Shake Shack Falls After Reporting Q3 Earnings

Shares of Shake Shack were plunging on Monday after the company reported third quarter financial results.

Despite earnings beating expectations, shares fell over 13% in after-hours trading as Wall Street learned about the company’s disappointing same-store sales growth.

For the third quarter, Shake Shack reported adjusted earnings per share of 26 cents while analysts had expected just 20 cents. Revenue at $157.8 million was in line with estimates. Same-store sales rose 2.0%, lower than the 2.5% growth that analysts predicted.

Looking ahead, Shake Shack now expects 2019 total revenue, which includes licensing revenue, is now expected to come in between $592 million to $597 million. Previously the company expected a range of $585 million to $590 million.

Same-store sales growth for 2019 was revised downwards to about 1.5% from the previous outlook of about 2.0%.

CEO Randy Garutti revealed that it is expecting to have 38 to 40 company-operated restaurant openings by the end of 2019 and in 2020, it expects to open 40 to 42 domestic company-operated restaurants.

Garutti also said that Shake Shack would be now actively marketing its recent partnership with GrubHub nationally.

Chief Financial Officer Tara Comonte noted on the earnings call that the company’s results to-date coupled with “expected volatility from the delivery transition” were reflected in the downward revised year-end same-store sales guidance of 1.5%.

Disclaimer: We have no position in Shake Shack Inc. (NYSE: SHAK) and have not been compensated for this article.