Key facts
- Shake Shack shares fell 11% to their lowest level since November 2023.
- The company cut its second-quarter revenue guidance to $415 million-$420 million.
- Same-Shack sales growth forecast was reduced to 2.5%-3%.
- Restaurant-level operating margin is now expected to be 22%-23%.
- Baird analyst David Tarantino views the new outlook as incrementally negative.
Shake Shack shares plunged 11% on Tuesday, reaching their lowest point since November 2023, following the company's decision to slash its second-quarter guidance. The burger chain now expects total revenue between $415 million and $420 million, a reduction from its previous forecast of $424 million to $428 million. Same-Shack sales growth is now projected at 2.5% to 3%, down from the earlier 3% to 5% range. The restaurant-level operating margin is anticipated to be between 22% and 23%, compared to a prior estimate of 24.2%. Baird analyst David Tarantino described the revised outlook as 'incrementally negative,' suggesting that the new Chief Financial Officer, Michelle Hook, may have aimed to set a more achievable bar. The downgrade adds to concerns about margin compression due to rising input costs and potential consumer pullback on higher-priced items.