Shake Shack said Thursday that it beat first-quarter profit expectations, nudging shares up 1.6%, despite revenue coming up short of the $291 million predicted by FactSet. Still, revenue grew 14.7% to $290.5 million. Net income hit $2.04 million (5 cents per share) up from last year's loss of $1.53 million (4 cents per share) according to a company press release.

"Our first quarter results showed the continued execution of our Strategic Priorities," CEO Randy Garutti wrote in a letter published Thursday to shareholders. "This marks the 13th straight quarter of positive SSS %, with February and March combined traffic improving compared to January levels, and a strong 4.9% SSS in fiscal April."

Garutti, who is retiring by month's end and will serve in an advisory role, said the chain was showing consistent improvement in restaurant-level profit margin.

"I remain ever-optimistic for the future at Shake Shack and am confident this team will continue to thrive," he said.

Chief Financial Officer Katie Fogertey agreed, saying in the letter that the chain will drive profitable sales and expand margins by growing revenue by 15% year-over-year, expanding restaurant-level profit margins by 120 bps and growing Adjusted EBITDA by more than 30% year-over-year.

"Our teams are executing on our 2024 strategies to drive better overall guest experience, grow sales, expand restaurant-level profit margins, and lower build costs as we look to grow sales year-over-year by 12%-15% and Adjusted EBITDA by 21%- 29% to $160 million-$170 million."

Other Q1 highlights include:

  • System-wide sales of $443.3 million, up 12.3%.
  • Same-Shack sales up 1.6% with trends improving each month of the quarter. April SSS grew 4.9% year-over-year.
  • Operating income of $0.0 million, versus an operating loss of $3.2 million in 2023.
  • Restaurant-level profit of $54.7 million, or 19.5% of Shack sales.
  • Net income of $2.2 million versus a net loss of $1.6 million.
  • Opened four locations.

Rob Lynch, the president and CEO of Papa John's International, is replacing Randy Garutti as CEO, effective May 20.

Since the original Shack opened in 2004 in NYC's Madison Square Park, the company has expanded to over 500 locations system-wide, including over 325 in 33 U.S. States and the District of Columbia, and 180 international locations across London, Hong Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo and Seoul.

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