Shake Shack Analysts Increase Their Forecasts After Upbeat Sales

Shake Shack, Inc. SHAK reported better-than-expected second-quarter results on Thursday.

The company reported adjusted earnings per share of 27 cents, which is in line with the street view. 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.

"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.

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.

Shake Shack shares fell 4% to trade at $98.31 on Friday.

These analysts made changes to their price targets on Shake Shack following earnings announcement.

• Wedbush analyst Nick Setyan maintained Shake Shack with a Neutral and raised the price target from $90 to $100.
• Truist Securities analyst Jake Bartlett maintained the stock with a Buy rating and raised the price target from $125 to $127.

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