Wingstop has laid out plans to increase its presence in Manhattan with dozens of recent areas set to open in the market, CEO Charlie Morrison advised CNBC on Wednesday.
Many of these areas will come in the type of ghost kitchens the place the company will lean on digital orders and supply companies in the extremely dense market. Wingstop seeks to open 25 company-owned areas in the New York City borough.
“We believe our model being predominantly digital works great with ghost kitchens, which will be probably half the mix of those,” Morrison mentioned in a one-on-one with Jim Cramer on “Mad Money.”
The ghost kitchens can go in locations that aren’t consumer-facing, together with on the second ground or in the basement of a constructing, serving to the company to capitalize on its digital technique, he mentioned.
Digital is on the forefront of Wingstop’s technique as the company hopes to “digitize every transaction,” Morrison mentioned. The company reported that digital gross sales made up about 65% of enterprise in the second quarter.
“The key’s they’re kitchens accessible to supply drivers by way of DoorDash, Uber and others, that may come in, seize the meals and take it to everyone,” he mentioned. “Fits great in densely populated areas, cuts back the capital cost substantially.”
Ghost kitchens, or meals institutions with out dine-in service, have gained traction as the Covid pandemic hobbled the restaurant trade. The cooking amenities have allowed companies to chop again on prices related to managing bigger properties, particularly throughout lockdowns that fueled demand for deliveries.
Wingstop appears to be like to make the most of a enterprise mannequin that manufacturers like The Halal Guys, Dog Haus and Wow Bao have discovered success with. Ghost kitchens may create a $1 trillion international market by 2030, in keeping with Euromonitor.
The first location to open as a part of the enlargement plan will probably be on thirty eighth Street in Midtown, in keeping with the company’s web site. Wingstop has two eating places in operation in higher Manhattan, together with in the Harlem neighborhood.
Wingstop shares slid greater than 2% on Wednesday, although the company posted quarterly outcomes earlier than the bell that beat Wall Street estimates.
Revenue got here in at $74 million, up almost 12% 12 months over 12 months.
After closing at $166.11, Wingstop’s inventory is up 25% on the 12 months.