Shake Shack Inc.’s same-store sales fell 2.5 percent in the first quarter ended March 29, the company said on Thursday. The result marks the first quarterly decline in same-store sales at the popular burger chain since its initial public offering in 2015.
The drop rattled investors. Shake Shack’s stock fell more than 8 percent in after-hours trading Thursday, even though the fast-casual operator beat investors’ expectations for revenue and earnings.
“We are clearly dissatisfied with our [same-store sales] result in Q1,” Shake Shack CEO Randy Garutti said in a statement.
The chain only measures sales from 32 locations to determine same-store sales, he said, which calculates sales changes at older units and is considered a key measure of restaurant performance.
Garutti blamed the results on cold weather and a holiday shift in March.
Shake Shack lowered same-store sales expectations for the year to flat from the 2-percent to 3-percent growth it previously predicted.
Net income rose 55 percent, to $2.3 million, or 9 cents per share, from $1.5 million, or 7 cents per share the previous year.
Revenue increased 41.7 percent, to $76.7 million. Restaurant-level operating profit rose 27 percent, to $18.7 million, or 25.2 percent of restaurant sales.
Shake Shack has been opening restaurants at a rapid pace. The operator opened seven domestic company restaurants in the quarter. Licensees opened another six locations.
Shake Shack expects to open 23 to 24 domestic locations this year. Licensees are expected to develop 12 units, rather than the 11 units that were expected.
“We remain committed to executing our strategy of growing in premier locations, investing in our teams and delivering a great guest experience,” Garutti said.
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