Yahoo Finance Shake Shack (SHAK) Q1 Earnings Beat Estimates, Revenues Lag
Shake Shack Inc. SHAK reported first-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. During the quarter, the company benefitted from sequential improvements in traffic, marketing initiatives and strong new store performances. Following the results, the company’s shares moved up 1.6% during trading hours on May 2.
Earnings & Revenue Details
Shake Shack’s fiscal first-quarter adjusted earnings per share (EPS) came in at 13 cents, beating the Zacks Consensus Estimate of 10 cents. In the prior-year quarter, the company reported a loss of 1 cent per share.
Quarterly revenues of $290.5 million missed the consensus mark of $291 million. The top line increased 14.7% on a year-over-year basis. Same-Shack sales improved 1.6% year over year.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Shake Shack, Inc. price-consensus-eps-surprise-chart | Shake Shack, Inc. Quote
Shack sales rose 14.9% year over year to $280.6 million. We suggested the metric to be $280.7 million.
Licensing revenues increased 10.3% year over year to $10 million. We suggested the metric to be $9.6 million. Shack system-wide sales rose 12.3% year over year to $443.3 million.
Operating Highlights
During the quarter, the company reported breakeven operating income compared with an operating loss of $3.2 million reported in the prior-year quarter. Restaurant-level profit margin was 19.5%, up 120 basis points (bps) year over year.
In the fiscal first quarter, food and paper costs (as percentages of company revenues) contracted 80 bps year over year to 28.6%. Labor and related costs (as percentages of company revenues) also declined 130 bps year over year to 29.1%. Total expenses during the quarter came in at $290.5 million compared with $256.5 million reported in the prior-year quarter.
Adjusted EBITDA in the reported quarter amounted to $35.9 million compared with $27.6 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 150 bps year over year to 12.4%.
Balance Sheet
As of Mar 27, 2024, cash and cash equivalents totaled $260.2 million compared with $224.7 million as of Dec 27, 2023. Total long-term debt at the end of the reported quarter increased to $245.9 million from $245.6 million reported in the previous quarter.
Q2 & Fiscal 2024 Outlook
For second-quarter fiscal 2024, the company expects total revenues to be between $308.9 million and $314.3 million. Licensing revenues are projected in the range of $10.9-$11.3 million. The company anticipates fiscal second-quarter Restaurant-level profit margin to be 21.5-22%.
For the fiscal 2024, the company expects revenues in the range of $1.22-$1.25 billion. Licensing revenues are projected to be between $45 million and $47 million. Restaurant-level profit margins are projected to reach 20.2-21% compared with the previously expected 20-21%. The company expects Adjusted EBITDA in the range of $160-$170 million.
The company expects approximately 40 company-operated openings during the fiscal 2024. It also projects 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
Yum China Holdings, Inc. YUMC reported impressive first-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. The upside can be attributed to robust total system sales growth and new unit contribution.
During the quarter, YUMC reported adjusted EPS of 71 cents, beating the Zacks Consensus Estimate of 66 cents. The bottom line moved up 2.9% from 69 cents reported a year ago.
Quarterly revenues of $2.96 billion outpaced the consensus mark of $2.94 billion. The top line inched up 1% on a year-over-year basis. Excluding foreign currency translation, revenues increased 7% year over year.
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During the quarter, CMG reported adjusted EPS of $13.37, outpacing the Zacks Consensus Estimate of $11.63. The bottom line increased 27.3% from $10.50 reported in the year-ago quarter.
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McDonald's Corporation MCD posted mixed first-quarter 2024 results, with earnings missing 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, MCD reported McDonald's reported adjusted EPS of $2.70, missing the Zacks Consensus Estimate of $2.71. However, EPS increased 2% year over year.
Quarterly net revenues of $6,169 million beat the consensus mark of $6,168 million. The top line rose 5% year over year.
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