Shake Shack smashes earnings expectations, shares surge 8%
The fast-food chain got a boost from the launch of its Chick'n Shack burger, according to CEO Randy Garutti in the earnings statement.
The company reported adjusted earnings per share of $0.08. Its revenues rose 43% from the same quarter a year ago to $54.2 million.
Analysts had estimated adjusted earnings per share of $0.05 and revenues totaling $52.2 million, according to Bloomberg. Coming into Thursday's earnings, the company had topped analysts' forecasts for profits in all of the prior five quarters.
The Chick'n Shack was developed over two years and piloted last summer at Shake Shack restaurants in Brooklyn before launching nationwide in January. It was considered a direct competitor to Chick-fil-A, the stalwart of chicken sandwiches.
So-called same-Shack sales - at stores open for at least one year - also crushed expectations, rising 9.9% (5.3% expected.)
Analysts had been looking out for the pace of expansion outside Manhattan. Shake Shack launched three US locations during the quarter - two in Arizona and one in California. It opened an internationally-licensed location in Oman. Three more international restaurants opened after the quarter ended.
Shake Shack raised its expectations for sales this year. It now sees revenues in a range of $245 million to $249 million, versus $237 million to $242 million earlier projected. Same-store sales are expected to rise by between 4% to 5%, up from the range of 2.5% to 3% earlier announced.
The company's shares had fallen 25% from the January 2015 IPO through Thursday's market close.
