- Shack Shack (NYSE:SHAK) reports same-shack sales fell 3.6% in Q4 to miss to the consensus estimate for a decline of 2.8%. The chain says a holiday calendar shift resulting in one less high traffic shopping week, and a challenging compare in the prior year holiday period due to favorable weather in New York and the Northeast, represented approximately one-third of the same-Shack sales decline.
- Comparable traffic was down 5.4% from a year ago, while pricing/mix contributed 1.8 percentage points of growth.
- Restaurant level operating margin fell 210 bps to 20.4% of sales.
- Average weekly sales for domestic company-operated Shacks decreased to $71K compared to $81K for the same quarter last year, primarily due to the addition of newer Shacks at a broader range of average unit volumes and declines in sophomore and comparable base Shacks.
- Restaurant level operating margin fell 210 bps to 20.4% as sales deleverage factored in along with higher food and paper costs. The consensus mark going into the report was a margin rate of 20.3%. Labor expenses were up 20 bps during the quarter to 28.7% of sales.
- Looking ahead, Shake Shack expects FY20 revenue of $712M to $720M vs. $736M consensus off a low single-digit drop in Same-Shack sales. The company expects 40 to 42 new company-operated Shack openings.
- Shares of Shake Shack are down 9.15% in AH trading to $66.84.
- Previously: Shake Shack EPS beats by $0.07, misses on revenue (Feb. 24)