Operations

Shake Shack posts mixed 3Q results

Provided

November 4, 2021

Shake Shack reported lukewarm Q3 results, according to a company press release.

Although its total revenue grew 48.7% year-over-year to $193.9 million, falling short of the $197.5 million that analysts had predicted, it beat expectations when it came to loss of shares. The chain, for example saw a loss of $2.2 million, or 6 cents a share, compared with a loss of $5.6 million, or 15 cents per share in the year-earlier quarter. On an adjusted basis, the chain lost 5 cents per share, versus adjusted earnings per share of 11 cents the year prior.

Analysts had forecasted a loss of 6 cents per share.

"This quarter marks our highest revenue quarter ever, with total revenues of $193.9 million and system-wide sales of $298.6 million," CEO Randy Garutti said in a company press release about the quarter ending Sept. 29. "We saw benefits to our urban Shacks as more of our guests returned to offices, events, commuting and tourism-based locations. Our suburban Shacks continue to recover and, on average, perform above 2019 levels."

As of fiscal September, the chain had retained nearly 80% of its digital channel sales, compared to fiscal January 2021.

"Sales strength aside, we are not immune to the margin pressures that are still being felt across our industry," Garutti said. "Inflation in commodity prices and investments across team members are pressuring our margins. We remain committed to investing in our team members to ensure we are retaining and developing the best talent in our industry, and these pressures are likely to persist for the foreseeable future. Our team is working harder than ever to take care of each other, bring hospitality to our neighborhoods, transform our Shack formats, invest in critical digital infrastructure, and uplift everyone in the Shack community along the way."

3Q highlights

• Total revenue in the third quarter of 2021 increased 48.7% to $193.9 million.
• Shack sales in the third quarter of 2021 increased 48.1% to $187 million.
• Same-Shack sales improved, up 24.8%.
• Licensed revenue in the third quarter of 2021 increased 68.3% to $6.9 million.
• Shack system-wide sales increased 53.1% to $298.6 million.
• Operating loss was $2.6 million compared to an operating loss of $6.8 million in the same period last year.
• Shack-level operating profit increased 58.6% to $29.6 million, or 15.8% of Shack sales.
• Net loss was $2.4 million and adjusted EBITDA was $15.8 million, compared to a Net loss of $6.1 million and adjusted EBITDA of $8.2 million in the same period last year.
• Opened five domestic company-operated Shacks and six licensed Shacks.

Since the original Shake Shack opened in 2004 in NYC's Madison Square Park, the company has expanded to over 300 locations in 32 U.S. states and the District of Columbia. It also has over 100 units in London, Hong Kong, Istanbul, Dubai, Philippines, Singapore, Mexico, Tokyo and Seoul.