Shake Shack Sales Aren't Growing Like They Used To
Shake Shack, known for indulgent antibiotic-free hamburgers, crinkle-cut fries and frozen custard shakes, on Wednesday reported a weaker-than-expected rise in quarterly sales at established restaurants.
Shares in the company tumbled 8.7% to $37.30 in extended trading after the chain said closely watched same-restaurant sales were up 4.5% during the second quarter. Analysts had expected a 5.4% rise, according to research firm Consensus Metrix.
Traffic to U.S. fast-food chains has been weak due in part to competition from grocery stores, which have been raising food prices at a slower pace than restaurants.
The company had net income of $3.3 million, or 14 cents per share, versus net income of $1.1 million, or 8 cents per share, in the year-ago period.
Adjusted earnings were also 14 cents per share, topping analysts' average estimate by a penny, according to Thomson Reuters I/B/E/S.
Total revenue rose 37% to $66.5 million.
Shake Shack shares debuted in January 2015 on the New York Stock Exchange at $21 a share and briefly topped $100 a share in May 2015. They have underperformed the S&P 500 since November.