Shake Shack Inc. released preliminary first-quarter results showing a 12.8% drop in same-store sales in the quarter, from the year-ago period, as the COVID-19 pandemic led to a steep 28.5% drop in comparative sales during the month of March.
First-quarter revenue increased to $143 million, compared to year-ago figures of $132.6 million. However first-quarter revenue, which included $138 million in Shack sales and $5 million in licensing revenue, fell short of consensus estimates.
The company also furloughed or laid off 1,000 employees and top executives took a pay cut.
“Given the ongoing impact of COVID-19 on our business, our Shack teams have demonstrated their entrepreneurial spirit and continued to adapt our operating models and business strategy,” Shake Shack CEO Randy Garutti said in a company release. “As a result, we’ve seen strong sequential sales increases on a weekly basis since the last week in March.”
He said the restaurant company has doubled down on its own digital toolbox, boosting engagement and messaging via its own direct channels and has expanded new and existing partnerships with third-party delivery platforms, including DoorDash, UberEats, Caviar and Postmates.
As of today, Shake Shack has temporarily closed 17 stores, with about half of those due to government mandates and the other half that operated in heavy tourist areas or operated in travel restricted zones.
The company received $10 million under the Paycheck Protection Program through JPMorgan Chase on April 10 and has a total of $112 million in cash and marketable securities on hand as of yesterday.
The company’s cash burn rate is between $1.3 million and $1.5 million per week.
The first-quarter earnings call is scheduled or May 4.
Cover image: iStock
Companies: Shake Shack