Market Overview

Preview: Shake Shack's Earnings

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On Thursday, October 29, Shake Shack (NYSE: SHAK) will release its latest earnings report. Decipher the announcement with Benzinga's help.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Shake Shack's per-share loss will be near $0.2 on sales of $125.62 million, according to Wall Street analysts. In the same quarter last year, Shake Shack reported EPS of $0.26 on revenue of $157.76 million.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to post earnings in line with the consensus estimate when it reports Thursday, EPS would be down 176.92%. Sales would be down 20.37% on a year-over-year basis. Here is how the Shake Shack's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate -0.37 0.01 0.12 0.20
EPS Actual -0.45 0.02 0.06 0.26
Revenue Estimate 93.08 M 146.31 M 163.99 M 157.66 M
Revenue Actual 91.79 M 143.20 M 151.44 M 157.76 M

Stock Performance

Shares of Shake Shack were trading at $71.04 as of October 27. Over the last 52-week period, shares are down 16.23%. Given that these returns are generally negative, long-term shareholders are probably a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Shake Shack is scheduled to hold the call at 17:00:00 ET and can be accessed here.

 

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Posted-In: Earnings