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Shake Shack reports strong Q2 sales, stock soars

Heidi Chung
Reporter

Shake Shack (SHAK) posted a beat on both the top and bottom lines and better-than-expected same-store sales growth during its second quarter. The burger chain also boosted its full-year revenue guidance, which sent the stock soaring 5% in after-hours trade.

Here are the numbers for Shake Shack’s second quarter, compared to Bloomberg-compiled estimates:

  • Revenue: $152.7 million vs. $149.5 million expected

  • Adj. earnings per share: 27 cents vs. 23 cents expected

  • Same-store sales: +3.6% vs. +2.2% expected

Shake Shack now expects revenue between $585 million to $590 million, up from the previously expected range between $576 million to $582 million. The company also expects full-year same-store sales growth of approximately 2%, Shake Shack previously estimated 1%-2% same-store sales growth for the year.

“More than halfway through 2019, we are pleased to report continued strong momentum into the second quarter across all areas of the business,” CEO Randy Garutti said in a statement. “Our digital channels, including delivery, were a key contributor to these results, in conjunction with a benefit from the shift in Easter timing within the second quarter.”

A ShackBurger and fries. (Photo by Ricky Carioti/The Washington Post via Getty Images)

As fast-food restaurants continue to expand delivery services, Shake Shack is also jumping on the delivery bandwagon by partnering up third-party delivery service provider Grubhub (GRUB). The burger chain announced the new partnership Monday morning and will be offering delivery services in about 150 U.S. locations. The announcement took investors by surprise, after the company previously argued that delivery did not necessarily fit with their brand. But, as competition remains stiff among fast-food restaurants, delivery has become a key part of growth.

Rival McDonald’s (MCD) recently announced an expanded delivery partnership with DoorDash and Uber Eats (UBER), while Yum Brands (YUM) has an alliance with Grubhub.

“Shake Shack is experiencing incredible growth. Now more than ever, we’re doubling down on our commitment to be an accessible, omnichannel business,” Garutti said in a statement. “The Shake Shack-Grubhub partnership demonstrates our strategic commitment to digital innovation and guest experience, and represents an important component in our overall digital ecosystem, including web-ordering, mobile app, kiosk and delivery.”

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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