What happened
Shares of Shake Shack (SHAK +2.37%) were moving higher today after the fast-casual burger slinger posted better-than-expected results in its first-quarter earnings report. As of 3:10 p.m. ET on Thursday, the stock was up 15%.
NYSE: SHAK
Key Data Points
So what
Trending with other restaurant stocks that posted strong first-quarter results, Shake Shack reported 10.3% same-store sales growth. That drove a 27.5% increase in systemwide sales (which includes sales from licensed restaurants) to $394.7 million, and a 24.5% jump in revenue (company-owned restaurants plus fees from licensed restaurants) to $253.3 million, which topped estimates at $245.7 million.
Restaurant-level operating profit was $44.7 million, or 18.3% of company-owned store sales, up from 15.2% in the quarter a year ago.
The company continues to expand its footprint, openings six new domestic company-operated Shacks in the quarter, including a drive-thru, and seven licensed restaurants.
On the bottom line, Shake Shack reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $27.6 million, and it finished the quarter with an adjusted loss per share of $0.01, which was an improvement from a per-share loss of $0.19 in the year-ago quarter, and better than estimates for a loss of $0.08.
Chief financial officer Katie Fogertey said, "We continue to focus on key initiatives to further improve our Shack-level profitability and gain greater efficiency while still taking a disciplined approach to investments and supporting our Team Members as we ensure the long-term sustainable growth of the company."
Shake Shack's profitability had a setback during the pandemic, but it appears to be recovering now.
Now what
The company forecast same-store sales growth in the low to mid single digits for both the second quarter and the full year.
For the full year, it called for revenue of $1.06 billion to $1.11 billion, or 20.5% growth at the midpoint, which is level with the analyst consensus. On the bottom line, it sees full-year adjusted EBITDA of $110 million to $125 million.
The stock now trades at less than 25 times that EBITDA forecast, and profitability is expected to improve. Considering its growth potential, Shake Shack could finally deliver the performance investors have long awaited.
