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Shake Shack Inc. (SHAK - Free Report) reported first-quarter fiscal 2023 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate and improved year over year. The top line beat the consensus estimate for the third straight quarter. Following the results, the stock increased 16.6% on May 4.
Earnings & Revenue Details
The company’s first-quarter adjusted loss was 1 cent per share, narrower than the Zacks Consensus Estimate of a loss of 9 cents. In the prior-year quarter, SHAK incurred a loss of 19 cents.
Quarterly revenues of $253.3 million beat the Zacks Consensus Estimate of $246 million. The top line increased 24.5% on a year-over-year basis.
Shack sales rose 24.1% year over year to $244.3 million. Licensing revenues increased 36.7% to $9 million year over year. Shack system-wide sales soared 27.5% year over year to $394.7 million.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Same-shack sales improved 10.3% while average weekly sales were $73,000, up 7% year over year. Operating Highlights
Operating loss totaled $3.2 million compared with a loss of $14.9 million reported in the prior-year quarter. Shack-level operating profit margin was 18.3% compared with 15.2% in the year-ago quarter.
Total expenses, and food and paper costs (as percentages of company revenues) decreased 600 basis points (bps) and 100 bps, respectively, year over year. Labor and related expenses declined 30 bps year over year to 30.4%.
Adjusted EBITDA for the reported quarter amounted to $27.6 million compared with $10.4 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 580 bps to 10.9%.
Balance Sheet
As of Mar 29, cash and cash equivalents totaled $293.4 million compared with $230.5 million as of Dec 28, 2022. Total long-term debt at the end of the reported quarter increased to $244.9 million compared with $244.6 million as of Dec 28, 2022.
Q2 & 2023 Outlook
For second-quarter fiscal 2023, the company expects total revenues to be between $269.5 million and $274.8 million. The Zacks Consensus Estimate is pegged at $277.8 million.
Licensing revenues are projected in the range of $9.5-$9.8 million. Shak expects to open nearly 10 new Shacks (both company-operated and licensed partners). In second-quarter, same-shack sales are expected to grow by low-to-mid single digits year over year.
For fiscal 2023, management expects revenues in the range of $1.06-$1.11 billion, suggesting an 18-23% year-over-year increase. Licensing revenues are expected to be between $39 million and $41 million.
In fiscal 2023, Shake Shack expects to add 70-75 units of system-wide Shack. Despite inflationary pressure, it anticipates delivering 150-250 basis points of restaurant margin expansion. Shack-level operating profit margins are projected to reach 19-20% in fiscal 2023.
Arcos Dorados has a long-term earnings growth rate of 7.2%. The stock has gained 6.9% in the past year.
The Zacks Consensus Estimate for ARCO’s 2024 sales suggests growth of 13.4% from the year-ago period’s levels.
Chipotle has a long-term earnings growth rate of 31.8%. The stock has improved 41.9% in the past year.
The Zacks Consensus Estimate for CMG’s 2024 sales and EPS suggests increases of 13.8% and 32.3%, respectively, from the year-ago period’s levels. Chuy’s Holdings has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have increased 40.2% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests rises of 10.8% and 19%, respectively, from the year-ago period’s levels.
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Shake Shack (SHAK) Stock Surges on Q1 Earnings & Revenue Beat
Shake Shack Inc. (SHAK - Free Report) reported first-quarter fiscal 2023 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate and improved year over year. The top line beat the consensus estimate for the third straight quarter. Following the results, the stock increased 16.6% on May 4.
Earnings & Revenue Details
The company’s first-quarter adjusted loss was 1 cent per share, narrower than the Zacks Consensus Estimate of a loss of 9 cents. In the prior-year quarter, SHAK incurred a loss of 19 cents.
Quarterly revenues of $253.3 million beat the Zacks Consensus Estimate of $246 million. The top line increased 24.5% on a year-over-year basis.
Shack sales rose 24.1% year over year to $244.3 million. Licensing revenues increased 36.7% to $9 million year over year. Shack system-wide sales soared 27.5% year over year to $394.7 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 improved 10.3% while average weekly sales were $73,000, up 7% year over year.
Operating Highlights
Operating loss totaled $3.2 million compared with a loss of $14.9 million reported in the prior-year quarter. Shack-level operating profit margin was 18.3% compared with 15.2% in the year-ago quarter.
Total expenses, and food and paper costs (as percentages of company revenues) decreased 600 basis points (bps) and 100 bps, respectively, year over year. Labor and related expenses declined 30 bps year over year to 30.4%.
Adjusted EBITDA for the reported quarter amounted to $27.6 million compared with $10.4 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 580 bps to 10.9%.
Balance Sheet
As of Mar 29, cash and cash equivalents totaled $293.4 million compared with $230.5 million as of Dec 28, 2022. Total long-term debt at the end of the reported quarter increased to $244.9 million compared with $244.6 million as of Dec 28, 2022.
Q2 & 2023 Outlook
For second-quarter fiscal 2023, the company expects total revenues to be between $269.5 million and $274.8 million. The Zacks Consensus Estimate is pegged at $277.8 million.
Licensing revenues are projected in the range of $9.5-$9.8 million. Shak expects to open nearly 10 new Shacks (both company-operated and licensed partners). In second-quarter, same-shack sales are expected to grow by low-to-mid single digits year over year.
For fiscal 2023, management expects revenues in the range of $1.06-$1.11 billion, suggesting an 18-23% year-over-year increase. Licensing revenues are expected to be between $39 million and $41 million.
In fiscal 2023, Shake Shack expects to add 70-75 units of system-wide Shack. Despite inflationary pressure, it anticipates delivering 150-250 basis points of restaurant margin expansion. Shack-level operating profit margins are projected to reach 19-20% in fiscal 2023.
The company currently has a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other top-ranked stocks in the Zacks Retail-Wholesale sector are Arcos Dorados Holdings Inc. (ARCO - Free Report) , Chipotle Mexican Grill, Inc. (CMG - Free Report) and Chuy's Holdings, Inc. (CHUY - Free Report) . While Arcos Dorados and Chipotle currently sport a Zacks Rank #1 (Strong Buy), Chuy’s Holdings carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arcos Dorados has a long-term earnings growth rate of 7.2%. The stock has gained 6.9% in the past year.
The Zacks Consensus Estimate for ARCO’s 2024 sales suggests growth of 13.4% from the year-ago period’s levels.
Chipotle has a long-term earnings growth rate of 31.8%. The stock has improved 41.9% in the past year.
The Zacks Consensus Estimate for CMG’s 2024 sales and EPS suggests increases of 13.8% and 32.3%, respectively, from the year-ago period’s levels.
Chuy’s Holdings has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have increased 40.2% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests rises of 10.8% and 19%, respectively, from the year-ago period’s levels.