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Shake Shack Inc. SHAK posted first-quarter fiscal 2025 results, wherein earnings and revenues missed the Zacks Consensus Estimate. The bottom line missed the estimate after beating in the preceding two quarters. However, both metrics increased year over year.
The quarter’s performance was aided by enhanced operations, menu innovation and store openings. Following the results, the SHAK stock witnessed a marginal gain of 1.1% during yesterday’s trading hours.
SHAK’s Earnings & Revenue Details
The company’s adjusted earnings per share (EPS) of 14 cents missed the Zacks Consensus Estimate of 16 cents by 12.5%. However, the metric increased 7.7% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Quarterly revenues of $320.9 million lagged the consensus mark of $328 million by 2.1%. However, the top line increased 10.5% on a year-over-year basis.
Same-Shack sales increased 0.2% year over year compared with 4.3% growth in the previous quarter. Our model predicted the metric to increase 3.1%. Shack sales rose 10.4% year over year to $309.8 million. We expected the metric to be $317.9 million.
Licensing revenues were $11.1 million, up 11.1% year over year. Our model predicted the metric to be $10.7 million. Shack system-wide sales rose 10.4% year over year to $489.4 million.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Shake Shack, Inc. price-consensus-eps-surprise-chart | Shake Shack, Inc. Quote
Operating Highlights of SHAK
In the fiscal first quarter, operating income was $2.8 million compared with $0.03 million reported in the prior-year quarter. Restaurant-level profit margin was 20.7%, up 120 basis points (bps) year over year.
The food and paper costs (as percentages of company revenues) contracted 80 bps year over year to 27.8%. Labor and related costs (as percentages of company revenues) also reduced 110 bps year over year to 28%.
Total expenses in the quarter were $318.1 million compared with $290.5 million in the prior-year quarter. Our estimate for the metric was $326 million.
Adjusted EBITDA in the quarter amounted to $40.7 million, up from $35.9 million in the year-ago quarter. Adjusted EBITDA margin expanded 30 bps year over year to 12.7%.
Balance Sheet of SHAK
As of March 26, 2025, Shake Shack’s cash and cash equivalents totaled $312.9 million compared with $320.7 million as of Dec. 25, 2024. Long-term debt at the end of the fiscal first quarter was $246.5 million compared with $246.7 million as of Dec. 25, 2024.
SHAK Reveals Q2 & FY25 Outlook
For second-quarter fiscal 2025, the company expects total revenues to be between $346 million and $353 million. Licensing revenues are projected in the range of $11.9-$12.3 million. The company anticipates the restaurant-level profit margin to be between 23% and 23.5%.
For fiscal 2025, the company expects revenues to be in the range of $1.4-$1.5 billion. Restaurant-level profit margin is projected to be about 22.5%, up from the prior estimate of 22%. SHAK expects adjusted EBITDA to be in the range of $205-$215 million.
SHAK expects approximately 45-50 company-operated openings in fiscal 2025. It also anticipates approximately 35-40 licensed Shack openings at the same time.