Shake Shack jumps on growing international business and a new delivery deal with Grubhub
- Shake Shack traded as much as 3.6% higher in early trading Tuesday after beating earnings estimates, raising its yearly revenue forecast, and announcing a new deal with delivery service Grubhub.
- The Grubhub partnership will first be rolled out to four areas: Morningside Heights in New York, River North in Chicago, Livingston, New Jersey, and Darien, Connecticut.
- The company also announced additional expansion in mainland China, citing strength in its other Asian locations.
- Watch Shake Shack trade live here.
Shake Shack rose as much as 3.6% in early trading Tuesday after beating second-quarter earnings expectations, raising yearly revenue guidance, and announcing a new partnership with delivery company Grubhub.
Here are the key numbers:
Earnings per share: $0.270, versus the $0.227 estimate
Revenue: $152.7 million, versus the $149.5 million estimate
Comparable sales: grew 3.6%, versus the 2.2% growth estimate
2019 revenue guidance: between $585 million and $590 million, versus the $591 million estimate
In its earnings release, the restaurant chain emphasized its growing strength in Shanghai and Hong Kong and plans to continue expansion in mainland China through collaboration with Maxim's Caterers. Shake Shack moved to China in January, the Philippines and Singapore in the second quarter, and Mexico in the fiscal third quarter.
The company also cited its delivery revenue growth as a key source of quarterly income.
The Grubhub deal will include access to "enhanced tools" for both companies to track user trends, log performance data, and offer personalized deals, according to a statement. Use of Grubhub's "Just In Time" technology will allow couriers to follow detailed steps of the order process, bringing faster delivery and increased driver efficiency.
"Shake Shack is experiencing incredible growth," said Randy Garutti, Shake Shack's CEO, in a statement. "Now more than ever, we're doubling down on our commitment to be an accessible, omnichannel business."
The Grubhub partnership will first be rolled out to four areas: Morningside Heights in New York, River North in Chicago, Livingston, New Jersey, and Darien, Connecticut.
The deal follows McDonald's recent move to add DoorDash as its delivery partner and end its exclusive deal with UberEats. The July US jobs report highlighted couriers as the industry with the fastest job creation rate for the month.
Shake Shack's shares last closed at $73.34, up about 66.3% year-to-date.
Shake Shack has five "buy" ratings, seven "hold " ratings, and one "sell" rating from Wall Street analysts, with a price target of $75.70, according to Bloomberg data.
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