Shake Shack Profit Tops Estimates as New Stores Boost Salesby
Chain raises revenue guidance for this year to $190 million
Company plans to open 12 new U.S. locations this year
Shake Shack Inc., whose stock has more than doubled since its January public offering, beat third-quarter profit estimates and raised its forecast for sales this year as new locations boost revenue.
Profit was 12 cents a share, excluding some items, the New York-based company said in a statement Thursday. Analysts estimated 7 cents, the average of projections compiled by Bloomberg. Same-store sales increased 17.1 percent, while analysts estimated a 10.6 percent increase, according to Consensus Metrix.
The burger-and-fries chain has been opening locations outside of its East Coast home market, with new stores recently in Chicago and Austin, Texas. The expansion has increased sales for the company, which got its start in 2001 as a hot-dog cart in Manhattan’s Madison Square Park. Recently, Shake Shack has had success partnering with local vendors to sell items such as custard mixed with Intelligentsia coffee beans and Glazed & Infused doughnuts.
“Both core market and new stores are all doing really, really well,” said Bloomberg Intelligence analyst Michael Halen. “It’s strong across the board.”
The company raised its forecast for revenue to be as much as $190 million this year, compared with a previous estimate of as much as $174 million. Analysts projected $180.1 million, on average. Shake Shack also increased its guidance for same-store sales growth this year. The chain defines sales by that measure as restaurants open at least 24 months.
The shares fell 2.2 percent to $49.99 at the close in New York. The company went public at the end of January, offering shares for $21 each.
Shake Shack plans to open 12 stores in the U.S. and six abroad this year. The company’s first location in Japan is set to open this month.
Revenue climbed 67 percent to $53.3 million in the quarter, topping analysts’ estimate of $47.3 million.