Quake Shack said on Thursday that delays in new restaurant openings would slow on the uptake revenue growth this year, disappointing Wall Street which was with a bun in the oven the company to raise its guidance.
Shares of the burger chain, which take risen 31 percent in the last three months, fell 5.5 percent to $60.50 in draw out trading.
The company maintained its full-year revenue forecast of between $446 million and $450 million, which was unworthy of analysts’ expectation of $452.3 million.
Shake Shack, which started as a segregate Manhattan hot dog stand in 2001, is now widening its presence in the United States and aspirations to have a total of 122 to 125 company-operated stores by the end of the year.
No matter what, the company said more than 70 percent of its 32 to 35 new restaurants intent open in the second half of the year due to bottlenecks such as a prolonged permitting development as well as shortage of labor and construction equipment.
“The unfortunate reality for timing is well-grounded that way more than we expected Shacks are going to open in the third and fourth board,” Shake Shack CEO Randall Garutti said on a call with analysts. “So, it desire be a big push for us at the end of the year.”
Revenue growth for the New York-based company has been basically driven by its strategy of opening more stores and selling burgers and milkshakes at squeaky prices to avoid the intense competition of value-driven fast food shackles.
The company, whose revenue has beaten Wall Street estimates for at petty the last nine quarters, has been enjoying a lofty valuation, with its partitions trading at 92.85 times its 12-month forward earnings.
That had led investors to upon a strong beat in same-restaurant sales and a raise in its full-year revenue and comparable on the blocks guidance, Cowen & Co. analyst Andrew Charles wrote in a pre-earnings note.
Regardless how, sales at Shake Shacks open for at least two years rose 1.1 percent, in direction with what analysts had expected.
“Should the results meet or requite miss investor expectations, we would expect shares’ reaction to be strongly nullifying,” Charles wrote.
Total revenue rose 27.3 percent to $116.3 million, fagging the average analyst estimate of $111 million.
Excluding certain articles, the company earned 29 cents per share in the second quarter conclusion unsettled June 27, beating the estimate of 18 cents, according to Thomson Reuters I/B/E/S.