Fast-food chain Shake Shack (NYSE: SHAK) met Wall Street’s revenue expectations in Q4 CY2025, with sales up 21.9% year on year to $400.5 million. Its non-GAAP profit of $0.37 per share was 6.1% above analysts’ consensus estimates.
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Shake Shack (SHAK) Q4 CY2025 Highlights:
- Revenue: $400.5 million vs analyst estimates of $401.2 million (21.9% year-on-year growth, in line)
- Adjusted EPS: $0.37 vs analyst estimates of $0.35 (6.1% beat)
- Q1 guidance: same-store sales (+4% at the midpoint) and revenue guidance ($368 million at the midpoint) both beat expectations
- Operating Margin: 4.7%, up from 3.1% in the same quarter last year
- Free Cash Flow Margin: 1%, down from 3.2% in the same quarter last year
- Locations: 670 at quarter end, up from 579 in the same quarter last year
- Same-Store Sales rose 2.1% year on year (4.3% in the same quarter last year)
- Market Capitalization: $3.71 billion
Company Overview
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.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $1.45 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 16% annualized revenue growth over the last six years was impressive as it opened new restaurants and increased sales at existing, established dining locations.
This quarter, Shake Shack’s year-on-year revenue growth of 21.9% was excellent, and its $400.5 million of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 13.7% over the next 12 months, a slight deceleration versus the last six years. Still, this projection is commendable and indicates the market sees success for its menu offerings.
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Restaurant Performance
Number of Restaurants
The number of dining locations a restaurant chain operates is a critical driver of how quickly company-level sales can grow.
Shake Shack operated 670 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 13.7% 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.
Same-Store Sales
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 is an industry measure of whether revenue is growing at those existing restaurants and is driven by customer visits (often called traffic) and the average spending per customer (ticket).
Shake Shack’s demand has been healthy for a restaurant chain over the last two years. On average, the company has grown its same-store sales by a robust 2.9% per year. This performance gives it the confidence to meaningfully expand its restaurant base.
In the latest quarter, Shake Shack’s same-store sales rose 2.1% year on year. This performance was more or less in line with its historical levels.
Key Takeaways from Shake Shack’s Q4 Results
It was good to see Shake Shack beat analysts’ EPS expectations this quarter. Looking ahead, Q1 guidance for same-store sales and revenue also exceeded Wall Street's estimates. Zooming out, we think this was a decent quarter. The stock traded up 4% to $95.79 immediately after reporting.
Is Shake Shack an attractive investment opportunity right now? 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).
