Key Takeaways
- Shake Shack beat quarterly profit and sales estimates on higher prices.
- The burger-and-milkshake chain reported same-store sales up 4%, higher than expected.
- Shake Shack predicted it would have positive free cash flow for the year, the first time since 2017.
Shake Shack (SHAK) shares skyrocketed after the company posted better-than-anticipated results and gave an upbeat forecast as it benefited from higher prices.
The burger-and-milkshake chain reported second-quarter adjusted earnings per share (EPS) of $0.27, with revenue rising 16% to more than $316 million. Both exceeded forecasts. Same-store sales rose 4%, beating estimates, driven by improvements in traffic over the first quarter as well as a more favorable mix of customer orders.
Shares of Shake Shack rose some 16% in recent trading and are up about 37% year-to-date.
Traffic fell 0.8%, which the company blamed on slowing marketing in June, but turned positive in July. The company said challenges to traffic in the New York City area continued.
CEO Rob Lynch, who moved from Papa John’s (PZZA) in May, said Shake Shack set records for sales, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), and free cash flow. He said the chain remained on track to meet its 2024 financial goals, including revenue growth of 14% to 15% for the year.
The company predicted that it will achieve positive free cash flow for the year, the first time it’s done so since 2017.
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