Shake Shack Drops On Lower Comps, Sales Miss

Shake Shack Inc SHAK missed analysts' revenue expectations amid a year-over-year drop in comparable store sales in the fourth quarter, sending the burger chain's share price down in after-hours trading Monday.

Same-store sales were down 3.6% year over year and the company also issued fiscal 2020 sales guidance below estimates.

Shake Shack reported quarterly earnings of 6 cents per share, unchanged from the same period last year. Quarterly sales came in at $151.4 million, missing the Street estimate of 1.17%.

The company said it had 25 system-wide store openings during the quarter, including 12 domestic company-operated stores and 13 licensed Shacks. Four licensed stores closed, including three in Russia.

2019 Highlights

• Total revenue increased 29.4% to $594.5 million.
• Store sales increased 29.0% to $574.6 million.
• Same-store sales increased 1.3%.

Management had warned late last year that the chain's move to GrubHub Inc GRUB as its exclusive partner for delivery would likely have a short-term negative impact on revenue, particularly in places where GrubHub isn't the dominant food delivery option. 

CEO Randy Garutti focused on the company's growth over the full year in a statement, noting that it opened 73 stores around the world in 2019 and that total revenue on the year increased by nearly 30%.

“Looking forward, we expect 2020 will be another year of strong unit growth, domestically and internationally," Garutti said.

SHAK Price Action

Shake Shack shares were down 9.27% in after-hours trading to $66.75. Shake Shack's stock has risen nearly 30% since the start of 2020.

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Photo by m01229 via Wikimedia.