Shake Shack Inc (SHAK) Stock Price Tumbles 6% After Post-IPO Earnings Disappoint

Shares of Shake Shack Inc. (NYSE:SHAK) tumbled more than 6 percent in after-hours trading Wednesday following the fast-casual burger chain’s earnings debut. The company warned of slowing same-store sales growth in 2015 after posting a loss for the October-December quarter on the heels of its initial public offering in January.

Shake Shack reported a fiscal fourth quarter net loss, down 4.1 percent, to $1.4 million, or a loss of 5 cents per share. Meanwhile, revenue increased 52 percent to $34.8 million for the period ended Dec. 31. That compares with a profit of $997,000, or earnings per share of 3 cents, on sales of $22 million during the same period in 2013. Shake Shack attributed the net loss during the fourth quarter to a $1.1 million after-tax charge related to its IPO.

Revenue came in slightly above Wall Street expectations of $33 million, according to analysts polled by Thomson Reuters.

Near-term, the company plans to open at least 10 domestic stores annually, with the goal of doubling its domestic footprint in three years, and tripling its store count in five years. “As a result of our successful IPO, we have the financial flexibility to support our robust expansion plans,” Randy Garutti, chief executive officer of Shake Shack, said in a statement Wednesday. “Long-term, we see the potential for at least 450 domestic company-operated Shacks.”

There currently are 63 Shake Shacks worldwide in nine countries and 34 cities, including Dubai, Istanbul, London and Kuwait. There are 31 U.S. company-operated Shacks, seven in Manhattan and 24 elsewhere. Shack sales, which represent combined sales of food and beverages in domestic company-operated Shacks, increased 52 percent to $33.1 million. Same-store sales, which includes 13 of the company’s restaurants that have been open for 24 months or longer during the fourth quarter, rose 7.2 percent from a year ago.

The company said it expected same-store restaurant sales in 2015 to grow in the low single digits, and total revenue to be between $159 million and $163 million. For the company's fiscal 2014 year, the burger joint posted a profit of $2.1 million, or 7 cents per share, as total revenue rose 43.7 percent to $118.5 million.

Shares of Shake Shack soared more than 118 percent during its first day of trading in January. The burger joint’s stock opened at $47 during its first day of trading Jan. 30, more than doubling its IPO price of $21. As of the close of trading Wednesday, Shake Shack is now valued at $1.73 billion.

Following the company’s earnings announcement, shares of Shake Shack dropped more than 6 percent to as low as $43.63 in after-hours trading.