Shake Shack Inc. saw its stock soar on Thursday after announcing a 39% increase in second-quarter profit, surpassing Wall Street’s revenue expectations. The burger chain reported a net income of $9.67 million, or 23 cents per share, compared to $6.95 million, or 16 cents per share, in the same quarter last year. The adjusted profit reached 27 cents per share, aligning with the FactSet consensus estimate.
Revenue for the second quarter climbed to $316.5 million from $271.8 million the previous year, exceeding the expected $314.4 million. Operating income more than doubled, rising to $10.8 million from $4.7 million.
Looking ahead, Shake Shack anticipates third-quarter revenue between $311.6 million and $317 million, with the FactSet consensus at $316.2 million. The company projects full-year 2024 revenue between $1.24 billion and $1.25 billion, nudging towards the higher end of its earlier estimate and matching the FactSet consensus of $1.25 billion.
Sharon Zackfia, an analyst from William Blair, reaffirmed an outperform rating for Shake Shack, noting the company’s “healthy” results. “Longer term, we continue to view Shake Shack’s growth runway as one of the strongest and most proven among emerging restaurant brands,” Zackfia commented. However, she also highlighted potential risks, including possible same-store sales volatility, a geographic concentration in New York City, wage inflation, and operational challenges due to ambitious expansion plans.
Before Thursday’s surge, Shake Shack’s stock had already risen 18.2% in 2024, outpacing the Nasdaq’s 17.2% increase.
Source: MarketWatch
