Randy Garutti, chief executive officer of Shake Shack, said, “We continue to execute on our growth strategy, while delivering industry-leading AUVs and, in this past quarter, our 30.8% Shack-level operating profit margin set a new record”.
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After the release of the report, the stock changed hands at $37.25, down $3.62 or 8.8 percent in extended trading.
While its sales at existing stores are decelerating, Shake Shake continues to press forward with an aggressive expansion plan, raising its guidance for new stores it will open this year to 18 from 16. BlackRock Group LTD boosted its stake in shares of Shake Shack by 5.9% in the first quarter.
The restaurant reported earnings of $0.14 per share against expectations of $0.13. Prudential Financial Inc. acquired a new stake in shares of Shake Shack during the first quarter valued at approximately $295,000. Disappointing comps and the stock’s lofty valuation weighed on Shake Shack stock. The stock now has a consensus rating of “Hold” and a consensus target price of $39.80. They also plan to open seven licensed Shacks, net a relocation, which is an increase of one Shack from the previous outlook. The company has a market cap of $911.93 million and a price-to-earnings ratio of 122.00. The firm has a 50-day moving average price of $38.40 and a 200 day moving average price of $36.87. Analysts are modeling revenue of $251.9 million for the year.
The burger restaurant reported second-quarter earnings of 14 cents per share on revenue of $66.5 million, compared to analysts expectations of 13 cents per share on revenue of $63 million, according to a consensus estimate from Thomson Reuters. The company’s revenue for the quarter was up 37.1% on a year-over-year basis. In addition, management trimmed its full year EPS forecast from $1.00-$1.06 to $0.90-$0.95.
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Shake Shack also is expanding overseas in countries including the United Kingdom and Japan. The Company serves an American menu of burgers, hot dogs, crispy chicken, frozen custard, crinkle cut fries, shakes, beer and wine, among others.
