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Key Takeaways
- Shake Shack Inc. posted better-than-expected results and gave a strong outlook for this year, sending its shares soaring 26% Thursday.
- Operating profit margin for Shake Shack was 19.8% for the latest quarter, and the restaurant chain predicts it will be 20% to 21% for this fiscal year.
- Shake Shack added 24 locations in the quarter, and expects to open 80 more in 2024.
Shake Shack Inc.’s (SHAK) shares skyrocketed Thursday as the burger restaurant chain posted better-than-expected earnings for the fourth quarter and gave a strong outlook on boosted margins and added locations.
The company reported fourth-quarter earnings per share (EPS) of 2 cents, double estimates. Revenue rose 20% to $286.2 million, also beating forecasts, with $275.8 million coming from restaurant sales and $10.5 million from licensing agreements. Same-store sales were up 2.8% compared with the year-ago quarter.
Operating profit margin at the restaurant level came in at 19.8%, and the company said in a shareholder letter that a “key pillar of our 2023 Strategic Priorities was improving profitability in our Shacks.” The company said that number is expected to be 20% to 21% for the current year. In addition, revenue is predicted to grow 11% to 15% this year.
Shake Shack said it opened 15 new company-owned domestic locations and nine licensed ones in the latest quarter, including sites in Thailand and Mexico. It said it anticipates opening 80 more in 2024.
Chief Financial Officer (CFO) Katie Fogertey added that the company’s plans for this year are “to improve the overall guest experience, drive sales, lower the total cost to serve, further optimize labor, show improvement in how we build and open our Shacks, and make the critical investments in our teams.”
Shares of Shake Shack gained 26% Thursday to finish the session at $98.40, their highest level since the summer of 2021.