What Happened?
Shares of fast-food chain Shake Shack (NYSE: SHAK) fell 12.9% in the afternoon session after the company reported second-quarter results that beat analyst estimates but provided a weaker-than-expected outlook.
The burger chain posted better-than-expected second-quarter profit and revenue. However, investors looked past the headline numbers and focused on weaker underlying trends. Same-Shack sales, which track revenue from stores open for at least a year, grew 1.8%. This figure missed analyst expectations of 2.2% growth and represented a slowdown from the prior year. Additionally, the company provided a revenue forecast for the third quarter that fell short of Wall Street's estimates, raising concerns about future performance. The disappointing outlook arrived as broader economic reports showed rising inflation, which fueled worries that consumers might cut back on discretionary spending like dining out.
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What Is The Market Telling Us
Shake Shack’s shares are very volatile and have had 27 moves greater than 5% over the last year. But moves this big are rare even for Shake Shack and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 19.4% on the news that the company reported strong second-quarter earnings. Shake Shack blew past analysts' gross margin expectations. Its revenue and EBITDA also outperformed Wall Street's estimates. The results also benefit from the company's expansion drive, as it launched 12 new company-operated Shacks during the quarter. Overall, this was a really good quarter that should please shareholders.
Shake Shack is down 6.7% since the beginning of the year, and at $124.48 per share, it is trading 12.4% below its 52-week high of $142.03 from July 2025. Investors who bought $1,000 worth of Shake Shack’s shares 5 years ago would now be looking at an investment worth $2,562.
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