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Shake Shack shares whipsaw after company forecasts weaker same-store sales this year

Amelia Lucas
  • Shake Shack shares initially rose after the company turned in better-than-expected earnings and revenue, but then dropped as investors reacted to a weaker same-store sales forecast. 
  • For 2019, the company is forecasting same-store sales that are flat or rise by 1 percent.

Shake Shack SHAK on Monday reported quarterly earnings and revenue that beat analysts' expectations, but the company disappointed investors with a weaker outlook for same-store sales growth.

Shares of the company whipsawed after the market's close, first rising nearly 4 percent before dropping more than 2 percent.

Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 6 cents, adjusted, vs. 3 cents expected
  • Revenue: $124.3 million vs. $118.8 million expected

During the fiscal fourth quarter, Shake Shack narrowed its net loss to $548,000, or 3 cents a share, from a net loss of $11.03 million, or 47 cents a share.  On an adjusted basis, the company's pro forma earnings were 6 cents per share, topping the 3 cents per share expected by analysts surveyed by Refinitiv.

Net sales rose 29.3 percent to $124.3 million, beating expectations of $118.8 million. Same-store sales grew by 2.3 percent during the quarter, driven by a 2.6 percent price increase. Wall Street was expecting a decline of 1.2 percent.

For 2019, the company is forecasting same-store sales that are flat to up 1 percent. That outlook reflects the impact of the 1.5 percent in price increases that the company put in place in December.

Shake Shack's projected revenue for this year is between $570 million and $576 million. Analysts were expecting the company to see $576 million in sales in 2019.

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