May 7 (Reuters) – Fast food chain operator Shake Shack on Thursday swung to a quarterly loss and missed revenue estimates, hurt by rising commodity costs such as that of beef and weak consumer spending, sending its shares down about 28% in early market trading.
The company also named Michelle Hook as its new CFO, effective May 11.
• Several other fast food chains including McDonald’s, Domino’s and Papa John’s have reported weaker quarterly sales growth, signaling pressure on customer spending from rising gasoline prices driven by the Iran war.
• Companies like Chipotle Mexican Grill and Restaurant Brands International have also flagged rising beef prices, which have set records due to dwindling U.S. cattle supplies.
• Shake Shack executives said on a post-earnings call that the company’s short-term results have been and will continue to be impacted by the ongoing war in the Middle East.
• “We are seeing broader signs of consumer strain across restaurants, and it will be important to watch how the company navigates elevated beef costs going forward,” said Michael Gunther, SVP at Consumer Edge.
• Hook, former CFO of Portillo’s, replaces Katherine Fogertey as Shake Shack’s CFO. Fogertey stepped down from the role in early March.
• The leadership change comes as Shake Shack reported a quarterly loss per share of 1 cent, compared with a profit of 11 cents a year ago.
• The burger chain reported adjusted profit of $ 0.002 per share, missing estimates of 12 cents per share.
• Shake Shack posted first-quarter revenue rose 14.3% to $366.7 million, but missed analysts’ estimate of $371.9 million, according to data compiled by LSEG.
(Reporting by Sanskriti Shekhar in Bengaluru; Editing by Shailesh Kuber)
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