Why Fast Casual Restaurant Chain Shake Shack Shares Are Shooting Higher Today

Shake Shack Inc SHAK shares are trading higher after the company reported fourth-quarter results FY23.

Sales grew 20% Y/Y to $286.2 million, beating the analyst consensus estimate of $280.3 million.

System-wide sales grew 21.4%, and Same-Shack sales were up 2.8%. The company reported an operating loss of $(1.3) million versus $(6.3) million a year earlier.

Adjusted EBITDA for the quarter was $31.4 million from $19.6 million a year ago, with the margin expanding to 11.0% from 8.2% the prior-year quarter.

Adjusted pro forma EPS was $0.02 for the quarter, beating the consensus estimate of $0.01.

The company opened 15 new domestic company-operated Shacks and 9 new licensed Shacks, including locations in Mexico and Thailand.

The company held $293.2 million in cash and cash equivalents as of December 27, 2023. Operating cash flow for year totaled $132.1 million.

Outlook: For FY24, the company projects revenue of $1.21 billion-$1.25 billion vs. consensus of $1.246 billion and Shack level operating margin of 20%-21%.

For Q1, the company projects revenue of $288.4 million-$292.8 million vs. consensus of $289.8 million and, Shake Shack level operating margin of 19%-19.50%.

The company expects to open 80 new Shacks system-wide, with 40 domestic company-operated and 40 licensed outlets in FY24. 

Also Read: This Analyst Sees Opportunities For Shake Shack’s Significant Store Margin Growth, Bumps Up Price Target

Last month, the company stated that Randy Garutti, its Chief Executive Officer, has informed the Board of his intention to retire in 2024 after the selection of a successor.

Price Action: SHAK shares are up 17.73% at $91.91 premarket on the last check Thursday.

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