SHAK is a SHORT
SHAK will likely never be profitable.
Shake Shack reports 2Q22 EPS $0.00 ex-items vs FactSet ($0.02) and Revenue $230.8M vs FactSet $238.3M; Comps 10.1% vs FactSet 13.7%; Adjusted EBITDA margin 9.6% vs FS 8.3% and year-ago 11%; Operating margin (0.4%) vs FS (0.5%) and year-ago 1.8%.
"While our sales were tracking in line with our expectations for April and May, June sales were below our expectations. We felt some impact of shifts in consumer patterns amidst elevated inflationary pressures. Additionally, key urban recovery trends broadly held but in some cases reversed. Despite this, our deeply impacted urban markets, such as New York City, Boston, and Washington, D.C., all grew SSS by more than 25%. We expect our recovery would have been stronger had mobility metrics in urban locations - including a return to office - incrementally improved. Development delays negatively impacted sales in the quarter as we struggled to source equipment and achieve timely permitting and inspections that we needed to open restaurants on time. While we cannot be certain how consumer spending and mobility patterns will evolve throughout the rest of the year, we remain focused on delivering a great guest experience in digital and in-Shack channels with elevated offerings reflective of our fine dining culinary roots."
Restaurant Brands (QSR)
Reported a stronger than expected quarter - SHORT Thesis under review
Reported 2Q22 Non-GAAP EPS of $0.82 beats by $0.09; Revenue of $1.64B (+13.9% Y/Y) beats by $70M; Global System-wide sales grow 14%, up nearly $1 billion year-over-year to over $10 billion; Consolidated comparable sales accelerate to 9% with 14% growth at Tim Hortons Canada, 18% at Burger King International; Digital sales grow double-digits year-over-year to over $3 billion, representing 33% of system-wide sales.
PTLO Earning - better than bad
The company reaffirms FY Guidance with commodity costs up 13%-15% and SSS up low single digits.
I still like the short call after the 44% short covering rally.
Key operating metrics:
- Comps +1.9% vs FactSet +2.1%
- Cost of goods sold 34.4% vs FS 33.8%
- Restaurant margin 25.5% vs FS 24.0%
- Adjusted EBITDA margin 18.3% vs FS 14.3%
- Ending units 71 vs FS 71
