Is Shake Shack Losing The Burger Wars?
By Carlton Wilcoxson • March 9, 2016
Shake Shack (SHAK) shares got shellacked (alliteration is fun!) on Tuesday, plunging 11% after the company said it expected sales growth to slow dramatically this year. The burger joint reported late Monday that same-store sales (or same Shack sales as the company oh-so-cutely calls them) may increase just 2.5% to 3.5% in 2016. That’s down from the 11% growth rate it reported for the fourth quarter of 2015. Wall Street was not happy. Five of the 10 analysts covering the company cut their price targets according to FactSet Research. Shake Shack took Wall Street by storm last year, selling itself as a higher quality alternative to the likes of McDonald’s (MCD), Burger King, Wendy’s (WEN), Sonic (SONC) and other fast food burger joints. The company went public in late January of 2015 and was an immediate hit. The stock more than doubled on its first day of trading. But Shake Shack has cooled off since then.