Shake Shack (SHAK) Stock Hammered After Disappointing Results

Wall Street

Shake Shack Inc (NYSE:SHAK) shares are plunging $4.42, or about 12%, to $37.16 in after-hours trading Wednesday following the release of the company’s second-quarter earnings results.

The New York-based burger chain reported earnings of $0.14 per diluted share, ahead of the $0.13 per share analysts were expecting, and more than 55% higher the $0.09 per share the company reported during the same period last year.

Revenue in Q2 increased 37.2% to $66.5 billion from $48.5 billion the previous year, beating analysts $63.14 billion expectations for the period. Store sales climbed by 4.5%, a bit lower than the 5.4% gain expected by analysts. It should be noted that despite the light miss, store sale growth came on top of an impressive 12.9% increase last year.

Despite falling short of analysts’ store sales estimates, the company’s management continues to focus on the future.

“Domestically, given favorable development tailwinds in our 2016 pipeline, we have increased guidance to open 18 domestic company-operated Shacks this year,” CEO Randy Garutti said in a company statement. “Next week we will reach a milestone of our 100th Shack opening worldwide. We have never been more excited about the opportunities ahead of us and are committed to investing in our team as we envision and execute the next 100 great Shacks.”

Net income for the second quarter came in at $3.3 million, compared to $1.1 million for the same period last year.

For full-year 2016, Shake Shack provided revenue guidance of $253 to $256 million, as compared to analysts’ expectations of $252 million.

The $1.5 billion market cap company reported $68.37 million in cash versus $288.73 million in total liabilities in its most recent quarter.

SHAK currently prints a one year loss of about 43 percent, and a year-to-date return of around 3 percent. The name boasts 3 ‘Buy’ endorsements, compared to 6 ‘Holds’ and 3 ‘Sell’.

The chart below shows where the equity has traded over the last 52 weeks.

SHAK stock

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