Shake Shack (SHAK), the popular but pricey burger chain, has a new item on its menu. “The chicken has crossed the road in this case,” joked Randy Garutti, CEO of Shake Shack. The restaurant chain unveiled its first-ever chicken sandwich, the "Chick’n Shack," priced at $6.29. “We tried to change America's view of what a classic burger and burger joint should be … It's taken us a couple of years, but we're headed toward the same opportunity with chicken,” said Garutti.
As tasty as Shake Shack’s offerings may be for customers, for its shareholders, the stock has not been so appetizing. The stock has fallen more than 65% from its 52-week high in May 2015. The CEO said pleasing investors through M&A is not in its pipeline. “I think our shareholders and the people who are looking at the stock will look at it and realize [that] this company is going to be here for decades to come,” said Garutti.
Shake Shack’s continued growth and strong sales have proven Americans are willing to pay a premium price for fresh, quality ingredients. It’s a concept that has also served Chipotle (CMG), that is until its recent E. coli nightmare. Despite the burrito chain’s struggles, the head of Shake Shack stands by his competitor. “We're big supporters of … the team at Chipotle,” said Garutti. “They’ve created an incredible company at which I've eaten many burritos ... and I will continue to … I've got no doubt they’ll pull out of it,” he added.
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After Shake Shack's hugely successful initial public offering, Garutti dismissed being grouped with other IPO darlings that have fallen in share price, such as GoPro (GPRO) and Etsy (ETSY). “We went public at $21, and today the stock is still trading well above that. It's been a wild year for us … but we think it's a great entry point for people at this stage,” he said.
Outside of its new chicken sandwich, Shake Shack is expanding by opening new storefronts both domestically and overseas, including Asia. The CEO’s favorite menu item at its location in Japan is a matcha green tea concrete dessert. For now, unfortunately, the frozen custard is only available in Japan.
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