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Shake Shack shares tumble despite 46% revenue spike in fourth quarter

Published 03/07/2016, 07:11 PM
Updated 03/07/2016, 07:16 PM
© Reuters.  Shares in Shake Shack fell sharply on Monday amid lower than expected same-store sales
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Investing.com -- Shares in Shake Shack Inc (NYSE:SHAK) fell sharply in after-hours trading, even after the popular fast-casual restaurant saw its revenues surge by more than 45% in the final quarter of fiscal year 2015.

Shake Shack, a New York-city based chain, reported net profits of $1.25 million or 0.07 per share, up considerably from losses of $1.42 million or 0.05 per share over the same quarter a year earlier.

At the same time, the restaurant finished with quarterly revenues of $51.1 million, a spike of 46.8% on a year-over-year basis. Shake Shack's operating profit increased 88.1% to $13.9 million, while its Adjusted EBITDA skyrocketed 104.5% for the quarter to $9.9 million.

"We are very proud of what we have been able to accomplish in our first year as a public company. 2015 marked a record year for Shake Shack in nearly all metrics, and we will continue to execute our stated growth strategy and connect with our guests the world over," Shake Shack CEO Randy Garutti said in a statement.

Analysts, though, were more focused on Shake Shack's slowing same-restaurant forecasts for 2016 after comparative sales decelerated last quarter. In the fourth quarter, the company's same-store sales for restaurants that have been opened for 24 months rose by 11%, significantly above forecasts for a 7.3% gain.

Although Shake Shack built on comp-restaurant increases of 7.2% in the fourth quarter of 2013, the sales fell below third quarter gains of 17.1%.

More troubling, the restaurant projected annual same-store sales increases between 2.5 and 3% for 2016, slightly below analysts' expectations of 3.1%.

"Looking ahead, 2016 is shaping up to be another outstanding year with a strong pipeline of new domestic openings, and plans to enter four new markets," Garutti added.

Shares in Shake Shack plunged 3.47 or 8.21% to 38.81 in after-hours trading.

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