Home / Market News / Shake Shack shares slip after preliminary Q2 sales fall short of expectations

Shake Shack shares slip after preliminary Q2 sales fall short of expectations

Shake Shack Inc. stock fell 2.7% in Tuesday premarket trading after the burger chain announced preliminary second-quarter sales that missed expectations. Shake Shack said sales totaled $91.8 million for the quarter ending June 24, below the FactSet consensus for $101.0 million. The company took a $3.2 million hit from closures and reduced operating hours due to protests and curfews. Same-restaurant sales sank 49% with traffic down 60.1%. The FactSet consensus was for a 43.6% decline. Shake Shack is scheduled to announced second-quarter earnings on August 11. Shake Shack has seen weekly sales increase, kicking off the third quarter with sales of $58,000 and same-restaurant sales falling 39% for the week ending July 1. Digital accounted for about 60% of sales for the week ending July 1. Same-restaurant sales are “acutely impacted” by a slow recovery in New York City, one of the company’s most important regions. New York City accounted for 20% of the company’s sales in the first quarter before the coronavirus, Shake Shack said. The company has reduced its weekly cash burn to $200,000 per week, repaid $50 million borrowed from its revolving credit facility on June 22 and has $184 million in cash marketable securities on hand as of July 6. Shake Shack has restarted its efforts to expand globally. The company had halted growth due to COVID-19, opening four locations in California, Charlotte, NC, and St. Louis, MO during the second quarter. Shake Shack stock has fallen 10.3% for the year to date while the S&P 500 index is down 1.6% for the period.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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