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Shake Shack Down on Weak Same-Store Sales, Earnings In-Line

Madeleine Johnson

Shake Shack Inc. SHAK just released its fourth quarter fiscal 2016 earnings results, posting earnings, before non-recurring items, of 9 cents per share and revenues of $73 million. Currently, SHAK is a #3 (Hold) on the Zacks Rank, and is down 5.32% to $34.20 per share in trading shortly after its earnings report was released.

Matched earnings estimates. The company reported earnings of 9 cents per diluted share, matching the Zacks Consensus Estimate of 9 cents per share. This number excludes 6 cents from non-recurring items.

Beat revenue estimates. The company saw revenue figures of $73.3 million, surpassing our consensus estimate of $71 million and growing 43.5% year-over-year

Same-Shack sales increased 1.6% in Q4, missing the forecast of 2.9%, and 4.2% in fiscal 2016. The company said that shack-level operating profit, which is a non-GAAP measure, increased 29.9% to $18 million, or 25.4% of Shack sales.

Shake Shack opened nine new locations, including six domestic company-operated Shacks and three net licensed Shacks.

Looking ahead, Shake Shack is raising its total revenue guidance to between $349 million and $353 million (vs. $348 million and $352 million) for fiscal 2017, with Same-Shack sales growth between 2% and 3%. This includes roughly 1.5% to 2% of menu price increases taken in early January, as well as nominal traffic and mix increases.

Here’s a graph that looks at Shake Shack’s price, consensus, and EPS surprise:

Shake Shack, Inc. Price, Consensus and EPS Surprise

Shake Shack, Inc. Price, Consensus and EPS Surprise | Shake Shack, Inc. Quote

Shake Shack Inc. is engaged in owning and operating restaurants. The company offers burgers, hot dogs, frozen custard, crinkle cut fries, beer and wine. It operates primarily in New York, New Jersey, Washington, D.C., Connecticut, Georgia, Illinois, Pennsylvania, Florida, Massachusetts, Virginia, Nevada, London, Istanbul and Dubai. Shake Shack Inc. is headquartered in New York.

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