Fast-food chain Shake Shack (NYSE:SHAK) missed Wall Street’s revenue expectations in Q1 CY2026, but sales rose 14.3% year on year to $366.7 million. Its non-GAAP loss of $0 per share was significantly below analysts’ consensus estimates.
Is now the time to buy Shake Shack? Find out in our full research report.
Revenue: $366.7 million vs analyst estimates of $372 million (14.3% year-on-year growth, 1.4% miss)
Adjusted EPS: $0 vs analyst estimates of $0.12 (significant miss)
Adjusted EBITDA: $36.97 million vs analyst estimates of $45.64 million (10.1% margin, 19% miss)
Operating Margin: -0.7%, down from 0.9% in the same quarter last year
Free Cash Flow was -$38.7 million, down from $1.87 million in the same quarter last year
Locations: 685 at quarter end, up from 589 in the same quarter last year
Same-Store Sales rose 4.6% year on year (0.2% in the same quarter last year)
Market Capitalization: $3.89 billion
Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE:SHAK) is a fast-food restaurant known for its burgers and milkshakes.
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $1.49 billion in revenue over the past 12 months, Shake Shack is a mid-sized restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.
As you can see below, Shake Shack’s 17.1% annualized revenue growth over the last seven years was excellent as it opened new restaurants and increased sales at existing, established dining locations.
This quarter, Shake Shack’s revenue grew by 14.3% year on year to $366.7 million but fell short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 14.9% over the next 12 months, a slight deceleration versus the last seven years. Despite the slowdown, this projection is noteworthy and suggests the market is forecasting success for its menu offerings.
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The number of dining locations a restaurant chain operates is a critical driver of how quickly company-level sales can grow.
Shake Shack operated 685 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 13.4% annual growth, much faster than the broader restaurant sector. This gives it a chance to become a large, scaled business over time.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth at restaurants open for at least a year.
Shake Shack’s demand has been spectacular for a restaurant chain over the last two years. On average, the company has increased its same-store sales by an impressive 3.3% per year. This performance along with its meaningful buildout of new restaurants suggest it’s playing some aggressive offense.
In the latest quarter, Shake Shack’s same-store sales rose 4.6% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.
We struggled to find many positives in these results. Its EBITDA missed and its EPS fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 19.9% to $77.40 immediately following the results.
The latest quarter from Shake Shack’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
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