In an impressive display of financial strength, Shake Shack recently announced its second-quarter performance, showcasing stronger-than-expected revenue growth and reiterating its sales guidance for the upcoming fiscal year. For the quarter ending June 26, Shake Shack reported a record revenue of $316.5 million, marking a significant increase from $271.8 million during the same period last year.
Notably, this figure surpassed the consensus estimate of $314.3 million forecasted by analysts on Capital IQ, underscoring the restaurant chain’s robust market presence and operational excellence. The company also achieved a 4% increase in same-store sales, easily surpassing the 3.1% consensus forecast.
Following the announcement, Shake Shack's shares surged by 16% in afternoon trading, reflecting investor confidence in the brand's growth trajectory. Moreover, adjusted earnings per share rose to $0.27, up from $0.18 year-over-year, aligning perfectly with Wall Street expectations. The restaurant-level profit margin also saw an inviting climb, advancing 100 basis points to reach 22%.
Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by an impressive 27% year over year, reaching a remarkable $47.2 million, according to Chief Financial Officer Katie Fogertey. In her letter to shareholders, Fogertey pointed out that these results reflect Shake Shack's progress towards its strategic priorities for 2024, which include enhancing operational efficiencies, bolstering brand awareness, and executing a development pipeline that foresees 23 new Shack openings nationwide.
She emphasized, "Our results showed progress against our 2024 strategic priorities, including improving operations, increasing our brand awareness, and executing on our development pipeline with 23 system-wide Shack openings." Looking forward, Shake Shack has reaffirmed its guidance for same-store sales growth in the low single-digit range for 2024, while also updating its full-year revenue growth expectations to between 14% and 15%.
This marks an increase in the lower-end of the forecast from the previously projected 12% shared in May. Additionally, the company is forecasting adjusted EBITDA in the range of $165 million to $170 million, raised from the lower forecast of $160 million outlined in earlier guidance. The Capital IQ consensus anticipates full-year revenue to reach $1.25 billion. For the third quarter ahead, Shake Shack's guidance suggests revenue between $311.6 million and $317 million, indicating a growth trajectory from the $276.2 million reported in the same quarter of 2023.
Analyst estimates average around $316.2 million for this ongoing period, with the company also projecting low single-digit growth in same-store sales. As of the latest trading session, Shake Shack’s shares stood at $102.06, marking a change of +14.44, representing a notable percent change of +16.48.
Investor optimism surrounding the brand continues to build, paving the way for a promising outlook in the fast-casual dining sector..