Why Shake Shack Stock Is Sinking Today
Shares of quickly growing burger and milkshake chain Shake Shack (NYSE: SHAK) are down 11% as of noon ET on Tuesday after the company provided a disappointing business update for the upcoming second quarter. Instead of delivering 19% sales growth in Q2 as previously guided, management now believes revenue will only rise 17% at the midpoint. Similarly, same-store sales growth guidance slipped from 4% to 2.75% at the midpoint, while restaurant-level operating margins look to be at least a percentage point worse than expected. Following today's decline, Shake Shack shares are down 61% from their 52-week high.
Speaking about the business update, Chief Executive Officer Rob Lynch explained, "Our updated guidance reflects the current macroeconomic uncertainty, competitive landscape, and related impacts now that we are more than two-thirds through the quarter, but it's important to emphasize that our fundamental business drivers remain strong."
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Source Fool.com
