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Shake Shack (SHAK) Posts Preliminary Q4 Results, Stock Surges

Zacks Equity Research
·3-min read

Shake Shack Inc. SHAK recently provided preliminary unaudited results for the fiscal fourth quarter and the fiscal year 2020.  The company announced that both average weekly sales and same-sack sales have witnessed continued improvement throughout the quarter under review. Following the preliminary results, the company’s shares gained 11.8% on Jan 12, 2021. Notably, in the past three months, the company’s shares have surged 43%, compared with the industry’s growth of 4.6%.

Average weekly sales in the fiscal fourth quarter increased to $62,000 from $58,000 in third-quarter fiscal 2020 and $45,000 in second-quarter fiscal 2020. Moreover, in the quarter under review, same-Shack sales fell 17.4%, compared with declines of 31.7% and 49% in the fiscal third and second quarter, respectively. Despite the coronavirus pandemic, the same-Shack sales at the company’s suburban locations were nearly flat in the fourth quarter. However, urban Shack-sales decreased 31%.

Preliminary revenues in fourth-quarter 2020 were $157 million (including 53rd week), up 4% year over year. In third-quarter 2020, sales declined 17.3%. However, excluding 53rd week total revenues in the quarter declined 3.3% year over year.

Meanwhile, shack sales in the fourth quarter were $152.5 million, up 4.6% year over year. In third-quarter fiscal 2020, shack sales declined 17.1%. Preliminary licensed revenues in the fourth quarter declined 10.6% to $5 million.

In fourth-quarter 2020, the company opened 13 net system-wide Shacks, which includes eight domestic company-operated Shacks and five net licensed Shacks. At the end of quarter, two domestic company-operated Shacks and 17 licensed Shacks remained temporarily closed. The company is planning to open 35 to 40 domestic company-operated Shacks in 2021.

 

Preliminary Fiscal 2020 Results

Revenues for fiscal 2020 were $522.9 million, down 12.1% year over year. Excluding the 53rd week, total revenues declined 13.9%. Same-Shack sales slumped 27.8% in fiscal 2020.

The company opened 36 net system-wide Shacks, comprising 20 domestic company-operated Shacks and 16 net licensed Shacks.

Zacks Rank & Key Picks

Shake Shack currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the same space are Jack in the Box Inc. JACK, Arcos Dorados Holdings Inc. ARCO and Yum! Brands, Inc. YUM, each carrying a Zacks Rank #2 (Buy).

Jack in the Box has a three-five year earnings per share growth rate of 10.6%.

Arcos Dorados and Yum! Brands’ 2021 earnings are expected to rise 127.3% and 12.1%, respectively.

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