(Jan 12): Shake Shack Inc shares tumbled after the burger chain reported preliminary fourth-quarter (4Q) sales below Wall Street estimates, another sign of struggles in the fast-casual restaurant sector.
Preliminary revenue in the last three months of the year was US$400.5 million, below the US$409 million average estimate of analysts surveyed by Bloomberg. Shake Shack blamed inclement weather in the northeast US for keeping diners away during the last six weeks of the year.
The results are likely to add to concerns that fast-casual eateries are set for another challenging year. Consumers, weighed down by higher prices and weakness in the job market, pulled back on dining out in 2025. Chains have been faced with slack consumer demand due to unfavourable weather and a challenging flu season, while limited-time offers and discounts have also increased pressure on the industry’s profits.
Shake Shack shares fell 4.6% at 7.24am in early New York trading. The stock declined 37% last year while the S&P Small Cap 600 Index rose 4.2%.
Sales from established locations increased 2.1% in 4Q, in-line with analyst estimates, the company said in a statement on Monday.
Chief executive officer Rob Lynch had warned of headwinds going into October during the third-quarter earnings call.
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The burger chain fared relatively better than some of its peers last year, recording growth in each quarter. Chipotle Mexican Grill Inc and Sweetgreen Inc both saw weakness in foot traffic and sales in 2025, leading them to lower sales expectations multiple times last year.
Cava Group Inc and Wingstop Inc cut their outlooks during the most recent reporting period, citing weakness among younger restaurant goers.
Shake Shack provided preliminary results ahead of its presentation at the ICR Conference taking place this week in Orlando. The company is expected to report full 4Q results around Feb 20.
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