chicken wing fans you may have something to rejoice about.
Wingstop Chief Executive Officer Michael Skipworth told analysts during an earnings call Thursday that the company is experiencing deflation as bone-in chicken wing costs normalize from unusually high levels in 2021.
In fact, the multinational airline-themed restaurant chain reported that the cost of bone-in chicken wings plummeted 18.8% last quarter compared to the same period a year ago.
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Skipworth claims the company is one of the only brands benefiting from “significant commodity deflation” as the rest of the industry struggles. inflation recordwhich rose to 9.1% in June.
Wingstop reported that its total revenue increased 13.2% to $83.8 million for the three-month period ending June 25. System-wide sales increased 7.5% to $633.6 million during the same period. Profit increased 17.6% to $13.3 million, or 44 cents per diluted share, from $11.3 million, or 38 cents, in the prior year quarter.
“We navigated record inflation in 2021 and our brand partners took the appropriate pricing level that year to navigate that inflation and manage margins,” Skipworth said.
Wingstop says he’s heartened by the deflation he’s experiencing with chicken wings. Still, chicken prices across the industry have risen, like most other products, according to the Consumer Price Index (CPI).
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The index, which is a broad measure of the price of everyday goods, indicated that poultry rose 17.3% in June compared to a year ago. Chicken, in particular, rose 18.6%.
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Earlier this week, the US Department of Agriculture (USDA) even raised its forecast for wholesale poultry prices after seeing a rise in prices between May and June due to high energy, food and labor costs.
The USDA predicts that prices will increase between 26% and 29% in 2022.
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Tyson Foods, the world’s second largest processor and marketer of chicken, beef and pork, he even increased his tax year 2022 income outlook as customer demand for its chicken, beef and port continues to outstrip supply and prices rise due to inflation.
To combat this pressure, Tyson has passed some burden on to consumers in the form of price increases.
Lucas Manfredi of FOX Business contributed to this report.
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