Shake Shack Up as 4th-Period Revenue Estimate Tops Expectations

Shake Shack's fourth-quarter revenue estimate beats Wall Street expectations despite 'a challenging operating environment' due to the pandemic.
Author:
Publish date:

Shake Shack  (SHAK) - Get Report shares were higher Tuesday after the burger chain's fourth-quarter sales forecast beat Wall Street's expectations.

Shares of the New York company at last check were 2.2% higher at $92.88.

Shake Shack said preliminary total fourth-quarter revenue came to $157.5 million, up 4% from a year earlier and beating the FactSet consensus of $153.2 million. 

The results improved sequentially, over a decline of 17% in the third quarter. 

The increase also reflects the favorable impact of the 53rd week in the fourth quarter, which resulted in incremental sales of $10.7 million.

Same-store sales fell 17.4% in the quarter but still topped the FactSet call for a 19.5% slide. 

Same-Shack sales at suburban locations were roughly flat in the fourth quarter compared with a year earlier, "despite what remains a challenging operating environment" due to the coronavirus pandemic, Chief Executive Randy Garutti said in a statement. 

The company plans to open a total of 35 to 40 domestic company-operated stores in 2021, Garutti said, with timing more toward the back half of the year due to covid-related volatility. Shake Shack is also looking to open 45 to 50 new domestic company-operated outlets next year. 

The openings are expected to incorporate a version of the Shack Track digital preordering and pickup capability, Garutti said. And the company also plans to build its first drive-through Shake Shack later this year.

Garutti said Shake Shack recently launched curbside pickup and has begun testing delivery through its Shack app at several locations in the Miami area to support a broader rollout in 2021.

"We believe these digital investments to be a critical differentiator for our business, creating the opportunity to drive greater engagement and frequency with both new and existing guests," Garutti said.

Earlier this month, Shake Shack said that it was introducing its Korean-Style Fried Chick'n and Korean Gochujang Chick'n Bites - Fries at all U.S. locations.