Monday , July 13 2020

Shake Shack sinks as same-store sales disappoint

Bloomberg

Shake Shack Inc tumbled to what would be its lowest level since July after the burger chain’s third-quarter comparable sales trailed estimates and management reduced its sales target.
“After seeing improved trends over the last two quarters, 3Q results — as well as 4Q commentary — were a sobering reminder of the volatility in results that often accompanies the stocks of young, fast growing companies,” Morgan Stanley analyst John Glass said.
Shake Shack’s decision to move to a single delivery provider (GrubHub) caused “some noise” in quarterly same-restaurant sales, management said on the conference call.
Wall Street analysts said the full-year 2019 comparable sales forecast implies a decline in the fourth quarter and they expect the transition impact to last into 2020.
The stock fell as much as 18% ahead of the market open to $69.11. That would be the biggest single-day, earnings-related decline in Shake Shack’s four years as a public company, according to Bloomberg data.

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