Shake Shack stock down more than 9% after Q4 loss, sales miss

Shares of Shake Shack Inc. fell more than 9% in the extended session Monday after the burger chain posted a quarterly loss and sales that missed expectations, saying it faced "food and labor headwinds." Shake Shack lost $2.1 million, or 6 cents a share, in the quarter, compared with a loss of $1 million, or 3 cents a share, in the fourth quarter of 2018. The company pinned the loss, which comes after three quarters of GAAP profits, on "sales performance, food and labor headwinds and investments across the business." Adjusted for one-time items, Shake Shack earned $2.2 million, or 6 cents a share, an adjusted EPS that matched the year-ago period. Sales rose 22% to $151.4 million, the company said. Analysts polled by FactSet had expected a GAAP loss of 1 cent a share and a breakeven adjusted EPS for the quarter on sales of $153 million. Same-store sales fell 3.6%, the company said. Shake Shack also cited increases in food and paper costs driven by higher costs for its Chick'n Bites, its version of chicken nuggets launched in January 2019, "significant" commodity inflation in beef and some inflation with dairy, and an increase in paper costs "as a direct result of digital sales mix which comes with additional packaging." The increases in labor and related expenses were driven by "ongoing wage inflation attributable to the availability of labor across the country, as well as the impact of increased staffing levels at new Shake Shack stores, it said. For 2020, the company guided for sales between $712 million and $720 million, and a comparable-store sales decrease in the low single digits.

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