Shake Shack (SHAK) - Get Report shares fell Friday after the company announced it would furlough or lay off 1,000 employees in response to the impact the coronavirus pandemic was having on its business.
Shake Shack also announced that its corporate office and executive teams will have their pay reduced for an indefinite period.
The company said it has temporarily closed 17 restaurants.
Shake Shack also announced preliminary first-quarter results, saying it expects sales of $143 million, up from $132.6 million a year ago but short of analysts' consensus estimate of $147.4 million.
Shake Shack said that performance in January and February was in line with internal expectations, but March saw "an immediate and acute impact from Covid, leading to a (sales) decrease of 28.5% year over year."
The company said it has seen strong sequential sales growth on a weekly basis since the last week in March while the fast food restaurant chain has updated its "digital tool box" and increased engagement and messaging.
The company also provided a liquidity update, announcing that it has $112 million in cash on hand as of April 16. Shake Shack received a $10 million loan under the Paycheck Protection Program through J.P. Morgan on April 10.
Based on current sales levels and cost reductions, Shake Shack's current cash burn rate is expected to be between $1.3 million and $1.5 million per week, including about $800,000 a week in cash rent payments, the company said.
Shake Shack is expected to report break-even earnings when it reports on May 4.
The stock fell 4.05% on Friday to $41.25.