Sixth Street’s acquisition of Wingstop UK is a “great example” of the value creation the Wingstop model can provide, with the global business seeking similar investments into its franchise partners.
Speaking on an earnings call yesterday (30 April), Wingstop’s global CFO Alex Kaleida said the QSR chain is capable of delivering industry-leading returns outside the US.
Wingstop was founded in 1994 and operates 2,650 restaurants globally. Its UK arm comprises c.60 restaurants operated by master franchisee Lemon Pepper Holdings, and was acquired by California-based investment firm Sixth Street for £400m in December 2024.
“We invested a modest $4m in Lemon Pepper Holdings and recognised a gain of $93.5m,” Kaleida told investors. “Confident in the long-term opportunity, we reinvested $75.4m of the proceeds and initiated a minority equity position into the newly formed acquisition entity.
“Our business continues to be supercharged for growth and we plan to seek similar investments.”
Wingstop’s global business reported a 15.7% rise in systemwide sales to $1.3bn in Q1 2025. Total revenue increased 17.4% to $171.1m, with 126 net new openings during the quarter.
Investment income increased from $0.3m in Q1 2024 to $93.8m in Q1 2025, primarily due to the sale of Wingstop’s non-controlling interest in Lemon Pepper Holdings. Wingstop reinvested $75.4m into the newly formed entity during Q1 2025.
The company said its financial outlook for the year is dependent on macroeconomic conditions, and remains focused on executing its proven strategy despite an uncertain backdrop.
Its international business continues to grow, with markets such as the GCC and Australia set to expand this year.
China remains a focus, according to CEO Michael Skipworth, but “we’re equally excited about India…we think it can be a meaningful opportunity for us.”
Commenting on the results, Skipworth said: “Despite the challenging and unpredictable macro-environment, our first quarter results demonstrate the staying power of our strategies and resiliency in our model.
“We opened a record 126 net new units in the first quarter, delivering 18% unit growth, nearly doubling the number of units opened during the first quarter last year. Our pipeline remains strong as our brand partners are experiencing industry leading returns. This growth is leading us to another record-breaking year of development and moving us along our path of becoming a Top 10 Global Restaurant Brand.”
