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Update March 12, 2015- Bloomberg reports that same-store-sales have gone flat for Shake Shack as cheaper alternative are also providing antibiotic-free beef, etc., “Shake Shack’s initial public offering at the end of January got customers and investors excited, more than doubling the stock price. Now it looks like restaurateur Danny Meyer’s gourmet burger chain is facing intensifying competition in its upscale niche.
The company gave its first earnings report today, posting a 52 percent increase in revenue for the fourth quarter, to $34.8 million. Still, it disappointed investors, reporting same-store sales—sales at the 13 Shacks open at least two years—up 7.2 percent for the quarter but only 4.1 percent for 2014, with growth in 2015 expected to be in the “low single digits.” Its shares closed at a high of $46.90 but, after the earnings report, were down more than 5 percent in after-hours trading.
Higher-end fast-food chains that boast better ingredients, the so-called fast-casual segment of the restaurant business, appeal to the growing number of health-conscious consumers. Chipotle Mexican Grill has capitalized on that market, with same-store sales up 16.1 percent for the fourth quarter and 16.8 percent for 2014. Shake Shack touts its “all-natural” antibiotic- and hormone-free beef.”
March 11, 2015– Danny Meyer was scared to death to go public because of the brutal criticism that CEO’s endure. He said as much on CNBC one year before he decided to go public.
Shake Shake (ticker SHAK) reported it’s first earnings since the IPO and they lost money on the bottom line. How is that possible for a mature old bricks and mortar store? SHAK is not exactly a tech company.
They beat estimates on the top-line revenue, but expenses somehow ate all the profits? Huh?
CNBC analysts were not kind. They are already predicting the demise of the stock. Shares were selling off 7% after hours.
Welcome to Wall Street, Danny.