend program, our Board of Directors declared a quarterly dividend of $ 0.22 per share of common stock in each of the first two quarters of 2024, and a quarterly dividend of $ 0.27 per share of common stock in the third quarter of 2024, resulting in aggregate declared dividends of $ 20.8 million, or $ 0.71 per share of common stock, during the thirty-nine weeks ended September 28, 2024.

Subsequent to the third quarter, on October 29, 2024, our Board of Directors declared a regular quarterly dividend of $ 0.27 per share of common stock for stockholders of record as of November 15, 2024.

The regular quarterly dividend is to be paid on December 6, 2024, totaling approximately $ 7.9 million.

In connection with the Company’s regular dividend program, our Board of Directors declared a quarterly dividend of $ 0.27 per share of common stock in the first quarter of 2025, resulting in a total dividend payment of approximately $ 7.6 million.

Subsequent to the first quarter, on April 29, 2025, our Board of Directors declared a regular quarterly dividend of $ 0.27 per share of common stock for stockholders of record as of May 16, 2025.

The regular quarterly dividend is to be paid on June 6, 2025, totaling approximately $ 7.5 million.

Share Repurchase Program

On August 17, 2023, the Company announced a share repurchase program with authorization to purchase up to $ 250.0 million of its outstanding shares of common stock (the “Share Repurchase Program”).

During the thirty-nine weeks ended September 28, 2024, the Company repurchased and retired 169,479 shares of its common stock at an average price of $ 377.09 per share.

As of September 28, 2024, $ 61.1 million remained available under the Share Repurchase Program.

In August 2023, the Company initially announced a share repurchase program, authorizing the repurchase of up to $ 250.0 million of its outstanding shares of common stock.

On December 5, 2024, the Company’s Board of Directors authorized the purchase of an additional $ 500.0 million of its outstanding shares of common stock under (collectively, the “Share Repurchase Program”), following the substantial completion of repurchases under the original 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 thirteen weeks ended March 29, 2025, in addition to the settlement of the ASR Agreement, the Company repurchased and retired 512,810 shares of its common stock at an average price of $ 233.54 per share.

As of March 29, 2025, $ 191.3 million remained available under the Share Repurchase Program.

(4) Fair Value Measurements

10 unchanged sentences

(“LPH”), are determined on a non-recurring basis, which results are summarized as follows (in thousands):

September 28, 2024 December 30, 2023

March 29, 2025 December 28, 2024

Fair Value Carrying

4 unchanged sentences

Level 2 $ 248,125 $ 233,709 $ 248,125 $ 230,905

Investments in bonds of LPH (2)

2024-1 Class A-2 Senior Secured Notes (1)

Level 2 $ 500,000 $ 507,550 $ 500,000 $ 496,050

Investments in debt securities (2)

Level 3 $ 79,925 $ 79,925 $ 3,699 $ 4,560

(1) The fair value of the 2020-1, 2022-1, and 2024-1 Class A-2 Senior Secured Notes was 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.

Refer to Note 9 for additional information regarding the Company’s investments.

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 $ 9.8 million and 27.5 %, respectively, for the thirteen weeks ended September 28, 2024, and $ 6.6 million and 25.4 %, respectively, for the thirteen weeks ended September 30, 2023.

The increase in the effective tax rate is primarily related to the impact of nondeductible expenses for executive compensation in the current fiscal year period.

Income tax expense and the effective tax rate were $ 28.5 million and 25.8 %, respectively, for the thirty-nine weeks ended September 28, 2024, and $ 18.0 million and 25.9 %, respectively, for the thirty-nine weeks ended September 30, 2023.

Income tax expense and the effective tax rate were $ 30.9 million and 25.1 %, respectively, for the thirteen weeks ended March 29, 2025, and $ 9.8 million and 25.3 %, respectively, for the thirteen weeks ended March 30, 2024.

The current period effective tax rate was comparable to the prior fiscal year period.

The increase in total tax expense is primarily related to the increase in Investment income, net as a result of the gain on sale of our investment in LPH during the fiscal first quarter 2025.

(6) Debt Obligations

Long-term debt consisted of the following components (in thousands):

September 28, 2024 December 30, 2023

March 29, 2025 December 28, 2024

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 ( 14,014 ) ( 14,724 )

1 unchanged sentence

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”), and (iii) a revolving financing facility of Series 2022-1 Variable Funding Senior Notes, Class A-1 (the “2022 Variable Funding Notes,” and together with the 2022 Class A-2 Notes, the “2022 Notes”), which permits borrowings of up to a maximum principal amount of $ 200 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit.

No borrowings were outstanding under the 2022 Variable Funding Notes as of September 28, 2024 and December 30, 2023.

As of September 28, 2024, the Company’s leverage ratio under the 2020 Class A-2 Notes and the 2022 Class A-2 Notes was less than 5.0 x.

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 March 29, 2025 and December 28, 2024.

As of March 29, 2025, the Company’s leverage ratio under the 2020 Class A-2 Notes, the 2022 Class A-2 Notes, and 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 following the principal payment made in the second quarter of 2023, and the entire outstanding balance of $ 720.9 million of the 2020 Class A-2 Notes and the 2022 Class A-2 Notes has been classified as long-term debt due after fiscal year 2026.

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 due after fiscal year 2026.

WINGSTOP INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

The 2020 Class A-2 Notes and 2022 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.

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

1 unchanged sentence

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.

The Company has operating leases for retail store locations, office space, and equipment.

The Company determines whether an arrangement is a lease at inception.

The Company's leases have remaining terms of 0.2 years to 13.3 years, some of which include options to extend the lease term for up to ten years .

The years remaining on the Company’s lease terms may include years that may be added to the lease terms by the exercise of options to renew when it is reasonably certain that the Company will exercise such options.

During the first fiscal quarter 2024, the Company executed a lease for an office building, which commenced in May 2024.

The operating lease has an initial lease term of 13.8 years with undiscounted fixed payments of $ 66.9 million over the initial term.

Components of lease expense were as follows (in thousands):

Thirty-Nine Weeks Ended

September 28,

2024 September 30,

Operating lease cost (1)

Variable lease cost (2)

Total lease cost

(1) Includes short-term leases, which are immaterial.

(2) Primarily related to adjustments for inflation, common area maintenance, and property tax.

Supplemental cash flow information related to leases is as follows (in thousands):

Thirty-Nine Weeks Ended

September 28,

2024 September 30,

Cash paid (received) for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases (1)

$ ( 4,849 ) $ 2,518

Right-of-use assets obtained in exchange for new operating lease liabilities $ 41,260 $ 3,947

(1) Includes tenant improvement reimbursements received.

(8) Stock-Based Compensation

During the thirty-nine weeks ended September 28, 2024, the Company granted 25,257 restricted stock units (“RSUs”) to certain employees.

The RSUs granted to certain employees generally vest ratably over a three-year period subsequent to the grant date and had a weighted-average grant-date fair value of $ 372.52 per unit.

In addition, the Company granted 24,015 performance stock units (“PSUs”) to certain employees during the thirty-nine weeks ended September 28, 2024.

Of the total PSUs granted, 20,593 PSUs are subject to a service condition and a performance vesting condition based on return on incremental invested capital (“ROI PSUs”).

The ROI 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 ROI PSUs is 250 % based on the level of performance achieved for the awards.

The remaining 3,422 PSUs granted are subject to a service condition and a performance vesting condition based on the number of net new restaurants opened over the

WINGSTOP INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

performance period (“NNR PSUs”).

During the thirteen weeks ended March 29, 2025, the Company granted 45,791 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 $ 223.59 per unit.

In addition, the Company granted 46,591 performance stock units (“PSUs”) to certain employees during the thirteen weeks ended March 29, 2025.

Of the total PSUs granted, 41,510 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.

The remaining 5,081 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.

1 unchanged sentence

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 $ 16.0 million and $ 10.0 million for the thirty-nine weeks ended September 28, 2024 and September 30, 2023, respectively, and was included in Selling, general and administrative (“SG&A”) expense in the Consolidated Statements of Comprehensive Income.

Total compensation expense related to all share-based awards, net of forfeitures recognized, was $ 5.3 million and $ 3.8 million for the thirteen weeks ended March 29, 2025 and March 30, 2024, 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 is 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 in the fiscal first quarter 2025 and recognized a gain of $ 97.2 million in “Investment income, net” on the Consolidated Statements of Comprehensive Income.

The Company reinvested $ 75.4 million in the newly formed entity for an 18.75 % non-controlling equity interest.

Substantially all of the reinvestment in the newly formed entity consisted of preference shares, which will be accounted for as held-to-maturity debt securities, recorded on an amortized cost basis.

Interest income related to the securities will be recognized using the effective interest method in “Interest expense, net” on the Consolidated Statements of Comprehensive Income.

The fair value of the debt securities approximates the current carrying value and was determined using Level 3 inputs.

Held-to-maturity debt securities are evaluated for credit losses on a quarterly basis under the current expected credit loss (“CECL”) methodology with an allowance recorded in “Investments” on the Consolidated Balance Sheets for expected lifetime credit losses.

When evaluating an investment for its current expected credit losses, the Company reviews factors such as credit ratings, term and macroeconomic trends, including current conditions and forecasts to the extent they are reasonable and supportable.

In connection with the investment in preference shares during the fiscal first quarter 2025, the Company recorded a provision for credit losses of $ 4.7 million in “Investment income, net” on the Consolidated Statements of Comprehensive Income.

In addition, the Company received 18.75 % of the outstanding common shares, which will be accounted for using the equity method of accounting, under which the Company’s share of the income of the investee will be recorded in “Investment income” on the Consolidated Statements of Comprehensive Income.

WINGSTOP INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(10) Revenue from Contracts with Customers

The following table represents a disaggregation of revenue from contracts with customers for the thirteen and thirty-nine weeks ended September 28, 2024 and September 30, 2023 (in thousands):

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

The following table represents a disaggregation of revenue from contracts with customers for the thirteen weeks ended March 29, 2025 and March 30, 2024 (in thousands):

Thirteen Weeks Ended

March 29, 2025 March 30, 2024

Royalty revenue $ 71,947 $ 61,192

3 unchanged sentences

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 fee revenue recognized in the thirteen and thirty-nine weeks ended September 28, 2024 was included in the deferred revenue balance as of December 30, 2023.

Approximately $ 12.5 million and $ 9.3 million of deferred revenue as of September 28, 2024 and December 30, 2023, respectively, relates to restaurants that have not yet opened, so the fees are not yet being amortized.

As the term of the franchise license is typically ten years , substantially all of the franchise fee revenue recognized in the thirteen weeks ended March 29, 2025 was included in the deferred revenue balance as of December 28, 2024.

Approximately $ 13.7 million and $ 13.5 million of deferred revenue as of March 29, 2025 and December 28, 2024, 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 7.4 years.

The Company did not have any material contract assets as of September 28, 2024.

(11) Acquisitions of Company-owned Restaurants

The Company acquired four existing restaurants from franchisees during the thirty-nine weeks ended September 28, 2024.

The aggregate purchase price was $ 14.0 million and was funded by cash flow from operations.

The following table summarizes the allocations of the purchase price to the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition (in thousands):

Purchase Price Allocation

Working capital $ 44

Property and equipment 253

Reacquired franchise rights 6,710

Goodwill 7,041

Total purchase price $ 14,048

The excess of the purchase price over the aggregate fair value of assets acquired was allocated to goodwill and is attributable to the benefits expected as a result of the acquisition, including sales and unit growth opportunities.

All of the goodwill from the acquisition is expected to be deductible for federal income tax purposes.

Pro-forma financial information of the combined entities is not presented due to the immaterial impact of the financial results of the acquisition on our consolidated financial statements.

The Company did not have any material contract assets as of March 29, 2025.

WINGSTOP INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(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

2025 March 30,

Royalty revenue, franchise fees and other $ 78,775 $ 67,097

Advertising fees 62,272 50,149

Company-owned restaurant sales 30,047 28,543

Total revenue 171,094 145,789

Cost of sales:

Food, beverage and packaging costs 11,241 9,903

Labor 7,153 6,675

Other operating costs 5,191 5,410

Vendor rebates ( 750 ) ( 717 )

Total cost of sales 22,835 21,271

Advertising expenses 65,795 53,192

Selling, general & administrative:

Transaction costs 497 —

System implementation costs 1,311 —

Stock-based compensation expense 5,312 3,812

Other segment expense (1)

24,320 21,366

Total selling, general and administrative 31,440 25,178

Depreciation and amortization 6,228 3,410

Loss on disposal of assets 6,535 —

Interest expense, net 8,910 4,544

Investment income, net ( 93,839 ) ( 303 )

Income tax expense 30,925 9,750

Net income $ 92,265 $ 28,747

(1) Other segment expense consists primarily of corporate related items such as headcount-related expenses, office rent expense, and other overhead costs.

(12) Subsequent Event

Subsequent to the end of the fiscal first quarter 2025, the Company acquired three existing restaurants from a franchisee.

The total purchase price was $ 9.3 million, funded by cash on hand.

The restaurant acquisitions are accounted for as a business combination.

The Company is still determining the estimated fair value of assets acquired and liabilities assumed.

The excess of the purchase price over the aggregate fair value of assets acquired will be allocated to goodwill.

The results of operations of these locations will be included in our Consolidated Statements of Comprehensive Income as of the date of acquisition.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements