Chicken wings may be more popular than ever, as American consumers housebound by the COVID-19 pandemic seek an alternative to meats less readily available after virus-related plant closings.
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Wing stockpiles, however, are holding up well. They have, in fact, “been in great supply during the entire pandemic,” Wingstop CEO Charles Morrison told FOX Business.
While chicken wing prices fell sharply during April – from about $1.60 per pound to a low of 96 cents per pound – as demand fizzled due to restaurant closures, they have since rallied.
Wings reached nearly $1.30 a pound as disruptions in the beef and pork supply chains led to shortages of those meats and are likely to rise further as states begin easing “stay-at-home” orders and restaurants start to reopen their doors.
“Chicken wings are one of the more volatile commodities out there,” Morrison said, adding that the company has developed a pricing strategy that accounts for the fluctuations in cost. Additionally, boneless wings and tenders, which make up about 35 percent of the company’s total product purchases, are contracted on an annual basis.
Morrison says Wingstop’s supply chain looks healthy as the short growth cycle of chickens is “comforting” and the diversity of vendors provides flexibility.
Wingstop sources its chicken wings from 20 facilities across the country and while some sites have been slowed by COVID-19, the impact has been “minimal,” Morrison said. Wingstop was one of the first restaurant chains to shut its dining rooms due to the pandemic, closing its doors on March 16, and will likely be one of the last to reopen, according to Morrison.
Eighty percent of Wingstop’s prior sales were for takeout and delivery, and the company’s digital platform has displayed its potential as online sales surged 47 percent during the final weeks of March. Additionally, Wingstop wants to “maintain a safe and clean environment” for its customers, Morrison said.
Wingstop reported a first-quarter profit of $8.1 million, or 27 cents a share, on Wednesday as total revenue rose 15 percent to $55.4 million. System-wide sales, which account for both company-owned and franchised restaurants, rose 19 percent to $429.9 million.
Wingstop shares rose 43 percent this year through Wednesday, outperforming the S&P 500’s 12 percent drop.