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Shake Shack Inc. (SHAK - Free Report) reported fourth-quarter fiscal 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate and improved year over year. The top line beat the Zacks Consensus Estimate for the second straight quarter.
Earnings & Revenue Details
The company’s fourth-quarter loss came in at 6 cents per share, narrower than the Zacks Consensus Estimate of a loss of 11 cents. In the prior-year quarter, the company had reported a loss of 11 cents. Quarterly revenues of $238.5 million beat the Zacks Consensus Estimate of $238 million. The top line increased 17.4% on a year-over-year basis.
Shack sales rose 17.4% to $229.9 million, whereas licensing revenues increased 16.6% to $8.6 million year over year. Shack system-wide sales soared 15.8% year over year to $364.1 million.
Comps Discussion
Same-Shack sales rose 5.1% while average weekly sales came in at $76,000, up from $73,000 in the third-quarter fiscal 2022.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Operating loss totaled $6.3 million. Shack-level operating profit margin came in at 18.8% compared with 16.4% in the prior-year quarter.
Total expenses, and food and paper costs (as percentages of company revenues) decreased 60 basis points (bps) and 50 bps, respectively, year over year. Labor and related expenses declined 70 bps year over year to 28.9%.
Adjusted EBITDA for the reported quarter amounted to $19.3 million compared with $12.4 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 200 bps to 8.1%.
Balance Sheet
As of Dec 28, 2022, cash and cash equivalents totaled $230.5 million compared with $302.4 million as of Dec 29, 2021. Total long-term debt at the end of the reported quarter increased to $244.6 million compared with $243.5 million at the end of Dec 29, 2021.
Q1 & 2023 Outlook
For first-quarter fiscal 2023, the company expects total revenues between $240.25 million and $245.75 million. The Zacks Consensus Estimate is pegged at $242 million. Shack sales are anticipated in the range of $232-$237 million. Licensing revenues are projected between $8.25 million and $8.75 million.
For first-quarter fiscal 2023, Shack-Level operating profit is projected in the range of 16-18%. Depreciation expense for 2023 is expected in the range of $86-$91 million.
The company currently has a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks in the Zacks Retail – Restaurants industry are Arcos Dorados Holdings Inc. (ARCO - Free Report) , Yum China Holdings, Inc. (YUMC - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) . While Arcos Dorados sports a Zacks Rank #1 (Strong Buy), Brinker and Darden carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arcos Dorados has a long-term earnings growth of 11.6%. Shares of the company have increased 22.2% in the past year.
The Zacks Consensus Estimate for ARCO’s 2023 sales and EPS suggests growth of 8.1% and 4.2%, respectively, from the year-ago period’s levels.
Yum China carries a Zacks Rank #2. YUMC has a long-term earnings growth rate of 19.5%. The stock has gained 16.3% in the past year.
The Zacks Consensus Estimate for Yum China’s 2023 sales and EPS suggests growth of 21% and 70.5%, respectively, from the year-ago period’s reported levels.
Darden has a long-term earnings growth rate of 9.8%. Shares of DRI have gained 1.2% in the past year.
The Zacks Consensus Estimate for DRI’s 2023 sales and EPS suggests growth of 7.9% and 5.4%, respectively, from the year-ago period’s reported levels.
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Shake Shack (SHAK) Q4 Earnings & Revenues Beat Estimates
Shake Shack Inc. (SHAK - Free Report) reported fourth-quarter fiscal 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate and improved year over year. The top line beat the Zacks Consensus Estimate for the second straight quarter.
Earnings & Revenue Details
The company’s fourth-quarter loss came in at 6 cents per share, narrower than the Zacks Consensus Estimate of a loss of 11 cents. In the prior-year quarter, the company had reported a loss of 11 cents. Quarterly revenues of $238.5 million beat the Zacks Consensus Estimate of $238 million. The top line increased 17.4% on a year-over-year basis.
Shack sales rose 17.4% to $229.9 million, whereas licensing revenues increased 16.6% to $8.6 million year over year. Shack system-wide sales soared 15.8% year over year to $364.1 million.
Comps Discussion
Same-Shack sales rose 5.1% while average weekly sales came in at $76,000, up from $73,000 in the third-quarter fiscal 2022.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Shake Shack, Inc. price-consensus-eps-surprise-chart | Shake Shack, Inc. Quote
Operating Highlights
Operating loss totaled $6.3 million. Shack-level operating profit margin came in at 18.8% compared with 16.4% in the prior-year quarter.
Total expenses, and food and paper costs (as percentages of company revenues) decreased 60 basis points (bps) and 50 bps, respectively, year over year. Labor and related expenses declined 70 bps year over year to 28.9%.
Adjusted EBITDA for the reported quarter amounted to $19.3 million compared with $12.4 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 200 bps to 8.1%.
Balance Sheet
As of Dec 28, 2022, cash and cash equivalents totaled $230.5 million compared with $302.4 million as of Dec 29, 2021. Total long-term debt at the end of the reported quarter increased to $244.6 million compared with $243.5 million at the end of Dec 29, 2021.
Q1 & 2023 Outlook
For first-quarter fiscal 2023, the company expects total revenues between $240.25 million and $245.75 million. The Zacks Consensus Estimate is pegged at $242 million. Shack sales are anticipated in the range of $232-$237 million. Licensing revenues are projected between $8.25 million and $8.75 million.
For first-quarter fiscal 2023, Shack-Level operating profit is projected in the range of 16-18%. Depreciation expense for 2023 is expected in the range of $86-$91 million.
The company currently has a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks in the Zacks Retail – Restaurants industry are Arcos Dorados Holdings Inc. (ARCO - Free Report) , Yum China Holdings, Inc. (YUMC - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) . While Arcos Dorados sports a Zacks Rank #1 (Strong Buy), Brinker and Darden carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arcos Dorados has a long-term earnings growth of 11.6%. Shares of the company have increased 22.2% in the past year.
The Zacks Consensus Estimate for ARCO’s 2023 sales and EPS suggests growth of 8.1% and 4.2%, respectively, from the year-ago period’s levels.
Yum China carries a Zacks Rank #2. YUMC has a long-term earnings growth rate of 19.5%. The stock has gained 16.3% in the past year.
The Zacks Consensus Estimate for Yum China’s 2023 sales and EPS suggests growth of 21% and 70.5%, respectively, from the year-ago period’s reported levels.
Darden has a long-term earnings growth rate of 9.8%. Shares of DRI have gained 1.2% in the past year.
The Zacks Consensus Estimate for DRI’s 2023 sales and EPS suggests growth of 7.9% and 5.4%, respectively, from the year-ago period’s reported levels.