By Sanskriti Shekhar
May 7 (Reuters) – Shake Shack shares tumbled 30% on Thursday, and were heading for their worst day ever after the burger chain swung to a quarterly loss, hit by higher beef costs and weak consumer spending.
The company also named Michelle Hook as its new CFO, effective May 11.
• Shares of the fast food chain operator were down as much as 30.4% at $67.21, their lowest since January 2024.
• Several other fast food chains including McDonald’s, Domino’s and Papa John’s have reported weaker quarterly sales growth, signaling pressure on customer spending from rising gasoline prices driven by the Iran war.
• Companies like Chipotle Mexican Grill and Restaurant Brands International have also flagged rising beef prices, which have set records due to dwindling U.S. cattle supplies.
• Shake Shack executives said on a post-earnings call that the company’s short-term results have been and will continue to be impacted by the ongoing war in the Middle East.
• “We are seeing broader signs of consumer strain across restaurants, and it will be important to watch how the company navigates elevated beef costs going forward,” said Michael Gunther, SVP at Consumer Edge.
• Hook, former CFO of Portillo’s, replaces Katherine Fogertey as Shake Shack’s CFO. Fogertey stepped down from the role in early March.
• The leadership change comes as Shake Shack reported a quarterly loss per share of 1 cent, compared with a profit of 11 cents a year ago.
• The burger chain reported adjusted profit of $ 0.002 per share, missing estimates of 12 cents per share.
• Shake Shack posted first-quarter revenue rose 14.3% to $366.7 million, but missed analysts’ estimate of $371.9 million, according to data compiled by LSEG.
(Reporting by Sanskriti Shekhar in Bengaluru; Editing by Shailesh Kuber)
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