Shake Shack Inc. SHAK posted mixed fourth-quarter fiscal 2024 results, wherein earnings beat the Zacks Consensus Estimate while revenues missed the same. However, the top and bottom lines increased on a year-over-year basis.
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The quarter’s performance improved year over year attributable to growing sales volume and enhanced operations. Furthermore, increased company-operated and licensed store openings on a global scale, accompanied by other strategic initiatives to expand margins, aided the quarter’s growth.
Moving forward into 2025, the company aims to strategically focus on opportunities to grow its sales and expand profit margins.
Following the results, SHAK stock moved up 11.3% during Thursday’s trading hours. Investors’ sentiments are likely to have been boosted by the 2025 guidance indicating growth trends across a few key metrics.
SHAK’s Earnings & Revenue Details
The company’s adjusted earnings per share (EPS) of 26 cents topped the Zacks Consensus Estimate of 25 cents by 4%. In the prior-year quarter, the company reported adjusted an EPS of two cents.
Quarterly revenues of $328.7 million marginally missed the consensus mark of $329 million by 0.1%. However, the top line increased 14.8% on a year-over-year basis.
Shake Shack, Inc. Price, Consensus and EPS Surprise
Shake Shack, Inc. price-consensus-eps-surprise-chart | Shake Shack, Inc. Quote
Same-Shack sales increased 4.3% year over year compared with 2.8% growth in the previous year’s quarter. Our estimate for the metric is on par with the reported value
Shack sales rose 14.7% year over year to $316.6 million. We expected the metric to be $318.1 million.
Licensing revenues increased year over year to $12.1 million from $10.5 million. Our anticipated value for the metric is at par with the reported value. Shack system-wide sales rose 13.3% year over year to $500.7 million.
Operating Highlights of SHAK
In the fiscal fourth quarter, operating income was $10.2 million against a loss of $1.3 million reported in the prior-year quarter. Restaurant-level profit margin was 22.7%, up 290 basis points (bps) year over year.
The food and paper costs (as percentages of company revenues) contracted 110 bps year over year to 28%. Labor and related costs (as percentages of company revenues) also reduced 160 bps year over year to 26.9%.
Total expenses in the quarter were $318.5 million compared with $287.5 million in the prior-year quarter. Our estimate for the metric was $319.9 million.
Adjusted EBITDA in the quarter amounted to $46.7 million, up from $31.4 million in the year-ago quarter. Adjusted EBITDA margin expanded 320 bps year over year to 14.2%.
Shake Shack’s 2024 Numbers
The company registered full-year revenues of $1.25 billion, up from $1.09 billion reported in 2023. Same-Shack sales were up 3.6% compared with 4.4% growth reported last year. Shack system-wide sales in 2024 rose 13% year over year to $1.92 billion.
Adjusted EBITDA was up year over year to $175.6 million from $131.8 million. Adjusted EBITDA margin also grew 190 bps year over year to 14%.
SHAK’s full-year adjusted EPS was 92 cents compared with 37 cents reported in 2023.
Balance Sheet of SHAK
As of Dec. 25, 2024, Shake Shack’s cash and cash equivalents totaled $320.7 million compared with $224.7 million as of Dec. 27, 2023. Long-term debt at the end of the fiscal fourth quarter was $246.7 million compared with $245.6 million as of Dec. 27, 2023.
SHAK Reveals Q1 & Fiscal 2025 Outlook
For first-quarter fiscal 2025, the company expects total revenues to be between $326.5 million and $330.9 million. Licensing revenues are projected in the range of $10.5-$10.9 million. The company anticipates the restaurant-level profit margin to be between 20% and 20.5%.
For fiscal 2025, the company expects revenues to be in the range of $1.45-$1.48 billion. Licensing revenues are projected in the range of $49-$51 million. Restaurant-level profit margin is projected to be about 22%. SHAK expects adjusted EBITDA to be in the range of $205-$215 million.
SHAK expects approximately 45 company-operated openings in fiscal 2025. It also anticipates approximately 35-40 licensed Shack openings at the same time.
Three-Year Financial Targets by SHAK
Total revenue growth is expected in the low teens percentage, with the restaurant-level profit margin expected to be about 22%.
System-wide unit growth is expected to be in the low teens percentage. Adjusted EBITDA is expected to grow in the range of low-mid-teens percentage.
SHAK’s Zacks Rank & Recent Retail-Wholesale Releases
Shake Shack currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Restaurant Brands International, Inc. QSR reported fourth-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
During the quarter, consolidated comps increased 2.5% year over year and net restaurants grew 3.4% year over year. Global system-wide sales rose 5.6% year over year. QSR unveiled its long-term consolidated performance expectations from 2024 to 2028. It anticipates achieving more than 3% growth in comparable sales and at least 5% net restaurant growth.
McDonald's Corporation MCD reported fourth-quarter 2024 results, wherein earnings were in line with the Zacks Consensus Estimate but revenues missed the same. Both the top and bottom lines decreased year over year. Its Accelerating-the-Arches strategy remains the right approach for expanding market share.
At company-operated restaurants, sales were $2.31 billion, down 7% year over year. Sales at franchise-operated restaurants amounted to $3.95 billion, which increased 2% year over year. The global comps increased 0.4% compared with 3.4% growth in the prior-year quarter. MCD’s comps increased after witnessing a decline in the preceding two quarters.
YUM! Brands, Inc. YUM reported fourth-quarter 2024 results, with adjusted earnings and total revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
The company’s top-line performance reflected solid contributions from the KFC, Pizza Hut and Taco Bell divisions. It reported progress in the digital space, with digital sales rising approximately 15% and the digital mix surpassing 50%, moving closer to its long-term goal of 100% digital sales. Worldwide system sales — excluding foreign currency translation — grew 8% year over year, with Taco Bell increasing 14% and KFC rising 6%. The metric rose 3% year over year for Pizza Hut.
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