Shake Shack Q3 Earnings & Revenues Beat Estimates, Stock Up

Core Insights - Shake Shack Inc. reported strong third-quarter fiscal 2024 results, with both earnings and revenues exceeding Zacks Consensus Estimates, leading to a 10% increase in share price during pre-market trading [1][3]. Financial Performance - Adjusted earnings per share (EPS) for the third quarter were 25 cents, surpassing the consensus estimate of 20 cents, and up from 17 cents in the prior-year quarter [3]. - Quarterly revenues reached $316.9 million, beating the consensus mark of $315 million, and reflecting a year-over-year increase of 14.7% [3]. - Same-Shack sales grew by 4.4% year over year, compared to 4% growth in the previous quarter, with estimates initially set at 2% [3]. - Shack sales rose 15.1% year over year to $304.9 million, exceeding expectations of $302.6 million [4]. - Licensing revenues increased by 7.1% year over year to $12 million, surpassing the anticipated $11.9 million [4]. - Total expenses for the quarter were $334.9 million, higher than the previous year's $270.6 million and above the estimate of $306.5 million [6]. - Adjusted EBITDA for the quarter was $45.8 million, up from $35.8 million in the year-ago quarter, with an adjusted EBITDA margin expansion of 140 basis points to 14.4% [6]. Operational Highlights - The company experienced an operating loss of $18 million, compared to a gain of $5.7 million in the prior-year quarter [5]. - Restaurant-level profit margin was reported at 21%, an increase of 60 basis points year over year [5]. - Food and paper costs as a percentage of revenues decreased by 90 basis points to 28.2%, while labor costs contracted by 80 basis points to 28% [5]. Balance Sheet - As of September 25, 2024, cash and cash equivalents totaled $310.9 million, up from $224.7 million as of December 27, 2023 [7]. - Total long-term debt was reported at $246.4 million, slightly up from $245.6 million as of December 27, 2023 [7]. Future Outlook - For the fourth quarter of fiscal 2024, the company expects total revenues between $322.6 million and $327 million, with licensing revenues projected between $11.6 million and $12 million [8]. - For the full fiscal 2024, revenues are anticipated to reach $1.25 billion, with licensing revenues expected between $44.6 million and $45 million [9]. - The company projects restaurant-level profit margins to reach 21% for the fiscal year, with adjusted EBITDA expected in the range of $168 million to $170 million [9]. - Approximately 45 company-operated openings and 35-40 licensed Shack openings are anticipated in fiscal 2024 [10].