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Shake Shack (SHAK) Q2 Earnings Meet Estimates, Revenues Top
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Shake Shack Inc. (SHAK - Free Report) posted decent second-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis. During the quarter, the company benefited from product innovations, strategic menu pricing, technology implementations and promotions.
Looking ahead, SHAK is committed to achieving efficiency across regions and formats by utilizing drive-throughs and third-party delivery. The company plans to reduce build costs by 10% in 2024 and further lower costs in 2025, enabling the exploration of new real estate options while maintaining returns. It intends to achieve strong unit-level economics and boost ROI, fostering long-term shareholder value creation.
Following the results, the company’s shares moved up 16.9% during trading hours on Aug 1.
Earnings & Revenue Details
SHAK’s fiscal second-quarter adjusted earnings per share (EPS) came in at 27 cents, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company reported adjusted EPS of 18 cents.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $316.5 million beat the consensus mark of $314 million. The top line increased 16.4% on a year-over-year basis.
Same-Shack sales increased 4% year over year compared with 1.6% growth reported in the previous quarter. Our estimate for the metric was 2.5%.
Shack sales rose 16.7% year over year to $305.5 million. We suggested the metric to be $302.4 million.
Licensing revenues increased 10.2% year over year to $11 million. We suggested the metric to be $11.3 million. Shack system-wide sales rose 13.5% year over year to $483.7 million.
Operating Highlights
During the quarter, operating income came in at $10.8 million compared with $4.7 million reported in the prior-year quarter. Restaurant-level profit margin was 22%, up 100 basis points (bps) year over year.
In the fiscal second quarter, food and paper costs (as percentages of company revenues) contracted 120 bps year over year to 27.8%. Labor and related costs (as percentages of company revenues) contracted 30 bps year over year to 28.4%.
Total expenses during the quarter came in at $305.7 million compared with $267.1 million reported in the prior-year quarter. Our estimate for the metric was $302.2 million.
Adjusted EBITDA in the reported quarter amounted to $47.2 million compared with $37.1 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 130 bps year over year to 14.9%.
Balance Sheet
As of Jun 26, 2024, cash and cash equivalents totaled $301.8 million compared with $224.7 million as of Dec 27, 2023. Total long-term debt at the end of the fiscal second quarter came in at $246.2 million from $245.6 million as of Dec 27, 2023.
Q3 & Fiscal 2024 Outlook
For third-quarter fiscal 2024, the company expects total revenues to be between $311.6 million and $317 million. Licensing revenues are projected in the range of $11.6-$12 million. The company anticipates fiscal second quarter Restaurant-level profit margin to be 20-20.5%.
For the fiscal 2024, the company expects revenues in the range of $1.24-$1.25 billion compared with the previous expectation of $1.22-$1.25 billion. Licensing revenues are projected in the range of $44-$45 million compared with the previous expectation of $45-$47 million. Restaurant-level profit margins are projected to reach 20.6-21% compared with the previous projection of 20.2-21%. The company expects Adjusted EBITDA in the range of $165-$170 million.
The company expects approximately 40 company-operated openings during the fiscal 2024. It also anticipates approximately 40 licensed Shack openings in the same time frame.
Zacks Rank
Shake Shack currently carries a Zacks Rank #3 (Hold).
Starbucks Corporation (SBUX - Free Report) reported mixed third-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line declined on a year-over-year basis. The downside can be attributed to the competitive market dynamics in China, macro challenges and price wars.
In the fiscal third quarter, the company reported adjusted EPS of 93 cents, in line with the Zacks Consensus Estimate. The bottom line declined 7% year over year from $1.00. Quarterly revenues of $9,113.9 million missed the Zacks Consensus Estimate of $9,224 million. The top line dropped 0.6% on a year-over-year basis due to dismal international revenues. Global comparable store sales declined 3% year over year. The downside was backed by a decline of 5% in comparable transactions, partially overshadowed by a 2% increase in average tickets.
Chipotle Mexican Grill, Inc. (CMG - Free Report) released impressive second-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. During the quarter, the company benefited from successful promotions regarding Chicken Al Pastor driving significant engagement and sales. Also, the emphasis on throughput and staff training proved effective in meeting heightened demand and supported transaction growth.
During the second quarter, CMG reported adjusted EPS of 34 cents, outpacing the Zacks Consensus Estimate of 31 cents. The bottom line increased 36% from 25 cents reported in the year-ago quarter. Quarterly revenues of $2.97 billion surpassed the consensus mark of $2.94 billion by 1.3%. The top line rose 18.2% on a year-over-year basis. The upside was driven by strong comparable restaurant sales growth backed by increased transactions (8.7%) and average checks (2.4%).
McDonald's Corporation (MCD - Free Report) reported drab second-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The top and the bottom line declined on a year-over-year basis. The dismal performance was caused by a pressured industry landscape and the war in the Middle East.
During the second quarter, MCD reported adjusted EPS of $2.97, missing the Zacks Consensus Estimate of $3.08. Adjusted earnings fell 6% year over year. Quarterly net revenues of $6,490 million lagged the consensus mark of $6,651 million. The top line inched down 0.1% year over year. Global comps declined 1% against 11.7% growth in the prior-year quarter.
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Shake Shack (SHAK) Q2 Earnings Meet Estimates, Revenues Top
Shake Shack Inc. (SHAK - Free Report) posted decent second-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis. During the quarter, the company benefited from product innovations, strategic menu pricing, technology implementations and promotions.
Looking ahead, SHAK is committed to achieving efficiency across regions and formats by utilizing drive-throughs and third-party delivery. The company plans to reduce build costs by 10% in 2024 and further lower costs in 2025, enabling the exploration of new real estate options while maintaining returns. It intends to achieve strong unit-level economics and boost ROI, fostering long-term shareholder value creation.
Following the results, the company’s shares moved up 16.9% during trading hours on Aug 1.
Earnings & Revenue Details
SHAK’s fiscal second-quarter adjusted earnings per share (EPS) came in at 27 cents, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company reported adjusted EPS of 18 cents.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Shake Shack, Inc. price-consensus-eps-surprise-chart | Shake Shack, Inc. Quote
Quarterly revenues of $316.5 million beat the consensus mark of $314 million. The top line increased 16.4% on a year-over-year basis.
Same-Shack sales increased 4% year over year compared with 1.6% growth reported in the previous quarter. Our estimate for the metric was 2.5%.
Shack sales rose 16.7% year over year to $305.5 million. We suggested the metric to be $302.4 million.
Licensing revenues increased 10.2% year over year to $11 million. We suggested the metric to be $11.3 million. Shack system-wide sales rose 13.5% year over year to $483.7 million.
Operating Highlights
During the quarter, operating income came in at $10.8 million compared with $4.7 million reported in the prior-year quarter. Restaurant-level profit margin was 22%, up 100 basis points (bps) year over year.
In the fiscal second quarter, food and paper costs (as percentages of company revenues) contracted 120 bps year over year to 27.8%. Labor and related costs (as percentages of company revenues) contracted 30 bps year over year to 28.4%.
Total expenses during the quarter came in at $305.7 million compared with $267.1 million reported in the prior-year quarter. Our estimate for the metric was $302.2 million.
Adjusted EBITDA in the reported quarter amounted to $47.2 million compared with $37.1 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 130 bps year over year to 14.9%.
Balance Sheet
As of Jun 26, 2024, cash and cash equivalents totaled $301.8 million compared with $224.7 million as of Dec 27, 2023. Total long-term debt at the end of the fiscal second quarter came in at $246.2 million from $245.6 million as of Dec 27, 2023.
Q3 & Fiscal 2024 Outlook
For third-quarter fiscal 2024, the company expects total revenues to be between $311.6 million and $317 million. Licensing revenues are projected in the range of $11.6-$12 million. The company anticipates fiscal second quarter Restaurant-level profit margin to be 20-20.5%.
For the fiscal 2024, the company expects revenues in the range of $1.24-$1.25 billion compared with the previous expectation of $1.22-$1.25 billion. Licensing revenues are projected in the range of $44-$45 million compared with the previous expectation of $45-$47 million. Restaurant-level profit margins are projected to reach 20.6-21% compared with the previous projection of 20.2-21%. The company expects Adjusted EBITDA in the range of $165-$170 million.
The company expects approximately 40 company-operated openings during the fiscal 2024. It also anticipates approximately 40 licensed Shack openings in the same time frame.
Zacks Rank
Shake Shack currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
Starbucks Corporation (SBUX - Free Report) reported mixed third-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line declined on a year-over-year basis. The downside can be attributed to the competitive market dynamics in China, macro challenges and price wars.
In the fiscal third quarter, the company reported adjusted EPS of 93 cents, in line with the Zacks Consensus Estimate. The bottom line declined 7% year over year from $1.00. Quarterly revenues of $9,113.9 million missed the Zacks Consensus Estimate of $9,224 million. The top line dropped 0.6% on a year-over-year basis due to dismal international revenues. Global comparable store sales declined 3% year over year. The downside was backed by a decline of 5% in comparable transactions, partially overshadowed by a 2% increase in average tickets.
Chipotle Mexican Grill, Inc. (CMG - Free Report) released impressive second-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. During the quarter, the company benefited from successful promotions regarding Chicken Al Pastor driving significant engagement and sales. Also, the emphasis on throughput and staff training proved effective in meeting heightened demand and supported transaction growth.
During the second quarter, CMG reported adjusted EPS of 34 cents, outpacing the Zacks Consensus Estimate of 31 cents. The bottom line increased 36% from 25 cents reported in the year-ago quarter. Quarterly revenues of $2.97 billion surpassed the consensus mark of $2.94 billion by 1.3%. The top line rose 18.2% on a year-over-year basis. The upside was driven by strong comparable restaurant sales growth backed by increased transactions (8.7%) and average checks (2.4%).
McDonald's Corporation (MCD - Free Report) reported drab second-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The top and the bottom line declined on a year-over-year basis. The dismal performance was caused by a pressured industry landscape and the war in the Middle East.
During the second quarter, MCD reported adjusted EPS of $2.97, missing the Zacks Consensus Estimate of $3.08. Adjusted earnings fell 6% year over year. Quarterly net revenues of $6,490 million lagged the consensus mark of $6,651 million. The top line inched down 0.1% year over year. Global comps declined 1% against 11.7% growth in the prior-year quarter.