Shake Shack Inc (NYSE:SHAK) stock is down 3.1% to trade at $104 at last check, after Piper Sandler downgraded the fast food chain to "neutral" from "overweight," and cut its price objective to $114 from $121. Shares are pulling back from their highest level since May, but still sport a 40.2% year-to-date lead, with familiar support at the $102 region ready to contain any additional losses.What's more, the equity's recent peak comes amid historically low implied volatility (IV), which has been a bullish comb ...

Shake Shack may finally be positioning itself for stronger share price returns.On Aug. 1, popular burger chain Shake Shack (SHAK -1.94%) reported financial results for its fiscal second quarter, showing revenue growth of 16%. That was almost as good as the 18% revenue growth Chipotle Mexican Grill (CMG -2.78%) reported in its second quarter.This is normal. The two chains have grown at a similar pace over the last five years with Shake Shack slightly outpacing Chipotle. But if you invested $1,000 in Chipotle ...

Investment Overview - Shake Shack Inc. (NYSE: SHAK) is rated as a buy due to a solid growth outlook, with expectations of mid-teen percentage growth over the next two years, supported by strong same-store sales and new store openings [1] - Projected adjusted EBITDA is approximately $250 million by FY26, driven by an expanding adjusted EBITDA margin [1][8] Business Description - Shake Shack operates a fast food business selling burgers, fries, and milkshakes, utilizing both self-operated and licensed store models [2] - As of 2Q24, the company has 317 self-operated units and 247 franchised units, with total revenue reported at $316 million, reflecting a 16.4% year-over-year growth [2] - Restaurant level margins (RLM) improved to 22%, with a consolidated EBIT margin of 4.2%, marking significant margin expansions compared to previous quarters [2] Growth Performance - In 2Q24, Shake Shack achieved same-store sales growth (SSSG) of 4%, with a notable sequential improvement in traffic growth from -2.1% in 1Q24 to 0.8% [3] - Management indicated that SSSG strength continued into 3Q24 at 4.1%, driven by positive traffic growth across all regions [3] - The company plans to increase marketing spend to enhance brand awareness, currently spending about 1% of revenue compared to peers' 3-6% [3] Margin Expansion - The outlook for RLM is positive, with expectations of decreasing labor costs due to easing wage inflation and a new labor deployment model [4] - Food and paper cost inflation is projected to decline from 1.5% in 1Q24 to 0.5% in 2Q24, contributing to margin expansion [4] - Fixed cost leverage from mid-teen revenue growth is expected to further enhance profit margins [4] Financial Projections - Revenue is anticipated to grow at a mid-teen percentage for the next two years, supported by same-store sales and new store openings [8] - Adjusted EBITDA is expected to reach approximately $250 million in FY26, with an adjusted EBITDA margin projected at 15% [8] - The stock is expected to trade at 23x forward EBITDA, reflecting a stable valuation compared to peers [8] Conclusion - The overall growth outlook for Shake Shack remains solid, with 2Q24 performance demonstrating resilience in a challenging macro environment [10] - The combination of mid-teen revenue growth, new store openings, and expanding profit margins positions the company favorably for future performance [10]

Serve Robotics (NASDAQ:SERV) stock is on the rise Wednesday after the autonomous delivery robots company announced a new collaboration with Shake Shack (NYSE:SHAK).With this agreement Serve Robotics’ autonomous delivery robots will be used to deliver food from Shake Shack to customers. Also included in this partnership is Uber (NYSE:UBER), which will handle the orders through its Uber Eats platform.It’s worth highlighting that this delivery partnership is only available for residents ordering from Shake Sha ...

U.S. markets were relatively calm Monday as Wall Street entered the home stretch of second-quarter earnings season after a volatile week of trading fueled by recession fears. Trading activity often picks up during the month or so every quarter in which America's largest companies report results. But this past month, especially the last two weeks, has been characterized by abnormal swings in the stock market. Volatility spiked last week to its highest since the onset of Covid-19 after a soft jobs report and ...

Key TakeawaysShake Shack's earnings earlier this week showed its sales surged from a year ago.A number of its burger-selling rivals like McDonald's, however, have struggled with customers pulling back on spending and introduced value meals to drive sales in recent months.Shares of Shake Shack have climbed along with its sales, up 30% from the start of the year through Friday's close, while shares of McDonald's, Wendy's, and Burger King parent Restaurant Brands International slumped.Analysts and Shake Shack ...

Shake Shack Inc. (SHAK) posted decent second-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis. During the quarter, the company benefited from product innovations, strategic menu pricing, technology implementations and promotions.Looking ahead, SHAK is committed to achieving efficiency across regions and formats by utilizing drive-throughs and third-party delivery. The company plans t ...

[Part I – FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for the period ended June 26, 2024, show total assets increased to $1.66 billion, total revenue for the second quarter grew to $316.5 million, and net income reached $10.4 million, with operating cash flow increasing to $84.2 million for the first twenty-six weeks [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 26, 2024, total assets increased to $1.66 billion, driven by a rise in cash and cash equivalents to $301.8 million, while total liabilities grew to $1.18 billion, primarily due to increases in long-term operating lease liabilities and tax receivable agreement liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 26, 2024 | December 27, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $301,838 | $224,653 | | Total current assets | $345,680 | $334,432 | | Property and equipment, net | $545,225 | $530,995 | | Operating lease assets | $419,527 | $398,296 | | **TOTAL ASSETS** | **$1,661,758** | **$1,605,857** | | **Liabilities & Equity** | | | | Total current liabilities | $168,088 | $164,067 | | Long-term debt | $246,160 | $245,636 | | Long-term operating lease liabilities | $487,600 | $464,533 | | Liabilities under tax receivable agreement | $246,878 | $235,613 | | **Total liabilities** | **$1,175,393** | **$1,136,487** | | **Total equity** | **$486,365** | **$469,370** | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the thirteen weeks ended June 26, 2024, total revenue increased 16.5% year-over-year to $316.5 million, with income from operations more than doubling to $10.8 million, and net income attributable to Shake Shack Inc. rising to $9.7 million, or $0.23 per diluted share Income Statement Summary - Thirteen Weeks Ended (in thousands) | Metric | June 26, 2024 | June 28, 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $316,496 | $271,805 | 16.5% | | Shack Sales | $305,480 | $261,810 | 16.7% | | Income from Operations | $10,782 | $4,748 | 127.1% | | Net Income | $10,382 | $7,223 | 43.7% | | Net Income Attributable to Shake Shack Inc. | $9,668 | $6,948 | 39.2% | | Diluted EPS | $0.23 | $0.16 | 43.8% | Income Statement Summary - Twenty-Six Weeks Ended (in thousands) | Metric | June 26, 2024 | June 28, 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $607,000 | $525,083 | 15.6% | | Shack Sales | $586,032 | $506,064 | 15.8% | | Income from Operations | $10,816 | $1,559 | 593.8% | | Net Income | $12,596 | $5,601 | 124.9% | | Net Income Attributable to Shake Shack Inc. | $11,708 | $5,414 | 116.2% | | Diluted EPS | $0.28 | $0.13 | 115.4% | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the twenty-six weeks ended June 26, 2024, net cash provided by operating activities increased to $84.2 million, investing activities provided $0.4 million, and financing activities used $7.5 million, resulting in a period-end cash balance of $301.8 million Summary of Cash Flows - Twenty-Six Weeks Ended (in thousands) | Activity | June 26, 2024 | June 28, 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $84,210 | $62,191 | | Net Cash Provided by (Used in) Investing Activities | $428 | ($85,415) | | Net Cash Used in Financing Activities | ($7,452) | ($3,596) | | **Increase (Decrease) in Cash** | **$77,185** | **($26,824)** | | **Cash at End of Period** | **$301,838** | **$203,697** | [Management's Discussion and Analysis (MD&A)](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a 16.7% increase in Shack sales for Q2 2024, driven by new stores and higher menu prices, with same-Shack sales growing 4.0%, while liquidity remains strong with $301.8 million in cash [Overview and Key Metrics](index=29&type=section&id=Overview%20and%20Key%20Metrics) For Q2 2024, Same-Shack sales increased 4.0%, driven by a 4.8% price/mix increase, while system-wide sales grew 13.5% to $483.7 million, and digital sales, representing 34.4% of Shack sales, increased 20.9% Key Operating Metrics - Q2 2024 vs Q2 2023 | Metric | Q2 2024 | Change vs. Q2 2023 | | :--- | :--- | :--- | | Same-Shack Sales Growth | 4.0% | - | | - Price Mix | 4.8% | - | | - Guest Traffic | (0.8)% | - | | System-wide Sales | $483.7M | 13.5% | | Digital Sales | $105.1M | 20.9% | | Average Weekly Sales | $77,000 | Flat | [Development Highlights](index=30&type=section&id=Development%20Highlights) In Q2 2024, the company expanded its footprint by opening 12 new Company-operated Shacks and 11 new licensed Shacks, bringing the total system-wide Shack count to 547 as of June 26, 2024 - Opened **12 new Company-operated** and **11 new licensed Shacks** in Q2 2024[139](index=139&type=chunk) - Total system-wide Shacks reached **547** as of June 26, 2024 (**311 Company-operated**, **236 licensed**)[140](index=140&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) In Q2 2024, Shack sales rose 16.7% to $305.5 million, primarily from new store openings, with food and paper costs improving to 27.8% of sales, while other operating expenses increased to 14.4% of sales due to higher marketing and delivery costs, leading to a surge in income from operations to $10.8 million Shack Sales Analysis - Q2 2024 | Metric | Amount | % Change YoY | | :--- | :--- | :--- | | Shack Sales | $305.5M | 16.7% | | Contribution from New Shacks | $32.1M | - | | Contribution from Menu Prices | $18.3M | - | Shack-Level Expense Ratios - Q2 2024 vs Q2 2023 | Expense Category | % of Shack Sales (Q2 2024) | % of Shack Sales (Q2 2023) | | :--- | :--- | :--- | | Food and paper costs | 27.8% | 29.0% | | Labor and related expenses | 28.4% | 28.7% | | Other operating expenses | 14.4% | 13.8% | | Occupancy and related expenses | 7.6% | 7.6% | - General and administrative expenses increased **15.4% to $36.3 million** in Q2 2024, primarily due to increased investments in marketing and higher wages to support growth[163](index=163&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) For Q2 2024, Restaurant-level profit was $67.1 million, with a margin of 22.0% of Shack sales, and Adjusted EBITDA increased to $47.2 million, with the margin expanding to 14.9% of total revenue Restaurant-Level Profit Reconciliation (in thousands) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Income from operations | $10,782 | $4,748 | | **Restaurant-level profit** | **$67,079** | **$54,942** | | Shack sales | $305,480 | $261,810 | | **Restaurant-level profit margin** | **22.0%** | **21.0%** | Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net income | $10,382 | $7,223 | | **Adjusted EBITDA** | **$47,209** | **$37,050** | | Total revenue | $316,496 | $271,805 | | **Adjusted EBITDA margin** | **14.9%** | **13.6%** | [Liquidity and Capital Resources](index=42&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of June 26, 2024, the company's primary liquidity sources included $301.8 million in cash and cash equivalents and an undrawn $50.0 million revolving credit facility, with net cash from operations at $84.2 million for the first half of 2024 - Primary liquidity sources are cash from operations and a cash balance of **$301.8 million** as of June 26, 2024[200](index=200&type=chunk) - The company has a **$50.0 million revolving credit facility**, which was undrawn as of June 26, 2024[211](index=211&type=chunk) - Obligations under the Tax Receivable Agreement totaled **$246.9 million**, contingent on future taxable income[203](index=203&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its exposure to market risks since its Annual Report on Form 10-K for the fiscal year ended December 27, 2023 - No material changes to market risk exposure have occurred since the 2023 Annual Report on Form 10-K[217](index=217&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were ineffective as of June 26, 2024, due to a material weakness in internal control over financial reporting related to state deferred taxes, with remediation efforts actively underway - Disclosure controls and procedures were concluded to be **ineffective** as of June 26, 2024[219](index=219&type=chunk) - The ineffectiveness is due to a material weakness identified in fiscal 2023 related to the calculation of state deferred taxes and related income tax expense[220](index=220&type=chunk) - Remediation efforts are underway, including hiring a new Head of Tax, using third-party consultants, and developing enhanced management review controls[222](index=222&type=chunk) [Part II – OTHER INFORMATION](index=46&type=section&id=Part%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings in the ordinary course of business, which are generally covered by insurance, and as of June 26, 2024, the ultimate liability from these matters was not considered material - Information regarding legal proceedings is incorporated by reference from Note 13 of the financial statements[225](index=225&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 27, 2023 - No material changes to risk factors have occurred since the 2023 Annual Report on Form 10-K[226](index=226&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) On August 2, 2024, the company amended the employment agreements for CEO Robert Lynch and CFO Stephanie Sentell to correct the maximum bonus opportunity, aligning them with previously agreed-upon terms - Employment agreements for CEO Robert Lynch and CFO Stephanie Sentell were amended on August 2, 2024, to correct the maximum bonus opportunity calculation[227](index=227&type=chunk) [Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to executive employment agreements, certifications by the CEO and CFO, and XBRL data files - Key exhibits filed include amendments to the employment agreements for Robert Lynch (Exhibit 10.2) and Stephanie Sentell (Exhibit 10.4)[228](index=228&type=chunk) - Certifications from the Principal Executive Officer (31.1) and Principal Financial Officer (31.2) pursuant to Section 302 of the Sarbanes-Oxley Act are included[228](index=228&type=chunk)

The broader stock market is causing investors a little pain to start the month of August, as the S&P 500 is declining by as much as 0.75%. The NASDAQ is lowering by over 1%, despite the Federal Reserve (the Fed) announcing that an interest rate cut is on the table for September 2024 and the CME’s FedWatch tool pricing in an over 90% probability of this happening; markets are selling off.Shake Shack TodaySHAKShake Shack$102.41 +14.79 (+16.88%) 52-Week Range$52.79▼$111.29P/E Ratio186.20Price Target$99.26Add t ...

Key TakeawaysShake Shack beat quarterly profit and sales estimates on higher prices.The burger-and-milkshake chain reported same-store sales up 4%, higher than expected.Shake Shack predicted it would have positive free cash flow for the year, the first time since 2017. Shake Shack (SHAK) shares skyrocketed after the company posted better-than-anticipated results and gave an upbeat forecast as it benefited from higher prices.  The burger-and-milkshake chain reported second-quarter adjusted earnings per share ...