Fast-food chain Shake Shack (NYSE: SHAK) will be reporting earnings this Thursday morning. Here’s what to look for.
Shake Shack missed analysts’ revenue expectations by 2% last quarter, reporting revenues of $320.9 million, up 10.5% year on year. It was a softer quarter for the company, with a miss of analysts’ same-store sales estimates and a miss of analysts’ EBITDA estimates.
Is Shake Shack a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Shake Shack’s revenue to grow 11.7% year on year to $353.4 million, slowing from the 16.4% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.38 per share.
Heading into earnings, analysts covering the company have grown increasingly bearish with revenue estimates seeing 8 downward revisions over the last 30 days (we track 17 analysts). Shake Shack has missed Wall Street’s revenue estimates four times over the last two years.
Looking at Shake Shack’s peers in the restaurants segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Chipotle delivered year-on-year revenue growth of 3%, missing analysts’ expectations by 1.5%, and Kura Sushi reported revenues up 17.3%, topping estimates by 2.5%. Chipotle traded down 13.4% following the results while Kura Sushi was also down 11.8%.
Read our full analysis of Chipotle’s results here and Kura Sushi’s results here.
Investors in the restaurants segment have had fairly steady hands going into earnings, with share prices down 1.2% on average over the last month. Shake Shack is down 2.5% during the same time and is heading into earnings with an average analyst price target of $134.48 (compared to the current share price of $137.12).
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