Shake Shack’s Stock Earnings Down in First Quarterly Report

Shake Shack got off to a running start when it went public earlier this year, but its first quarterly results are disappointing

Flickr/Ewan Munro

Burgers, fries, and shakes don’t seem to have lasting power on Wall Street. (Photo Modified: Flickr/Ewan Munro)

Investors knew it was too good to last when Shake Shack went public earlier this year to the tune of $49 per share and a $1.6 billion overall value. Forbes analysts warned that the initial excitement could be short-lived, and it turns out they may have been right.

After reporting its first quarterly financial results, Shake Shack’s financial boom has turned into a bit of a bummer. According to the burger chain’s investor page, shares are down at least 10 percent in early trading. Though it should be noted that Shake Shack's IPO was only announced less than two months ago.

Despite sales jumping from 51.5 percent to $34.8 million in Q4, Shake Shack had a net loss of $.01 per share, which is admittedly better than the $.03 predicted by investors. In fact, most of Shake Shack’s numbers, including overall and same Shack sales, revenue, and operating profit increased in 2014, or remained in the green. Thus, despite the fact that “investors are punishing the stock,” according to Business Insider, CEO Randy Garutti remains positive.

“We are pleased with the strength of our fourth quarter results and excited to begin our journey as a public company,” Garutti said in a statement.  “Our culture of enlightened hospitality has enabled Shake Shack to become a globally beloved brand where all of our stakeholders are rooting for our success. We are witnessing a seismic shift in people’s understanding and expectations of food, and… We will continue to invest in high quality, premium ingredients that our guests have come to expect from us, while creating a vibrant community gathering place that delivers a meaningful guest experience.”

Garutti said that looking forward, he sees the potential to grow the Shake Shack fleet from 63 to 450 locations.

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