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) reported second-quarter fiscal 2022 results, wherein earnings beat the Zacks Consensus Estimate and revenues missed the same. Following the results, the company’s shares declined 6.2% on Aug 4. Investor sentiment was hurt as the company’s second-quarter revenues missed the consensus estimate and the third-quarter guidance also came in below the street estimates.
Earnings & Revenues Details
During the quarter, the company reported break-even earnings, beating the Zacks Consensus Estimate of a loss of 2 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 5 cents.
Quarterly revenues of $230.7 million lagged the Zacks Consensus Estimate of $238 million. The top line increased 23.1% on a year-over-year basis.
Shack sales during the quarter rose 22.1% to $223.1 million, whereas licensing revenues increased 28.5% to $7.7 million year over year. Shack system-wide sales in second-quarter fiscal 2022 soared 24.8% year over year to $351.7 million.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Same-Shack sales rose 10.1% in second-quarter fiscal 2022, primarily driven by 7.8% traffic growth. Urban same shack sales rose 19% compared to 2021.
During the first quarter of fiscal 2022, its average weekly sales came in at $76,000, up 12% sequentially.
Operating Highlights
During the reported quarter, the company’s operating loss totaled $0.8 million. Shack-level operating profit margin came in at 18.8% compared to 19.2% in the prior-year quarter.
Total expenses (as a percentage of company revenues) increased 220 basis points (bps) year over year. Food and paper costs (as a percentage of company revenues) increased 70 basis points (bps) year over year. Labor and related expenses declined 50 bps year over year to 29.5%.
Adjusted EBITDA for the reported quarter amounted to $22.1 million compared to $20.6 million reported in the year-ago quarter. Adjusted EBITDA margin contracted 140 bps to 9.6%.
Balance Sheet
As of Jun 29, 2022, cash and cash equivalent totaled $278.3 million compared with $302.4 million as of Dec 29, 2021. Total long-term debt at the end of the quarter increased to $244.1 million compared with $243.5 million at the end of Dec 29, 2021.
Q3 & 2022 Outlook
For third-quarter fiscal 2022, the company expects total revenues between $221 million and $226.5 million. The Zacks Consensus Estimate for revenues is pegged at $245.2 million. Shack sales are anticipated in the range of $213-$218 million. The company’s licensing revenue expectation is between $8 million and $8.5 million for third-quarter fiscal 2022.
For third-quarter fiscal 2022, Shack-Level operating profit is projected in the range of 16-18%. Depreciation expense for 2022 is expected in the range of $70-$75 million.
Potbelly sports a Zacks Rank #1 (Strong Buy). PBPB has a trailing four-quarter earnings surprise of 26.2%, on average. Shares of PBPB have declined 24.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 14.1% and 90.4%, respectively, from the corresponding year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has long-term earnings growth of 34.4%. Shares of the company have increased 21.9% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 25.7% and 120.8%, respectively, from the year-ago period’s levels.
Dollar Tree carries a Zacks Rank #2. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average. The stock has gained 64.9% in the past year.
The Zacks Consensus Estimate for Dollar Tree’s 2022 sales and EPS suggests growth of 6.7% and 40.5%, respectively, from the corresponding year-ago period’s levels.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Shake Shack (SHAK) Q2 Earnings Top, Q3 View Disappoints, Stock Down
Shake Shack Inc. (SHAK - Free Report) reported second-quarter fiscal 2022 results, wherein earnings beat the Zacks Consensus Estimate and revenues missed the same. Following the results, the company’s shares declined 6.2% on Aug 4. Investor sentiment was hurt as the company’s second-quarter revenues missed the consensus estimate and the third-quarter guidance also came in below the street estimates.
Earnings & Revenues Details
During the quarter, the company reported break-even earnings, beating the Zacks Consensus Estimate of a loss of 2 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 5 cents.
Quarterly revenues of $230.7 million lagged the Zacks Consensus Estimate of $238 million. The top line increased 23.1% on a year-over-year basis.
Shack sales during the quarter rose 22.1% to $223.1 million, whereas licensing revenues increased 28.5% to $7.7 million year over year. Shack system-wide sales in second-quarter fiscal 2022 soared 24.8% year over year to $351.7 million.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Shake Shack, Inc. price-consensus-eps-surprise-chart | Shake Shack, Inc. Quote
Comps Discussion
Same-Shack sales rose 10.1% in second-quarter fiscal 2022, primarily driven by 7.8% traffic growth. Urban same shack sales rose 19% compared to 2021.
During the first quarter of fiscal 2022, its average weekly sales came in at $76,000, up 12% sequentially.
Operating Highlights
During the reported quarter, the company’s operating loss totaled $0.8 million. Shack-level operating profit margin came in at 18.8% compared to 19.2% in the prior-year quarter.
Total expenses (as a percentage of company revenues) increased 220 basis points (bps) year over year. Food and paper costs (as a percentage of company revenues) increased 70 basis points (bps) year over year. Labor and related expenses declined 50 bps year over year to 29.5%.
Adjusted EBITDA for the reported quarter amounted to $22.1 million compared to $20.6 million reported in the year-ago quarter. Adjusted EBITDA margin contracted 140 bps to 9.6%.
Balance Sheet
As of Jun 29, 2022, cash and cash equivalent totaled $278.3 million compared with $302.4 million as of Dec 29, 2021. Total long-term debt at the end of the quarter increased to $244.1 million compared with $243.5 million at the end of Dec 29, 2021.
Q3 & 2022 Outlook
For third-quarter fiscal 2022, the company expects total revenues between $221 million and $226.5 million. The Zacks Consensus Estimate for revenues is pegged at $245.2 million. Shack sales are anticipated in the range of $213-$218 million. The company’s licensing revenue expectation is between $8 million and $8.5 million for third-quarter fiscal 2022.
For third-quarter fiscal 2022, Shack-Level operating profit is projected in the range of 16-18%. Depreciation expense for 2022 is expected in the range of $70-$75 million.
The company currently has a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Potbelly Corporation (PBPB - Free Report) , Arcos Dorados Holdings Inc. (ARCO - Free Report) and Dollar Tree Inc. (DLTR - Free Report) .
Potbelly sports a Zacks Rank #1 (Strong Buy). PBPB has a trailing four-quarter earnings surprise of 26.2%, on average. Shares of PBPB have declined 24.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 14.1% and 90.4%, respectively, from the corresponding year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has long-term earnings growth of 34.4%. Shares of the company have increased 21.9% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 25.7% and 120.8%, respectively, from the year-ago period’s levels.
Dollar Tree carries a Zacks Rank #2. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average. The stock has gained 64.9% in the past year.
The Zacks Consensus Estimate for Dollar Tree’s 2022 sales and EPS suggests growth of 6.7% and 40.5%, respectively, from the corresponding year-ago period’s levels.