Shares of Shake Shack fell sharply after the company released quarterly earnings that came in below market expectations amid rising beef prices and unfavorable weather conditions.
The burger chain reported first-quarter revenue of $366.7 million, below analysts’ expectations of $372.5 million. Comparable sales growth reached 4.6%, broadly in line with forecasts.
Shares of the company plunged nearly 30% during Thursday trading—the largest intraday decline in Shake Shack’s history. The stock also fell to its lowest level since January 2024. Before the earnings release, Shake Shack shares had gained 19% since the start of the year, outperforming the S&P Small Cap 600 Index, which had risen about 15%.
In a letter to shareholders, the company said it chose not to raise prices despite beef costs increasing by “low double-digit percentages.” Sales were also pressured by “significant weather impacts” that negatively affected restaurant traffic.
Shake Shack maintained its revenue outlook for the current fiscal year but lowered the bottom end of its EBITDA guidance.
Chief executive Rob Lynch told analysts he remained confident in second-quarter performance. According to Lynch, the launch of a new barbecue rib sandwich has already helped boost sales at the start of the month, while the World Cup is expected to increase customer traffic.
“The markets hosting the World Cup are exactly the markets where Shake Shack already has a strong presence,” Lynch said.
However, TD Cowen analysts led by Andrew Charles warned that the company’s second-quarter comparable sales forecast may prove overly optimistic. In their view, expectations surrounding the World Cup’s impact on consumer activity appear inflated, while comparisons with previous months are set to become increasingly difficult.
Lynch also said that despite weakening consumer sentiment and pressure from prices and costs amid an unstable macroeconomic environment, the company would continue investing in marketing and other areas to build “a foundation for long-term revenue growth.”
Separately, Shake Shack announced the appointment of a new chief financial officer. Michelle Hook will assume the role on May 11 after previously serving as CFO of Portillo’s Inc. Before that, she spent more than 17 years in finance and accounting positions at Domino’s Pizza.