Shake Shack reported second-quarter results Wednesday showing higher revenue but lower profit, as a broad rise in operating costs squeezed the bottom line.
Net income attributable to Shake Shack Inc. declined to $15.7 million, or 37 cents per diluted share, compared with $17.1 million, or 41 cents per diluted share, in the year-ago quarter
Excluding one-time items, adjusted earnings worked out to 43 cents per diluted share, well ahead of the 31-cent consensus estimate analysts had forecast, according to The Wall Street Journal. Total revenue rose 17.2% to $417.6 million, comprising $403.4 million in Shack sales and $14.2 million in licensing revenue. Same-Shack sales grew 3.5%, above the 2.6% analysts had projected, according to the Wall Street Journal.
Total expenses reached $396.9 million, up from $334.1 million in the year-earlier period. Food and paper costs widened to 28.8% of Shack sales from 28.2% a year ago. In absolute dollar terms, labor and other operating costs were also higher, although labor as a percentage of Shack sales narrowed to 25.1% from 25.7%.