Shake Shack (SHAK) reported its 1Q16 earnings on May 12, 2016, after the Market closed. The New York–based American fine casual restaurant chain reported 1Q16 revenue of $54.2 million and adjusted EPS (earnings per share) of $0.08.
SHAK’s 1Q16 revenue represented a rise of 43.3% over 1Q15, while its adjusted EPS represented a rise of 100%.
Analysts had estimated SHAK’s 1Q16 revenue to be $52.2 million and its adjusted EPS to be $0.05. SHAK’s better-than-expected results pushed the its share price up by 9.3%. However, year-to-date, SHAK’s share price was still trading at a discount of 5.5%. Investors’ skepticism over its growth prospectus led to fall in its share price.
Since the beginning of 2016, SHAK’s peers Panera Bread (PNRA), Chipotle Mexican Grill (CMG), and Jack in the Box (JACK) returned 7.9%, -5.7%, and -2%, respectively. During the same period, the broader comparative index, the Guggenheim S&P 500 Pure Growth ETF (RPG), fell by 2%. RPG has 44% of its holdings in travel and restaurant companies.
In this series, we’ll discuss SHAK’s 1Q16 performance. We’ll compare it with the company’s performance during the same quarter last year. We’ll also explore the factors that could drive SHAK’s revenue in the coming quarters. Finally, we’ll look at the company’s valuation multiple and analysts’ estimates and recommendations.
But first, let’s discuss SHAK’s 1Q16 revenue.