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Have Shake Shack’s Revenues Impressed Investors?

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Feb. 2 2015, Updated 10:29 a.m. ET

Shake Shack’s revenues

In the last part of this series, we looked at Shake Shack’s (SHAK) menu. We also discussed how it’s positioning itself in the highly competitive and fragmented restaurant industry. Now, we’ll discuss how its fine-casual concept strategy translated into revenues.

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Revenue growth

In 2010, Shake Shack (SHAK) had $19.5 million in revenues. Its revenues grew to $83 million over the four years ending in 2013. That’s a compound annual growth rate, or CAGR, of 43%. For the 39 weeks, or three quarters, ending on September 24, 2014, Shake Shack’s revenues were $84 million—compared to $60 million for the 39 weeks ending on September 25, 2013.

In just three quarters in 2014, Shake Shake earned what it made for all of 2013. As a result, Shake Shack is expected to have solid double-digit growth in 2014.

High growth rate

Shake Shack’s high growth rate shouldn’t be a surprise. Younger companies—like Shake Shack and The Habit (HABT)—usually have high growth as they begin to expand their footprint in the market. Shake Shack only has 63 restaurants in its units—compared to larger restaurant chains like McDonald’s (MCD), KFC under the umbrella of Yum! Brands (YUM), and Popeye’s (PLKI).

Shake Shack is a small and growing restaurant chain—compared to the larger restaurants mentioned above. Most of the companies are part of the Consumer Discretionary Select Sector SPDR (XLY).

In the next part of this series, we’ll breakdown Shake Shack’s business models. We’ll also look at the business models’ revenues.

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