What started as a tiny hot dog cart in New York City back in 2001 is now a full-fledged burger-carrying locomotive headed out west.
Shake Shack (SHAK) - Get Report , which has 49 U.S. locations mostly in the Northeast that churn out juicy burgers and indulgent frozen custards, opened its first location in Arizona on Friday, which is as far west as it's gone so far save for Nevada, where it has two locations.
Decked out with a foosball table, fire pit, reclaimed wood on the wall and rows of outdoor benches, the 5,000 square foot Shake Shack in Scottsdale, Arizona was met with the typical reception when the burger brand enters a new community -- throngs of people lined up to see if the food is as good as the hype.
"The first hour open at the store has been madness, every seat taken -- probably 70 people on the line," Shake Shack's CEO Randy Garutti told TheStreet. "Shake Shack is not some fad here -- we have the opportunity to be the next generation burger joint -- each time we go somewhere we continue to foster that."
In addition to the usual menu of hormone-free burgers and crinkle-cut fries, the Scottsdale Shake Shack features two frozen custards inspired by local recipes. And the chain is not yet done expanding into Arizona, planning to open two more burger joints later this year in Phoenix.
Next stop? California.
The better burger juggernaut will debut its first West Coast location in West Hollywood, Calif. this spring, with another site opening in Glendale, Calif. in the fall. In 2017, the Shack arrives in Downtown LA.
Said Garutti on the importance on finally reaching the Golden State, "California is incredibly important -- some of the greatest burger joints of our country are in California -- it's such a burger culture, it's such a drive-in culture, with that old roadside burger stand that Shake Shack is modeled after -- so much of that history is on the west coast."
Shake Shack is following in some huge footsteps in expanding to California. Dick and Mac McDonald opened the first McDonald's (MCD) - Get Report in San Bernardino, CA. in 1940, while In-N-Out Burger was founded eight years later in 1948 in Baldwin Park, California.Some other notable burger chains founded in California include Carl's Jr., Bob's Big Boy, and more recently, better burger chains such as Habit Burger and Grill (HABT) - Get Report , Umami Burger, The Counter, and Fat Burger.
In total, Shake Shack says it will open at least 14 new company-operated stores this year, as well as eight international spots in the U.K., Japan and the Middle East under license agreements. The warm welcome of Shake Shack in new markets is a good sign on the long-term promise of the brand. Shake Shack continues to have a goal of operating at least 450 U.S. locations over time.
More immediately, packed houses at its newest restaurants could lead to better-than-expected sales -- and profits -- for Shake Shack in 2016. And achieving that may help to revive Shake Shack's stock. Shares of Shake Shack have fallen roughly 11% in the past year, worse than the S&P 500's 8% dive as investors may be fearing a wave of selling by insiders following the chain's successful IPO last year.
The company projects total revenue between $237 million to $242 million this year, which would represent about a 26% year over year increase. Execs have not divulged earnings guidance.
Shake Shack's first chicken sandwich has been a top-seller.
In addition to its eclectic design, Shake Shack's Scottsdale location had another distinguishing characteristic -- it was the first to open serving chicken.
On Jan. 14, Shake Shack took its popular ChickenShack sandwich from a few test spots in New York City nationwide.
Garutti, who admitted that he ate two ChickenShack sandwiches for breakfast on Friday, seemed pleased with the roll-out so far."Chicken is incredibly important to our future, it's really exciting, and mostly offers a great balance to our protein risk moving forward," Garutti said.