Wingstop (WING 3.98%) is thriving in a challenging environment. On March 11, COVID-19 was declared a global pandemic by the World Health Organization. Since then, Wingstop's sales have soared 37% year over year, according to the company's second-quarter 2020 press release.
Wingstop's Q2 ran from March 29 through June 27. Therefore, its quarterly results cover a time when dining rooms were closed around the world, and consumer behavior was shifting. According the U.S. Census Bureau, sales for food services and drinking places decreased 23% in the first six months of 2020 compared with the same period of 2019. Wingstop bucked this trend with its systemwide sales increasing 28% in the first two quarter of 2020.
A rare restaurant overachiever
Many restaurants have struggled with the coronavirus. But Wingstop was in a strong position: In 2019, off-premise (to-go) orders accounted for 80% of total sales. Therefore, it could easily maintain and even grow its business once its customers began sheltering at home.
Wingstop added 23 net restaurants during the quarter. At U.S. locations already opened at least one year, sales increased 32% year over year. Between new locations and the sales increase, total systemwide sales grew 37%. This led to a surge in net income, which was up 135% to $11.5 million.
Because of its strong cash flow, Wingstop's management decided to raise its dividend, a rare move among dividend stocks this year. Previously, quarterly payouts were $0.11 per share. Today, it raised the dividend by 27% to $0.14 per share.
Wingstop's conference call to discuss Q2 results is scheduled for later today.