Shake Shack Posts Wider Quarterly Loss - Sales Outlook Lags Estimates

Shake Shack reported a wider-than-expected fourth-quarter net loss as revenue rose 22% and same-store sales fell 3.6%.
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Shake Shack  (SHAK) - Get Report, the New York burger chain, reported a wider-than-expected fourth-quarter net loss as revenue rose 22% and same-store sales fell 3.6%.

In addition, the company's full-year 2020 revenue outlook lagged Wall Street's expectations.

Shake Shack reported a loss of 6 cents a share, compared with 3 cents in the year-earlier quarter. On an adjusted basis, Shake Shack earned 6 cents a share in the latest quarter. Shares outstanding rose 15% to 33.9 million from the year-earlier period.

Revenue reached $151.4 million compared with $124.3 million.

Analysts surveyed by FactSet were expecting the company to report a GAAP net loss of a penny a share, or break-even on an adjusted basis, on revenue of $153 million.

The FactSet survey was looking for same-store sales to fall 2.9% in the latest quarter.

Shake Shack said that customer traffic fell 5.4%, offset partly by higher pricing and a more profitable sales mix. Also a factor in the lower same-store sales: A calendar shift cut a high-traffic holiday week from the latest quarter.

Profitability was hurt by factors including higher food and paper costs from its Chick'n Bites offering and higher commodity beef costs and slightly higher dairy costs. An increase in labor expense reflected wage inflation across the U.S. and higher staffing levels.

General and administrative expense in the quarter was 12.7% of revenue compared with 12.2% in the year-earlier quarter.

For 2020, Shake Shack expects revenue to reach a range of $712 million to $720 million. That would mean an increase ranging 20% to 21% from the 2019 figure of $594.5 million.

And the company expects same-store sales to decline in the low-single digits percent.

The FactSet survey was looking for revenue of $735.5 million, with comparable sales increasing 0.7%.

Shake Shack, founded in 2004 in New York, now operates more than 280 outlets in 30 U.S. states, Washington, and several other countries.

At last check, Shake Shack shares were down more than 10%. They finished the regular session on Monday off 1.6% at $73.57.