Shake Shack’s Fourth Quarter Sales Outlook Boosts Stocks to Double Digits

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Shake Shack Inc. SHAK, + 8.67% shares were up more than 7% on Wednesday and 19.4% so far this week after the burger chain issued a fourth-quarter trade update that it expects to sales exceed those of Street. Shake Shack’s preliminary fourth-quarter sales totaled $ 157.5 million, above FactSet’s consensus of $ 153.2 million. Same-store sales fell 17.4%, but that was better than the FactSet consensus for a 19.5% decrease.

Same-store sales in the suburbs were flat from 2019, but same-store sales in urban areas fell 31%, with Manhattan plummeting 49% during the quarter. But digital channels performed well, accounting for 59% of sales and more than tripling year-over-year. Shake Shack executives spent their presentation at this year’s ICR Conference discussing the future. See: McDonald’s enjoying analyst optimism in 2021, while some analysts see a tough road for pizza chain customers that it can acquire with continued use of digital tools. “Given the short-term momentum and long-term focus, we were not surprised by his optimistic tone and we believe there are interesting initiatives at play, which could serve as positive catalysts,” wrote Brett Levy in a note to MKM Partners. Given the short-term challenges, MKM maintained its neutral equity rating. However, MKM raised its price target to $ 85 from $ 65. Analysts at BTIG called Shake Shack’s previous announcement “the most impressive” ever to have aired for the conference. BTIG rates Shake Shack’s shares as neutral. Analysts led by Peter Saleh said investors are looking to the long term after a difficult end to 2020, although the Shake Shack figures “bucked the trend.” “While restaurant sales trends have clearly weakened in the past two months with more capacity constraints, investors are looking beyond short-term challenges in hopes of being rewarded with more efficient business models afterward. from this disruption, “analysts said. Don’t Miss: Chipotle’s drive-thru lanes could clear the way for a breakfast menu. Although challenges remain, Shake Shack CFO Tara Comonte was upbeat during the presentation. “So 2020 was the pivotal year for us in terms of developing and bringing some of these capabilities to market. We transform the business to a high level of digital mix, ”Comonte said, according to a FactSet transcript. “But now we are going to take advantage of it. We’re just starting here. “Shack Shack shares have soared 81% over the past year. The S&P 500 SPX Index, + 0.20% is up 15.8% over the period.