SHAK Raises Its Restaurant Development Guidance for 2016


May. 17 2016, Updated 10:10 a.m. ET

Unit growth

Now that we’ve discussed Shake Shack’s (SHAK) same-store sales growth, it’s time to discuss another key revenue driver for SHAK: unit growth.

SHAK Raises Its Restaurants Development Guidance for Fiscal 2016

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Shake Shack

Currently, SHAK operates 47 company-owned restaurants, five domestic franchised restaurants, and 36 international franchised restaurants. In the last 12 months, the company has increased its overall unit count by 22 units, adding 13 company-owned restaurants and nine franchised restaurants.

In 1Q16, the company added three company-owned restaurants, including two in Arizona—one in Scottsdale and one in Phoenix. The third restaurant was added in West Hollywood, California. The company added one franchised restaurant in 1Q16, its first restaurant at the City Center in Muscat, Oman.

Peer comparison

In 1Q16, Panera Bread (PNRA) and Chipotle Mexican Grill (CMG) added 25 units and 58 units, respectively. Jack in the Box (JACK) closed two of its franchised restaurants during the same period.


SHAK, which forms 0.01% of the holdings of the iShares Russell 2000 ETF (IWM), has increased its 2016 guidance for the development of company-owned restaurants from 13 to 16.

The company opened a company-owned restaurant at Fashion Center at Pentagon City in Washington D.C. Moving to licensed restaurants in April, SHAK opened its domestic franchised restaurant at the T-Mobile Arena in Las Vegas.

Internationally, the company opened its first restaurant at City Center in Bahrain and its second location in the Ebisu district in Tokyo.

Analysts expect the company’s unit count to reach 107 by the end of 2016. This means that they expect SHAK to add 19 restaurants overall in the remainder of 2016.

After discussing revenue and revenue drivers, in the next article, we’ll discuss EBITDA (earnings before interest, tax, depreciation, and amortization) margins.


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