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Here's Why You Should Retain SHAK Stock in Your Portfolio Now
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Shake Shack Inc. (SHAK - Free Report) is benefiting from robust same-shack sales, digital initiatives and unit expansion. Also, emphasis on innovative menu offerings, targeted promotions and expanded digital capabilities is driving growth.
The company’s efforts to enhance guest engagement and brand visibility through effective marketing strategies are supporting its performance in a competitive market. However, continued challenges with rising beef costs and general inflation affect cost structures.
Shares of SHAK have gained 74.7% in the past year, significantly outperforming the Zacks Retail - Restaurants industry’s 4.2% growth. SHAK also outpaced the broader Retail-Wholesale sector and the S&P 500 index's 28.5% and 25.1% growth, respectively, during the same period.
Image Source: Zacks Investment Research
Growth Catalysts for SHAK Stock
Shake Shack continues to impress investors with robust global same-shack sales growth. The company has shown strong same-shack sales growth, supported by strategic initiatives and a strong brand presence. In the first nine months of 2024, same-shack sales rose 3.4% year over year, driven by a 4.2% increase in price mix. Its positive traffic trends and momentum in key markets indicate its ability to sustain growth in a challenging macro environment.
The company has been taking strategic steps to manage pricing, address cost pressures and enhance guest engagement. SHAK implemented two pricing strategies earlier this year to manage cost pressures. A digital price adjustment was made to address additional costs in that channel while remaining competitively priced. In March, the company also introduced a 3.5% price increase, including a 7% adjustment in California to address rapid market changes. In late October, the company matched a 1.5% price increase to offset inflationary pressures, particularly in beef and anticipated risks for 2025.
In the first nine months of 2024, digital sales increased 20.4% year over year to $312.6 million. Although the company does not yet have a systematized loyalty program, it is focused on enhancing guest engagement through strategic investments. It plans to develop a digital platform in 2025 to further elevate the customer experience. This initiative indicates the company’s commitment to delivering exceptional hospitality across physical and digital channels.
Shake Shack continues to leverage a range of strategic sales-driving initiatives to enhance customer engagement and drive growth. The company balances culinary innovation with targeted promotions and marketing campaigns to increase brand awareness and drive conversions. These efforts attract both new and repeat guests. Moving forward, the company will continue investing in marketing and product innovation to strengthen its value proposition and drive increased customer attachment.
Shake Shack continues to expand the company’s global footprint, with a strong focus on increasing its presence through company-operated and licensed Shack openings. As Shake Shack accelerates its growth trajectory, it remains committed to enhancing its unit economics while maintaining a high level of operational performance.
The company is on track to open approximately 75 Shacks system-wide this year, representing mid-teens unit growth. SHAK is also targeting a 10% reduction in build costs for 2024, with plans to accelerate new unit openings to 80-85 next year, including 45 company-operated and 35-40 licensed Shacks.
Concerns for SHAK Stock
Shake Shack has been facing inflationary pressures, with rising beef costs and general inflation impacting its cost structure. Also, the costs associated with opening new Shacks are impacting overall expenses. In the first nine months of 2024, food and paper costs increased 11.8% year over year to $251.4 million. The rise in costs was primarily due to the opening of 39 new company-operated Shacks. While the expansion contributed to revenues, the higher costs could put pressure on margins if not offset by proportional revenue growth.
SHAK’s Zacks Rank and Stocks to Consider
Shake Shack currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector have been discussed below.
EAT delivered a trailing four-quarter earnings surprise of 12.1%, on average. The stock has surged 82% in the past six months. The consensus estimate for EAT’s fiscal 2025 sales and EPS indicates growth of 9.3% and 44.2%, respectively, from the year-ago period’s levels.
Sprouts Farmers Market, Inc. (SFM - Free Report) currently sports a Zacks Rank of #2. SFM delivered a trailing four-quarter earnings surprise of 15.3%, on average. The stock has gained 52.3% in the past six months.
The Zacks Consensus Estimate for SFM’s 2025 sales and EPS indicates a rise of 10% and 14.4%, respectively, from the year-ago period’s levels.
Deckers Outdoor Corporation (DECK - Free Report) currently carries a Zacks Rank #2. The stock has gained 30.4% in the past six months.
DECK delivered a trailing four-quarter earnings surprise of 41.1%, on average. The Zacks Consensus Estimate for DECK’s fiscal 2025 sales and EPS indicates growth of 13.6% and 13%, respectively, from the year-ago period’s levels.
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Here's Why You Should Retain SHAK Stock in Your Portfolio Now
Shake Shack Inc. (SHAK - Free Report) is benefiting from robust same-shack sales, digital initiatives and unit expansion. Also, emphasis on innovative menu offerings, targeted promotions and expanded digital capabilities is driving growth.
The company’s efforts to enhance guest engagement and brand visibility through effective marketing strategies are supporting its performance in a competitive market. However, continued challenges with rising beef costs and general inflation affect cost structures.
Shares of SHAK have gained 74.7% in the past year, significantly outperforming the Zacks Retail - Restaurants industry’s 4.2% growth. SHAK also outpaced the broader Retail-Wholesale sector and the S&P 500 index's 28.5% and 25.1% growth, respectively, during the same period.
Image Source: Zacks Investment Research
Growth Catalysts for SHAK Stock
Shake Shack continues to impress investors with robust global same-shack sales growth. The company has shown strong same-shack sales growth, supported by strategic initiatives and a strong brand presence. In the first nine months of 2024, same-shack sales rose 3.4% year over year, driven by a 4.2% increase in price mix. Its positive traffic trends and momentum in key markets indicate its ability to sustain growth in a challenging macro environment.
The company has been taking strategic steps to manage pricing, address cost pressures and enhance guest engagement. SHAK implemented two pricing strategies earlier this year to manage cost pressures. A digital price adjustment was made to address additional costs in that channel while remaining competitively priced. In March, the company also introduced a 3.5% price increase, including a 7% adjustment in California to address rapid market changes. In late October, the company matched a 1.5% price increase to offset inflationary pressures, particularly in beef and anticipated risks for 2025.
In the first nine months of 2024, digital sales increased 20.4% year over year to $312.6 million. Although the company does not yet have a systematized loyalty program, it is focused on enhancing guest engagement through strategic investments. It plans to develop a digital platform in 2025 to further elevate the customer experience. This initiative indicates the company’s commitment to delivering exceptional hospitality across physical and digital channels.
Shake Shack continues to leverage a range of strategic sales-driving initiatives to enhance customer engagement and drive growth. The company balances culinary innovation with targeted promotions and marketing campaigns to increase brand awareness and drive conversions. These efforts attract both new and repeat guests. Moving forward, the company will continue investing in marketing and product innovation to strengthen its value proposition and drive increased customer attachment.
Shake Shack continues to expand the company’s global footprint, with a strong focus on increasing its presence through company-operated and licensed Shack openings. As Shake Shack accelerates its growth trajectory, it remains committed to enhancing its unit economics while maintaining a high level of operational performance.
The company is on track to open approximately 75 Shacks system-wide this year, representing mid-teens unit growth. SHAK is also targeting a 10% reduction in build costs for 2024, with plans to accelerate new unit openings to 80-85 next year, including 45 company-operated and 35-40 licensed Shacks.
Concerns for SHAK Stock
Shake Shack has been facing inflationary pressures, with rising beef costs and general inflation impacting its cost structure. Also, the costs associated with opening new Shacks are impacting overall expenses. In the first nine months of 2024, food and paper costs increased 11.8% year over year to $251.4 million. The rise in costs was primarily due to the opening of 39 new company-operated Shacks. While the expansion contributed to revenues, the higher costs could put pressure on margins if not offset by proportional revenue growth.
SHAK’s Zacks Rank and Stocks to Consider
Shake Shack currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector have been discussed below.
Brinker International, Inc. (EAT - Free Report) presently flaunts a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
EAT delivered a trailing four-quarter earnings surprise of 12.1%, on average. The stock has surged 82% in the past six months. The consensus estimate for EAT’s fiscal 2025 sales and EPS indicates growth of 9.3% and 44.2%, respectively, from the year-ago period’s levels.
Sprouts Farmers Market, Inc. (SFM - Free Report) currently sports a Zacks Rank of #2. SFM delivered a trailing four-quarter earnings surprise of 15.3%, on average. The stock has gained 52.3% in the past six months.
The Zacks Consensus Estimate for SFM’s 2025 sales and EPS indicates a rise of 10% and 14.4%, respectively, from the year-ago period’s levels.
Deckers Outdoor Corporation (DECK - Free Report) currently carries a Zacks Rank #2. The stock has gained 30.4% in the past six months.
DECK delivered a trailing four-quarter earnings surprise of 41.1%, on average. The Zacks Consensus Estimate for DECK’s fiscal 2025 sales and EPS indicates growth of 13.6% and 13%, respectively, from the year-ago period’s levels.