Why is Shake Shack (SHAK) Plunging Today?
Shares of Shake Shack SHAK dropped sharply in Tuesday trading on worse-than-expected Q4 results. SHAK fell as much as 17% to $61.65. The New York-based fast casual burger chain said same-store sales fell 3.6%; analysts were expecting comps to fall 2.9%.
Profitability was hurt by higher food and paper costs and an increase in beef and dairy costs during the quarter, but soft growth in delivery also hurt the company’s performance. Shake Shack is in the middle of shifting to a sole partnership with Grubhub GRUB.
Looking at 2020, targets lagged Wall Street estimates. Shake Shack expects revenue in the range of $712 million to $720 million and same-store sales to decline in the low single digits. The Street was looking for revenue of $745.5M and comps +0.7%
Shares gained 31% in 2019 and are now up around 7% this year
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