Shake Shack says a key sales figure declined 2.5 percent in the first quarter as customer traffic fell.
The New York-based burger company also lowered its sales forecast for the year, saying it now expects sales at established locations to be flat, down from its previous guidance for growth of 2 to 3 percent. Its shares fell nearly 8 percent to $30.57 in after-hours trading.
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Sales at established stores are a key indicator because it strips out the volatility of newly opened and closed locations. Shake Shack Inc. noted that it only has 32 stores in its same-store sales base, and that most of them are in the Northeast, which was affected by cold weather during the quarter. It also cited an unfavorable shift in the calendar compared with last year's quarter, when same-store sales rose 9.9 percent.
At the end of the first quarter, the company said there were 127 Shake Shack locations, including 78 in the United States.
Shake Shack noted that new store openings helped drive up overall revenue by 42 percent to $76.7 million, which was more than Wall Street expected. Profit for the period ended March 29 was $2.3 million, or 9 cents per share. Adjusted for non-recurring costs, it earned 10 cents per share, which was 2 cents better than Wall Street expected, according to Zacks Investment Research.
Shake Shack expects full-year revenue in the range of $351 million to $355 million.
In the final minutes of regular trading on Thursday, shares hit $33.16, a decline of roughly 4 percent in the last 12 months.
Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on SHAK at https://www.zacks.com/ap/SHAK
Keywords: Shake Shack, Earnings Report