Shake Shack’s stock declines to its lowest levels in about two years after the company reduces its second-quarter outlook. Reporting from multiple sources says the decline follows a guidance cut issued roughly a month after an earlier forecast, with market participants describing the update as a negative incremental change.
The revised guidance lowers expected second-quarter revenue to $415 million to $420 million, from the prior range of $424 million to $428 million. Same-Shack sales growth is now expected at 2.5% to 3%, compared with the earlier 3% to 5%. Forecasts also include restaurant-level operating margin of 22% to 23% and an expectation for company-operating openings of about 16.
Analysts cited in the coverage note management sets performance expectations with a higher bar in the previous outlook and that the updated ranges may reflect input from new leadership, including CFO Michelle Hook, who began in May. Broader concerns mentioned across the reporting include margin pressure from higher beef and other costs, along with consumer sensitivity to pricing in the fast-casual segment. Shares drop sharply in trading after the announcement.
