Shake Shack Stock Plunges 20% on Delivery Challenges, Store Closures
Shares of Shake Shack (NYSE: SHAK) were shellacked on Tuesday. The burger chain's third-quarter results, forward guidance, and plans for delivery and store remodels all provided cause for concern for investors.
Shake Shack's revenue rose 31.9% year over year to $157.8 million, matching Wall Street's estimates. The gains were driven mostly by new restaurant openings. Shake Shack opened a total of 17 net stores during the third quarter, including 11 company-operated restaurants in the U.S. and six net licensed international locations.
However, same-store sales -- which Shake Shack defines as sales from restaurants open for 24 months or longer -- increased only 2%. That was below analysts' expectations of 2.5%. Traffic rose only 1.2%, and the remaining growth was driven primarily by price increases.
Source Fool.com
