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What’s Expected to Drive Shake Shack’s Revenue in Q2 2018

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Updated

Analysts’ estimates

In the second quarter, analysts expect Shake Shack’s (SHAK) revenue to rise 21.5% YoY (year-over-year) to $111.0 million from $91.3 million. The addition of new restaurants in the last four quarters could boost the company’s revenue.

In Q2 2018, Shake Shack operated 20 more company-owned restaurants, one more domestic licensed restaurant, and 13 more international licensed restaurants than it did in Q2 2017. These new restaurants are expected to drive the company’s revenue.

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Shake Shack is focusing on menu innovations, training employees, implementing technology, and improving customer loyalty to drive its SSSG (same-store sales growth). In the second quarter, the company introduced Veggie Shack locations in New York, California, and Texas, and a barbecue menu as a limited time offering. Shake Shack has been making investments to improve its core financial and operational systems through Project Concrete. The company has been using its mobile app as a key channel to reward loyal customers and provide a more personalized experience. 

In comparison, analysts expect Chipotle Mexican Grill’s (CMG), and Wendy’s (WEN) revenue to rise 7.7% and 27.2%, respectively, in Q2 2018, and McDonald’s (MCD) to fall by 12.0%.

Outlook

Shake Shack expects revenue of $446 million–$450 million and SSSG of 0%–1% this year, and plans to open 32–35 new domestic company-operated restaurants and 16–18 international franchised restaurants. In the next four quarters, analysts expect Shake Shack’s revenue to rise 26.9% YoY to $483.8 million from $381.2 million. Next, we’ll look at analysts’ EPS estimates for SHAK in the second quarter.

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