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Shake Shack Q3 Earnings & Revenues Beat Estimates, Stock Up
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Shake Shack Inc. (SHAK - Free Report) posted third-quarter fiscal 2024 results, wherein both earnings and revenues beat their respective Zacks Consensus Estimate. The top and bottom lines also increased on a year-over-year basis. Following the results, the company’s shares moved up 10% during today’s pre-market trading session.
In the quarter, the company ramped up its investment in marketing strategies and programs aimed at increasing guest engagement and brand awareness, even amid a challenging market environment. These efforts have paid off, as the company has achieved some of the highest brand awareness levels on record, which, in turn, is fueling robust sales and profitability growth.
SHAK’s Earnings & Revenue Details
SHAK’s fiscal third-quarter adjusted earnings per share (EPS) came in at 25 cents, which beat the Zacks Consensus Estimate of 20 cents. In the prior-year quarter, the company reported adjusted EPS of 17 cents.
Quarterly revenues of $316.9 million beat the consensus mark of $315 million. The top line increased 14.7% on a year-over-year basis.
Same-Shack sales increased 4.4% year over year compared with 4% growth in the previous quarter. Our estimate for the metric was 2%.
Shack sales rose 15.1% year over year to $304.9 million. We expected the metric to be $302.6 million.
Licensing revenues increased 7.1% year over year to $12 million. We anticipated the metric to be $11.9 million. Shack system-wide sales rose 12.8% year over year to $495.1 million.
Shake Shack, Inc. Price, Consensus and EPS Surprise
In the quarter, operating loss came in at $18 million against a gain of $5.7 million reported in the prior-year quarter. Restaurant-level profit margin was 21%, up 60 basis points (bps) year over year.
In the fiscal third quarter, food and paper costs (as percentages of company revenues) contracted 90 bps year over year to 28.2%. Labor and related costs (as percentages of company revenues) contracted 80 bps year over year to 28%.
Total expenses in the quarter came in at $334.9 million compared with $270.6 million reported in the prior-year quarter. Our estimate for the metric was $306.5 million.
Adjusted EBITDA in the reported quarter amounted to $45.8 million compared with $35.8 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 140 bps year over year to 14.4%.
Balance Sheet of SHAK
As of Sept. 25, 2024, cash and cash equivalents totaled $310.9 million compared with $224.7 million as of Dec. 27, 2023. Total long-term debt at the end of the fiscal third quarter came in at $246.4 million from $245.6 million as of Dec. 27, 2023.
SHAK’s Q4 & Fiscal 2024 Outlook
For fourth-quarter fiscal 2024, the company expects total revenues to be between $322.6 million and $327 million. Licensing revenues are projected in the range of $11.6-$12 million. The company anticipates fiscal fourth quarter Restaurant-level profit margin to be nearly 22%.
For the fiscal 2024, the company expects revenues to be $1.25 billion. Licensing revenues are projected in the range of $44.6-$45 million compared with the previous expectation of $44-$45 million. Restaurant-level profit margins are projected to reach 21% compared with the previous projection of 20.6-21%. The company expects Adjusted EBITDA in the range of $168-$170 million.
The company expects approximately 45 company-operated openings in the fiscal 2024. It also anticipates approximately 35-40 licensed Shack openings at the same time.
Zacks Rank of SHAK
Shake Shack currently carries a Zacks Rank #2 (Buy).
CAVA has a trailing four-quarter earnings surprise of 257.7%, on average. The stock has surged 336.8% in the past year. The Zacks Consensus Estimate for CAVA’s 2024 sales and EPS indicates a rise of 29.1% and 104.8%, respectively, from the year-ago period’s levels.
Boot Barn Holdings, Inc. (BOOT - Free Report) sports a Zacks Rank of 1. BOOT has a trailing four-quarter earnings surprise of 6.8%, on average. The stock has risen 86.2% in the past year.
The consensus estimate for BOOT’s fiscal 2025 sales and EPS indicates growth of 12.1% and 10.9%, respectively, from the year-ago period’s levels.
ANF has a trailing four-quarter earnings surprise of 28%, on average. The stock has surged 127.7% in the past year. The Zacks Consensus Estimate for ANF’s fiscal 2024 sales and EPS indicates growth of 13% and 63.4%, respectively, from the year-ago period’s levels.
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Shake Shack Q3 Earnings & Revenues Beat Estimates, Stock Up
Shake Shack Inc. (SHAK - Free Report) posted third-quarter fiscal 2024 results, wherein both earnings and revenues beat their respective Zacks Consensus Estimate. The top and bottom lines also increased on a year-over-year basis. Following the results, the company’s shares moved up 10% during today’s pre-market trading session.
In the quarter, the company ramped up its investment in marketing strategies and programs aimed at increasing guest engagement and brand awareness, even amid a challenging market environment. These efforts have paid off, as the company has achieved some of the highest brand awareness levels on record, which, in turn, is fueling robust sales and profitability growth.
SHAK’s Earnings & Revenue Details
SHAK’s fiscal third-quarter adjusted earnings per share (EPS) came in at 25 cents, which beat the Zacks Consensus Estimate of 20 cents. In the prior-year quarter, the company reported adjusted EPS of 17 cents.
Quarterly revenues of $316.9 million beat the consensus mark of $315 million. The top line increased 14.7% on a year-over-year basis.
Same-Shack sales increased 4.4% year over year compared with 4% growth in the previous quarter. Our estimate for the metric was 2%.
Shack sales rose 15.1% year over year to $304.9 million. We expected the metric to be $302.6 million.
Licensing revenues increased 7.1% year over year to $12 million. We anticipated the metric to be $11.9 million. Shack system-wide sales rose 12.8% year over year to $495.1 million.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Shake Shack, Inc. price-consensus-eps-surprise-chart | Shake Shack, Inc. Quote
Operating Highlights of SHAK
In the quarter, operating loss came in at $18 million against a gain of $5.7 million reported in the prior-year quarter. Restaurant-level profit margin was 21%, up 60 basis points (bps) year over year.
In the fiscal third quarter, food and paper costs (as percentages of company revenues) contracted 90 bps year over year to 28.2%. Labor and related costs (as percentages of company revenues) contracted 80 bps year over year to 28%.
Total expenses in the quarter came in at $334.9 million compared with $270.6 million reported in the prior-year quarter. Our estimate for the metric was $306.5 million.
Adjusted EBITDA in the reported quarter amounted to $45.8 million compared with $35.8 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 140 bps year over year to 14.4%.
Balance Sheet of SHAK
As of Sept. 25, 2024, cash and cash equivalents totaled $310.9 million compared with $224.7 million as of Dec. 27, 2023. Total long-term debt at the end of the fiscal third quarter came in at $246.4 million from $245.6 million as of Dec. 27, 2023.
SHAK’s Q4 & Fiscal 2024 Outlook
For fourth-quarter fiscal 2024, the company expects total revenues to be between $322.6 million and $327 million. Licensing revenues are projected in the range of $11.6-$12 million. The company anticipates fiscal fourth quarter Restaurant-level profit margin to be nearly 22%.
For the fiscal 2024, the company expects revenues to be $1.25 billion. Licensing revenues are projected in the range of $44.6-$45 million compared with the previous expectation of $44-$45 million. Restaurant-level profit margins are projected to reach 21% compared with the previous projection of 20.6-21%. The company expects Adjusted EBITDA in the range of $168-$170 million.
The company expects approximately 45 company-operated openings in the fiscal 2024. It also anticipates approximately 35-40 licensed Shack openings at the same time.
Zacks Rank of SHAK
Shake Shack currently carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other top-ranked stocks in the Zacks Retail – Restaurants industry are:
CAVA Group, Inc. (CAVA - Free Report) sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CAVA has a trailing four-quarter earnings surprise of 257.7%, on average. The stock has surged 336.8% in the past year. The Zacks Consensus Estimate for CAVA’s 2024 sales and EPS indicates a rise of 29.1% and 104.8%, respectively, from the year-ago period’s levels.
Boot Barn Holdings, Inc. (BOOT - Free Report) sports a Zacks Rank of 1. BOOT has a trailing four-quarter earnings surprise of 6.8%, on average. The stock has risen 86.2% in the past year.
The consensus estimate for BOOT’s fiscal 2025 sales and EPS indicates growth of 12.1% and 10.9%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) presently carries a Zacks Rank #2.
ANF has a trailing four-quarter earnings surprise of 28%, on average. The stock has surged 127.7% in the past year. The Zacks Consensus Estimate for ANF’s fiscal 2024 sales and EPS indicates growth of 13% and 63.4%, respectively, from the year-ago period’s levels.