3 Risks to Shake Shack Shares Right Now
Last week, Shake Shack (NYSE: SHAK) reported second-quarter revenue of $91.8 million, a decrease of 40% year over year, and below analysts' consensus projections of $93 million. Adjusted earnings per share came in at a loss of $0.45, below consensus expectations of a loss of $0.36. The results were clearly disappointing as the stock dropped about 12% on the trading day following the release.
Shake Shack shares are down almost 15% year-to-date (versus a gain of about 2% for the S&P 500) and there are clear signs that risks remain to the quick-service restaurant's future revenue in 2020. The company has withdrawn its guidance for the fiscal year ending Dec. 30, 2020, due to uncertainties around the COVID-19 pandemic.
Let's take a closer look at three of these risks and what they might mean for this restaurant chain's potential as an investment.
Source Fool.com
