Shake Shack (SHAK) reported impressive third-quarter earnings after the bell on Thursday, but sales were weaker than Wall Street estimates.
Same-store sales, a key metric for the restaurant industry, were softer than anticipated. Shake Shack saw a sales decline of 0.7% versus 0.9% growth that analysts forecasted in the third quarter.
The company earned 21 cents per share, which was higher than consensus of 13 cents per share. Analysts were expecting a profit drop for the first time since Shake Shack went public in 2015. Nevertheless, the burger chain has now beat EPS estimates in the past 13 quarters.
Revenue also came in better-than-expected at $119.6 million versus $116.8 estimates, according to analysts polled by Bloomberg.
“We’re pleased to report that Shake Shack’s overall growth remains strong as we head into the end of 2018. During the third quarter, we generated $119.6 million in revenue, and delivered adjusted EBITDA of $21.3 million with year on year increases of nearly 27% and 18%, respectively. The performance of both our new and existing Shacks and the incredible hard work of all our team members is resulting in a raise to our total revenue guidance for the full year 2018,” CEO Randy Garutti said in a statement.
Though Shake Shack had planned on aggressively expanding throughout 2018, the company hit a roadblock in August and pushed back most new store openings to Q4. The burger chain’s management blamed construction and permit-related issues for the delay.
The company raised its full-year outlook and now expects revenue between $450 million and $452 million. Shake Shack also expects full-year comp sales growth between 0% to 1%.
“We expect to open 33 to 34 new domestic company-operated Shacks in 2018, ending the year with 123 to 124 Shacks, delivering approximately 37% unit growth on the prior year. Looking towards 2019, our preliminary estimate is to open between 36 and 40 new domestic company-operated Shacks,” Garutti said.
Shares fell 10% in after-hours trade on Thursday. Shake Shack stock has soared 22% this year and has outperformed the broader market which is up 3% in the same time period.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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