Shake Shack Inc.’s stock was rallying by more than 19% on Thursday after the burger chain swung to a fourth-quarter profit and beat analyst estimates.
Shake Shack’s stock
SHAK,
+23.04%
jumped by $15.12 to $93.19, its highest level since 2021.
The New York-based fast-food chain said it earned $6.77 million, or 15 cents a share in the fourth quarter. In the year-ago period, it lost $7.76 million, or 20 cents a share.
Adjusted profit of a 2 cents a share beat the FacSet consensus estimate of a penny a share.
Fourth-quarter revenue increased by about 20% to $286.2 million from $238.5 million, and beat the analyst estimate of $280.2 million. Traffic also rose 1.4%, reversing declines.
During the quarter, the company opened 15 new Shake Shacks in the U.S. plus nine licensed Shacks in Mexico, Thailand and other locations.
William Blair analyst Sharon Zackfia reiterated an outperform rating on Shake Shack and said the company’s earnings beat was driven by favorable labor and commodity conditions.
Looking ahead, Shake Shack is planning to boost advertising and sales-driving initiatives in 2024 as it focus on its supply chain and ,ongoing improvements in labor and staffing, she said.
Also read: Shake Shack launches search for new chief executive, keeps guidance for Q4
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