Shake Shack Inc. executives credited new store openings, two menu price hikes and increased brand awareness following its Jan. 30 initial public offering for a 56% bump in total revenues.
The New York-based restaurant company, which originated from a hot dog cart in 2001 in Madison Square Park, reported a net loss of $12.7 million for the first quarter ended April 1, which included $13.2 million of after-tax expenses associated with the I.P.O. Adjusted pro forma net income increased 102% to $1.3 million, or 4c per fully exchanged and diluted share, which compared with $600,000, or 2c per fully exchanged and diluted share, in the prior-year period.
Total revenue, including Shake Shack sales and licensing revenue, advanced to $37.8 million from $24.2 million, driven by the addition of 13 domestic company-operated restaurants over the past year and stronger-than-expected same-store sales growth, which increased 12% in the quarter, versus a 3.9% increase in the year-ago period.
Average weekly sales for domestic company-operated restaurants were $89,000, a 7% increase over $83,000 in the prior-year period, due to favorable shifts in sales mix, strong performance from new units opened in the latter half of fiscal 2014 and increased menu prices to offset higher commodity costs.
“I think what we continue to learn about Shake Shack is, Shake Shack is for people who want to understand where their food is from and have a higher expectation of when they go out to get a burger, where they want to get it, and they’re willing to pay a little more for it,” said Randy Garutti, chief executive officer of Shake Shack, during a May 13 earnings call with financial analysts. “We do continue to be really proud about where our pricing is relative to other burgers out there and relative to other fine-casual operators. So we think even after taking that 6% over this last couple of quarters, we’re still really well-positioned with future price opportunities.”
During the quarter, the company opened three domestic company-operated units for a total of 66 restaurants system-wide, including 34 domestic company-operated, 5 domestic licensed and 27 international licensed.
For 2015, the company expects to deliver $161 million to $165 million in total revenue and low- to mid-single-digit same-store sales growth. At least 10 new domestic company-operated Shake Shacks are scheduled to be opened throughout the year, and at least 5 international licensed Shake Shacks are set to open under the company’s current licensing agreements in the United Kingdom and Middle East.