NEW YORK - Shake Shack Inc . (NYSE:SHAK) reported a significant revenue increase in its latest quarter, with figures surpassing analyst expectations, propelling the company's shares up by nearly 19%
The fast-casual restaurant chain announced a total revenue of $316.5 million, marking a 16.4% rise from the previous year and exceeding the consensus estimate of $314.59 million.
The revenue growth was attributed to a robust performance in Shack sales, which reached $305.5 million, and licensing revenue of $11.0 million. System-wide sales also saw an uptick, climbing 13.5% to $483.7 million. Same-Shack sales, an important metric for the company's organic growth, were up 4.0%.
Shake Shack's operating income showed a healthy increase to $10.8 million, up from $4.7 million in the same quarter last year. The net income also improved, reaching $10.4 million compared to $7.2 million in the previous year. The adjusted EBITDA experienced a significant jump of 27.4%, amounting to $47.2 million.
The company's earnings per diluted share stood at $0.23, with an adjusted pro forma net income of $12.1 million, or $0.27 per fully exchanged and diluted share, which was in line with the analyst estimate of $0.27 for the quarter.
Commenting on the report, TD (TSX:TD) Cowen analysts said:
"We are pleased with 2Q's same-store sales beat, with strength that has sustained into July with positive traffic. This transpired as quick service burger materially stepped up
discounting in July, helping to diffuse Shack's bear case."
In addition to the financial results, Shake Shack continued its expansion by opening twelve new Company-operated Shacks, including three drive-thrus, and eleven new licensed Shacks.
The stock's upward movement reflects investor optimism following the revenue beat.
Shake Shack's CEO stated, "Our strong performance this quarter reflects the hard work and dedication of our team. We are pleased with the positive response from our guests to our new Shacks and innovative menu offerings."
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