Shake Shack stock plunges after weak sales and earnings
Updated
Updated · The Wall Street Journal · May 7
Shake Shack stock plunges after weak sales and earnings
8 articles · Updated · The Wall Street Journal · May 7
Shares fell nearly 30% to $68.16 after first-quarter revenue of $366.7 million missed estimates and the chain posted a $2.6 million operating loss.
The company blamed higher beef and development costs, uneven footfall and weaker tourism at some destination locations, while saying conflict in the Middle East hurt licensed operations there.
Shake Shack still plans to open more sites and expects sales growth this year, using loyalty-program discounts as fast-food rivals including McDonald's compete for pressured consumers.
With soaring costs causing a quarterly loss, is Shake Shack's massive tech investment a brilliant long-term play or a costly strategic misstep?
Can Shake Shack's new CFO and tech overhaul overcome the worst beef price crisis in decades?