Shake Shack, Inc. SHAK shares are trading higher after reporting second-quarter results.
The company reported adjusted earnings per share of 27 cents, which is in line with the street view.
Quarterly sales of $316.50 million (+16.4%) topped the analyst consensus of $314.20 million.
System-wide sales reached $483.7 million, marking a 13.5% increase compared to 2023. Same-Shack sales grew by 4.0% year-over-year. Operating income rose to $10.8 million, up from $4.7 million in the year-ago period.
Restaurant-level profit was $67.1 million, representing 22.0% of Shack sales. The restaurant-level profit margin was 22.0%, 100 bps higher than last year and the highest quarterly result since 2019.
Net income increased to $10.4 million, compared to $7.2 million the previous year.
Adjusted EBITDA surged by 27.4% to $47.2 million in the quarter year over year.
Wedbush analyst Nick Setyan reiterates Shake Shack with a Neutral and a $90 price target.
The company opened twelve new company-operated Shacks, including three drive-thrus. It also opened eleven new licensed Shacks.
Shake Shack exited the quarter with cash and equivalents worth $304.4 million. Inventories as of quarter end totaled $5.194 million.
“We remain on track to meet our financial targets for FY2024, including growing Total revenue by 14% – 15% and Adjusted EBITDA by more than 25% year-overyear, as well as expanding Restaurant-level profit margins by 70 – 110 bps,” said Chief Financial Officer, Katie Fogertey.
“With these drivers and lowering both pre-opening expense per Shack by at least 10% per Shack and our total cost to build by approximately 10% year-over-year, we expect to achieve positive free cash flow for FY2024– a first since 2017,” Fogertey added.
Outlook: Shake Shack currently expects FY24 revenues of $1.24 billion-$1.25 billion versus $1.249 billion estimate.
Revenues are expected to be between $311.6 million and $317.0 million in the third quarter, compared to the $315.89 million estimate.
Price Action: SHAK shares are trading higher by 18.7% to $104.00 at last check Thursday.
Photo Via Wikimedia Commons
Read Next:
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
