We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Shake Shack Inc. (SHAK - Free Report) posted robust first-quarter 2017 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.
However, the company’s shares lost over 2% in afterhours trading on May 4 as comps declined in the quarter.
Earnings and Revenue Discussion
Shake Shack’s adjusted earnings of 10 cents per share beat the Zacks Consensus Estimate as well as the year-ago figure of 8 cents by 25%. The year-over-year upside reflects an increase in revenues.
Revenues surged 41.7% year over year to $76.7 million and beat the Zacks Consensus Estimate of $75.4 million by 1.7%. An increase in Shack sales and licensing revenues, led to the improvement.
Behind the Headline Numbers
Same-Shack sales (or comps) declined 2.5% year over year due to a 3.4% decrease in guest traffic, somewhat offset by a combined increase in price and sales mix of 0.9%. Notably, the comps decline compared unfavorably with prior-quarter comps growth of 1.6% as well as the prior-year quarter rise of 9.9%.
The holiday shift in March as well as comparatively colder weather conditions in the Northeast region, which makes up a high percentage of the company’s sales, hurt comps.
Total operating expenses, as a percentage of revenues, increased 140 basis points (bps) to 92.7% mainly on a 240 bps increase in labor costs and 90 bps rise in other operating expenses. However, these were somewhat offset by a decline of 170 bps and 20 bps in general and administrative expenses and food and paper costs, respectively.
As a percentage of Shack sales, Shack-level operating profit margins decreased 300 bps to 25.2% primarily due to increased labor and related expenses.
Adjusted EBITDA (earning before interest, tax, depreciation and amortization) surged 28.9% to $12.2 million. However, as a percentage of total revenue, adjusted EBITDA margins decreased roughly 150 bps to 15.9% from 17.4% in the year-ago quarter.
2017 Outlook
Shake Shack has updated its full-year 2017 guidance.
The company now expects revenues in the range of $351 million to $355 million, up from $349–$353 million projected earlier.
Meanwhile, it projects Same-Shack sales growth to be flat on a year-over-year basis as compared with the growth in the band of 2–4%, anticipated earlier. Notably, this includes roughly 1.5% to 2% of menu price increases taken in the end of December.
Shack-level operating profit margin is still guided between 26.5% and 27.5%, while general and administrative expenses are expected between $38 million and $40 million.
The company now expects to open 23 to 24 new domestic company-operated Shacks in 2017, up from 22-23 guided earlier and 12 net new licensed Shacks, up from 11 announced earlier.
McDonald's Corp. (MCD - Free Report) reported first-quarter adjusted earnings per share of $1.47, beating the Zacks Consensus Estimate of $1.32 by 11.4%. Earnings also increased 18% year over year.
Chipotle Mexican Grill, Inc.’s (CMG - Free Report) first-quarter 2017 adjusted earnings of $1.60 per share outpaced the Zacks Consensus Estimate of $1.28 by 25%. Also, earnings compared favorably with the year-ago quarter figure of a loss of 88 cents per share, given a substantial rise in revenues.
In first-quarter 2017, Yum! Brands, Inc. (YUM - Free Report) posted earnings of 65 cents per share that outpaced the Zacks Consensus Estimate of 60 cents by 8.3%. Further, earnings increased 17% year over year due to lower share count.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Shake Shack (SHAK) Stock Declines Despite Q1 Earnings Beat
Shake Shack Inc. (SHAK - Free Report) posted robust first-quarter 2017 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.
However, the company’s shares lost over 2% in afterhours trading on May 4 as comps declined in the quarter.
Earnings and Revenue Discussion
Shake Shack’s adjusted earnings of 10 cents per share beat the Zacks Consensus Estimate as well as the year-ago figure of 8 cents by 25%. The year-over-year upside reflects an increase in revenues.
Revenues surged 41.7% year over year to $76.7 million and beat the Zacks Consensus Estimate of $75.4 million by 1.7%. An increase in Shack sales and licensing revenues, led to the improvement.
Behind the Headline Numbers
Same-Shack sales (or comps) declined 2.5% year over year due to a 3.4% decrease in guest traffic, somewhat offset by a combined increase in price and sales mix of 0.9%. Notably, the comps decline compared unfavorably with prior-quarter comps growth of 1.6% as well as the prior-year quarter rise of 9.9%.
The holiday shift in March as well as comparatively colder weather conditions in the Northeast region, which makes up a high percentage of the company’s sales, hurt comps.
Total operating expenses, as a percentage of revenues, increased 140 basis points (bps) to 92.7% mainly on a 240 bps increase in labor costs and 90 bps rise in other operating expenses. However, these were somewhat offset by a decline of 170 bps and 20 bps in general and administrative expenses and food and paper costs, respectively.
As a percentage of Shack sales, Shack-level operating profit margins decreased 300 bps to 25.2% primarily due to increased labor and related expenses.
Adjusted EBITDA (earning before interest, tax, depreciation and amortization) surged 28.9% to $12.2 million. However, as a percentage of total revenue, adjusted EBITDA margins decreased roughly 150 bps to 15.9% from 17.4% in the year-ago quarter.
2017 Outlook
Shake Shack has updated its full-year 2017 guidance.
The company now expects revenues in the range of $351 million to $355 million, up from $349–$353 million projected earlier.
Meanwhile, it projects Same-Shack sales growth to be flat on a year-over-year basis as compared with the growth in the band of 2–4%, anticipated earlier. Notably, this includes roughly 1.5% to 2% of menu price increases taken in the end of December.
Shack-level operating profit margin is still guided between 26.5% and 27.5%, while general and administrative expenses are expected between $38 million and $40 million.
The company now expects to open 23 to 24 new domestic company-operated Shacks in 2017, up from 22-23 guided earlier and 12 net new licensed Shacks, up from 11 announced earlier.
Shake Shack has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Shake Shack, Inc. Price, Consensus and EPS Surprise | Shake Shack, Inc. Quote
Peer Releases
McDonald's Corp. (MCD - Free Report) reported first-quarter adjusted earnings per share of $1.47, beating the Zacks Consensus Estimate of $1.32 by 11.4%. Earnings also increased 18% year over year.
Chipotle Mexican Grill, Inc.’s (CMG - Free Report) first-quarter 2017 adjusted earnings of $1.60 per share outpaced the Zacks Consensus Estimate of $1.28 by 25%. Also, earnings compared favorably with the year-ago quarter figure of a loss of 88 cents per share, given a substantial rise in revenues.
In first-quarter 2017, Yum! Brands, Inc. (YUM - Free Report) posted earnings of 65 cents per share that outpaced the Zacks Consensus Estimate of 60 cents by 8.3%. Further, earnings increased 17% year over year due to lower share count.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>