Shake Shack Inc SHAK shares are on the rise after the company unveiled its impressive performance in the fourth quarter of FY23.
Generating sales of $286.2 million, the company exhibited a 20% year-over-year growth, surpassing the analyst consensus estimate by a considerable margin.
System-wide sales soared by 21.4% and Same-Shack sales saw a healthy increase of 2.8%. Moreover, the company reported a notable operational victory by turning its $(6.3) million loss from the previous year into a mere $(1.3) million loss.
The adjusted EBITDA for the quarter stood at an impressive $31.4 million, escalating from $19.6 million in the prior year, with the margin expanding from 8.2% to 11.0%.
The adjusted pro forma EPS not only met but exceeded expectations by reaching $0.02 for the quarter, setting a new positive trajectory for the company.
Going beyond financials, Shake Shack also expanded its horizons. It opened 15 new domestic company-operated Shacks and 9 new licensed Shacks, including international locations in Mexico and Thailand.
Ending the year on a remarkable note, the company held a substantial $293.2 million in cash and cash equivalents as of December 27, 2023, with operating cash flow totaling an impressive $132.1 million for the year.
Outlook: Looking ahead to FY24, the company projects revenue of $1.21 billion-$1.25 billion, demonstrating optimistic growth plans.
For Q1, the company anticipates revenue in the range of $288.4 million-$292.8 million, with Shake Shack level operating margin expected to be between 19% and 19.50%.
The company has set its sights on opening 80 new Shacks system-wide, with 40 domestic company-operated and 40 licensed outlets in FY24.
Also Read: This Analyst Sees Opportunities For Shake Shack’s Significant Store Margin Growth, Bumps Up Price Target
In a related development, it was announced last month that Randy Garutti, the Chief Executive Officer of Shake Shack, intends to retire in 2024 after the selection of his successor.
Price Action: Not surprisingly, SHAK shares are up by a staggering 17.73% at $91.91 premarket on the last check Thursday.
Photo via Wikimedia Commons
