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Shake Shack (SHAK) Stock Down Despite Q4 Earnings Beat
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Shake Shack Inc. (SHAK - Free Report) reported fourth-quarter fiscal 2021 results, wherein earnings and revenues not only beat the Zacks Consensus Estimate but also improved year over year.
Despite reporting earnings and revenues beat, the company’s shares declined 11.4% in the after-hours trading session on Feb 17. Investor sentiment was hurt by the following announcement — “Given the substantial uncertainty and resulting material economic impact caused by the COVID-19 pandemic, the Company is not providing full guidance for the fiscal year ending December 28, 2022.”
Earnings & Revenue Details
During the fiscal fourth quarter, adjusted loss was 11 cents per share, narrower than the Zacks Consensus Estimate of a loss of 17 cents. In the prior-year quarter, adjusted loss was 3 cents. Quarterly revenues of $203.3 million marginally beat the Zacks Consensus Estimate of $203 million. The top line improved 29% on a year-over-year basis.
Sack sales during the quarter rose 28.5% to $195.9 million, while licensed revenues increased 46.8% to $7.4 million year over year. Shack system-wide sales in fourth-quarter fiscal 2021 surged 31.9% year over year to $314.3 million.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Same-Shack sales rose 20.8% in fourth-quarter 2021, primarily driven by the opening of 36 net new domestic company-operated Shacks in 2021, as well as constant sales recovery across hardest-hit markets like New York City, which witnessed same-Shack sales improvement of 39% in the quarter under review. Bot Urban and Suburban Shacks saw improvement compared to 2019 in the fourth quarter of 2021.
During fourth-quarter 2021, total digital sales, including orders placed on the Shake Shack app, website and third-party delivery platforms, represented nearly 42% of Shack sales.
During the fourth quarter of fiscal 2021, its average weekly sales were $74,000, up from $72,000 in third-quarter 2021.
Operating Highlights
During the fourth quarter, the company’s operating loss totaled $6.5 million, compared with an operating loss of $12.2 million in the prior-year quarter. Shack-level adjusted operating profit increased 66.9% year over year to $119.2 million in fourth-quarter 2021.
Total expenses (as a percentage of company revenues) decreased 460 basis points (bps) year over year. Food and paper costs (as a percentage of company revenues) increased by 90 bps year over year. Labor and related expenses rose 70 bps year over year to 29.6%.
Adjusted EBITDA for the reported quarter amounted to $12.4 million compared with $9.2 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 30 bps to 6.1%.
Balance Sheet
As of Dec 29, 2021, cash and cash equivalent totaled $302.4 million compared with $146.9 million as of Dec 30, 2020. Total liabilities at the end of the quarter increased to $1,022 million, compared with $710.9 million at the end of Dec 30, 2020.
Q1 & 2022 Outlook
For first-quarter 2022, the company expects total revenues between $196 million and $201.4 million. Shack sales are anticipated in the range of $190 million to $195 million. The company’s licensed revenue expectation is expected between $6 million and $6.4 million for first-quarter 2022.
For first-quarter 2022, the company’s Same-Shack Sales are expected to increase high-single digits to low-double digits. Meanwhile, Shack-Level operating profit is projected in the range of 11-14%.
For 2022, the company anticipates opening 40 to 45 shacks. Total General and administrative expenses for 2022 are anticipated between $108 million and $114 million. Depreciation expenses for 2022 are expected in the range of $70 million to $75 million.
MarineMax sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 55.8%, on average. Shares of HZO have increased 4.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MarineMax’s 2022 sales and EPS suggests growth of 13.9% and 16.2%, respectively, from the year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 42.9%. Shares of the company have surged 28.7% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 10.4% and 255.6%, respectively, from the year-ago period’s levels.
Tapestry carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 29%, on average. Shares of the company have increased 6.1% in the past year.
The Zacks Consensus Estimate for Tapestry’s 2022 sales and EPS suggests growth of 15% and 18.5%, respectively, from the year-ago period’s levels.
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Shake Shack (SHAK) Stock Down Despite Q4 Earnings Beat
Shake Shack Inc. (SHAK - Free Report) reported fourth-quarter fiscal 2021 results, wherein earnings and revenues not only beat the Zacks Consensus Estimate but also improved year over year.
Despite reporting earnings and revenues beat, the company’s shares declined 11.4% in the after-hours trading session on Feb 17. Investor sentiment was hurt by the following announcement — “Given the substantial uncertainty and resulting material economic impact caused by the COVID-19 pandemic, the Company is not providing full guidance for the fiscal year ending December 28, 2022.”
Earnings & Revenue Details
During the fiscal fourth quarter, adjusted loss was 11 cents per share, narrower than the Zacks Consensus Estimate of a loss of 17 cents. In the prior-year quarter, adjusted loss was 3 cents. Quarterly revenues of $203.3 million marginally beat the Zacks Consensus Estimate of $203 million. The top line improved 29% on a year-over-year basis.
Sack sales during the quarter rose 28.5% to $195.9 million, while licensed revenues increased 46.8% to $7.4 million year over year. Shack system-wide sales in fourth-quarter fiscal 2021 surged 31.9% year over year to $314.3 million.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Shake Shack, Inc. price-consensus-eps-surprise-chart | Shake Shack, Inc. Quote
Comps Discussion
Same-Shack sales rose 20.8% in fourth-quarter 2021, primarily driven by the opening of 36 net new domestic company-operated Shacks in 2021, as well as constant sales recovery across hardest-hit markets like New York City, which witnessed same-Shack sales improvement of 39% in the quarter under review. Bot Urban and Suburban Shacks saw improvement compared to 2019 in the fourth quarter of 2021.
During fourth-quarter 2021, total digital sales, including orders placed on the Shake Shack app, website and third-party delivery platforms, represented nearly 42% of Shack sales.
During the fourth quarter of fiscal 2021, its average weekly sales were $74,000, up from $72,000 in third-quarter 2021.
Operating Highlights
During the fourth quarter, the company’s operating loss totaled $6.5 million, compared with an operating loss of $12.2 million in the prior-year quarter. Shack-level adjusted operating profit increased 66.9% year over year to $119.2 million in fourth-quarter 2021.
Total expenses (as a percentage of company revenues) decreased 460 basis points (bps) year over year. Food and paper costs (as a percentage of company revenues) increased by 90 bps year over year. Labor and related expenses rose 70 bps year over year to 29.6%.
Adjusted EBITDA for the reported quarter amounted to $12.4 million compared with $9.2 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 30 bps to 6.1%.
Balance Sheet
As of Dec 29, 2021, cash and cash equivalent totaled $302.4 million compared with $146.9 million as of Dec 30, 2020. Total liabilities at the end of the quarter increased to $1,022 million, compared with $710.9 million at the end of Dec 30, 2020.
Q1 & 2022 Outlook
For first-quarter 2022, the company expects total revenues between $196 million and $201.4 million. Shack sales are anticipated in the range of $190 million to $195 million. The company’s licensed revenue expectation is expected between $6 million and $6.4 million for first-quarter 2022.
For first-quarter 2022, the company’s Same-Shack Sales are expected to increase high-single digits to low-double digits. Meanwhile, Shack-Level operating profit is projected in the range of 11-14%.
For 2022, the company anticipates opening 40 to 45 shacks. Total General and administrative expenses for 2022 are anticipated between $108 million and $114 million. Depreciation expenses for 2022 are expected in the range of $70 million to $75 million.
The company currently has a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks in the Zacks Retail-Wholesale sector include MarineMax, Inc. (HZO - Free Report) , Arcos Dorados Holdings Inc. (ARCO - Free Report) and Tapestry, Inc. (TPR - Free Report) .
MarineMax sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 55.8%, on average. Shares of HZO have increased 4.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MarineMax’s 2022 sales and EPS suggests growth of 13.9% and 16.2%, respectively, from the year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 42.9%. Shares of the company have surged 28.7% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 10.4% and 255.6%, respectively, from the year-ago period’s levels.
Tapestry carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 29%, on average. Shares of the company have increased 6.1% in the past year.
The Zacks Consensus Estimate for Tapestry’s 2022 sales and EPS suggests growth of 15% and 18.5%, respectively, from the year-ago period’s levels.