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Shares of Shake Shack Inc. (SHAK - Free Report) have done exceptionally well so far this year, courtesy of expansion efforts, robust same-shack sales and digitalization. Year to date, the stock has risen 45.4% compared with the industry’s and S&P 500’s growth of 6.2% and 19.6%, respectively.
The Zacks Rank #2 (Buy) company’s 2023 earnings and sales are likely to witness 209.7% and 20.1% year-over-year increases, respectively.
Let’s delve deeper.
Expansion Efforts
Shake Shack is committed to strategizing its expansion plans effectively. In fiscal 2023, it expects to add approximately 80 units of system-wide Shack, suggesting an uptick from the prior expectation of 75 units. It projects to launch approximately 40 company-operated openings during fiscal 2024. Approximately 40 licensed Shack openings are also suggested.
Since the first opening of drive-thrus in 2021, it has opened 21 company-operated drive-thrus. The company emphasized consideration of new countries, territories and formats to drive growth over the long term. In June 2023, SHAK also opened its first licensed drive-thru in Dubai. Management expects to open new stores in Malaysia (2024) through a new development agreement.
Same-Shack Sales Drive Growth
Shake Shack continues to impress investors with robust global same-shack sales growth. The metric increased 10.3%, 10.1%, 6.3% and 10.3% in the first, second, third and fourth quarters of fiscal 2022, respectively.
During the first, second and third quarters of fiscal 2023, the measure improved 10.3%, 3% and 2.3%, respectively, year over year. In the fourth quarter, same-shack sales are estimated to grow by low single digits year over year. For 2023, our model predicts the metric to rise 4.8% year over year.
Image Source: Zacks Investment Research
Robust Digitalization
SHAK has been investing in digital transformation, which is crucial to its growth. Digital sales continue to impress investors. Its current digital sales are approximately 30% of its business. The company has been making more investments in digitization in an effort to sustain its digital guest enhancement strategies in the near term.
Earlier, management stated that its main focus for digital investment was to improve the Kiosk experience through greater omnichannel adoption and long-term guest connection, with all new features and offers made available on the platform. These updates are expected to enhance guest experience and convenience, resulting in higher average checks.
Other Key Picks
Below, we have presented some better-ranked stocks from the Zacks Retail-Wholesale sector.
The Zacks Consensus Estimate for Wingstop’s 2024 sales and earnings per share (EPS) suggests a rise of 15.6% and 17.2%, respectively, from the year-ago levels.
Brinker International, Inc. (EAT - Free Report) presently flaunts a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 223.6%, on average. Shares of EAT have inched up 2.6% in the past year.
The Zacks Consensus Estimate for EAT’s fiscal 2024 sales and EPS indicates a gain of 5% and 26.2%, respectively, from the prior-year levels.
FAT Brands Inc. (FAT - Free Report) currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 36.6%, on average. The stock has declined 14.5% in the past year.
The Zacks Consensus Estimate for FAT Brands’ 2024 sales and EPS suggests an increase of 35.6% and 27.4%, respectively, from the year-earlier levels.
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Shake Shack (SHAK) Stock Jumps 45% YTD: What's Driving It?
Shares of Shake Shack Inc. (SHAK - Free Report) have done exceptionally well so far this year, courtesy of expansion efforts, robust same-shack sales and digitalization. Year to date, the stock has risen 45.4% compared with the industry’s and S&P 500’s growth of 6.2% and 19.6%, respectively.
The Zacks Rank #2 (Buy) company’s 2023 earnings and sales are likely to witness 209.7% and 20.1% year-over-year increases, respectively.
Let’s delve deeper.
Expansion Efforts
Shake Shack is committed to strategizing its expansion plans effectively. In fiscal 2023, it expects to add approximately 80 units of system-wide Shack, suggesting an uptick from the prior expectation of 75 units. It projects to launch approximately 40 company-operated openings during fiscal 2024. Approximately 40 licensed Shack openings are also suggested.
Since the first opening of drive-thrus in 2021, it has opened 21 company-operated drive-thrus. The company emphasized consideration of new countries, territories and formats to drive growth over the long term. In June 2023, SHAK also opened its first licensed drive-thru in Dubai. Management expects to open new stores in Malaysia (2024) through a new development agreement.
Same-Shack Sales Drive Growth
Shake Shack continues to impress investors with robust global same-shack sales growth. The metric increased 10.3%, 10.1%, 6.3% and 10.3% in the first, second, third and fourth quarters of fiscal 2022, respectively.
During the first, second and third quarters of fiscal 2023, the measure improved 10.3%, 3% and 2.3%, respectively, year over year. In the fourth quarter, same-shack sales are estimated to grow by low single digits year over year. For 2023, our model predicts the metric to rise 4.8% year over year.
Image Source: Zacks Investment Research
Robust Digitalization
SHAK has been investing in digital transformation, which is crucial to its growth. Digital sales continue to impress investors. Its current digital sales are approximately 30% of its business. The company has been making more investments in digitization in an effort to sustain its digital guest enhancement strategies in the near term.
Earlier, management stated that its main focus for digital investment was to improve the Kiosk experience through greater omnichannel adoption and long-term guest connection, with all new features and offers made available on the platform. These updates are expected to enhance guest experience and convenience, resulting in higher average checks.
Other Key Picks
Below, we have presented some better-ranked stocks from the Zacks Retail-Wholesale sector.
Wingstop Inc. (WING - Free Report) currently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 28.9%, on average. The stock has risen 51.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Wingstop’s 2024 sales and earnings per share (EPS) suggests a rise of 15.6% and 17.2%, respectively, from the year-ago levels.
Brinker International, Inc. (EAT - Free Report) presently flaunts a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 223.6%, on average. Shares of EAT have inched up 2.6% in the past year.
The Zacks Consensus Estimate for EAT’s fiscal 2024 sales and EPS indicates a gain of 5% and 26.2%, respectively, from the prior-year levels.
FAT Brands Inc. (FAT - Free Report) currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 36.6%, on average. The stock has declined 14.5% in the past year.
The Zacks Consensus Estimate for FAT Brands’ 2024 sales and EPS suggests an increase of 35.6% and 27.4%, respectively, from the year-earlier levels.