Can Shake Shack Maintain Upward Momentum with Strong Q1 Results?



Stock performance

Shake Shack (SHAK) is scheduled to report its first-quarter earnings after the market closes on May 2. As of April 26, the company was trading at a stock price of $61.97, which represents a rise of 18.6% since the announcement of its fourth-quarter earnings on February 25. The company is also trading at a premium of 52.4% from its 52-week low of $40.67 and at a discount of 11.6% from its 52-week high of $70.12.

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In the last quarter, Shake Shack posted adjusted EPS of $0.06 on revenues of $124.3 million, beating analysts’ EPS estimate of $0.03 and revenue estimate of $118.8 million. For the quarter, the company has posted SSSG (same-store sales growth) of 2.3%, outperforming analysts’ estimates of a decline of 1.1%. The strong fourth-quarter performance along with investors’ optimism surrounding Shake Shack’s implementation of digital advancements led to a rise in the company’s stock price.

Year-to-date stock price

After returning just 5.1% last year, Shake Shack has had a strong start to 2019. Year-to-date, the company has returned 36.4%, outperforming the broader equity market, where the S&P 500 Index has returned 17.3% during the same period. Shake Shack’s peers Chipotle Mexican Grill (CMG), Wendy’s (WEN), and Jack in the Box (JACK) have returned 56.7%, 20.2%, and -0.4%, respectively, YTD. The broader comparative index, the Consumer Discretionary Select Sector SPDR ETF (XLY), which invests in restaurant and travel companies, has returned 21.9%.


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