Shake Shack, the American fast casual restaurant chain, has reported an attributable net income of $2.2 million for the initial quarter (Q1) of 2024, marking a turnaround from a net loss of $1.6 million in Q1 2023.
For the quarter ended on March 27, 2024, total revenue amounted to $290.5 million, representing a 14.7% increase from the $253.28 million reported in the previous year.
System-wide sales increased by 12.3% year-on-year to reach $443.3 million.
The restaurant-level profit saw a notable increase of 22.4%, reaching $54.7 million, up from $44.7 million in Q1 2023.
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The restaurant-level profit margin, calculated as a percentage of the chain’s sales, rose to 19.5% from 18.3% in the previous year.
In the quarter, Shake Shack’s total expenses amounted to $290.47 million, marking a 13.3% increase from the $256.46 million reported in the corresponding period of the previous year.
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the period under consideration amounted to $35.88 million, showing a 30.2% increase compared to the previous year.
Shake Shack’s chief financial officer, Katie Fogertey, remarked, “We established a robust groundwork in the first quarter, aiming to bolster profitable sales and enhance margins in 2024. Our strategy includes targeting a 15% year-on-year revenue growth, expanding restaurant-level profit margins by 120 basic points, and achieving over a 30% year-on-year increase in adjusted EBITDA.”
In the initial quarter, Shake Shack broadened its presence by inaugurating four new company-operated sites, comprising two drive-throughs, along with four new licensed locations.
Moving forward, the company has outlined its plans for the second quarter, aiming to launch 10 company-operated locations and eight to nine licensed locations.
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For the second quarter of the year, the company expects total revenue to range from $308.9 million to $314.3 million, with a restaurant-level profit margin anticipated to fall between 21.5% and 22.0%.
Fogertey further commented, “Our teams are actively implementing our 2024 strategies to enhance the overall guest experience, boost sales, widen restaurant-level profit margins, and reduce construction costs. We aim to achieve a year-on-year sales growth of 12% to 15% and increase adjusted EBITDA to between $160 million and $170 million, representing a rise of 21% to 29%.”
