Burger chain Shake Shack posts bigger-than-expected quarterly loss

Burger chain Shake Shack posts bigger-than-expected quarterly loss

FILE PHOTO: A Shake Shack Inc. burger chain restaurant employee works during the outbreak of the co
FILE PHOTO: A Shake Shack Inc. burger chain restaurant employee works during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., April 20, 2020. REUTERS/Andrew Kelly/File Photo

REUTERS: Shake Shack posted a bigger-than-expected quarterly loss on Thursday (Jul 30), as the burger chain temporarily closed some restaurants and limited working hours due to COVID-19 lockdowns and civil unrest that gripped several US cities.

Shares of New York-based company were down 5per cent in extended trading.

Restaurants have been forced to bank heavily on sales from online orders and drive-thrus and also identify new ways to serve customers, as they battle constantly changing dynamics and consumer behaviors brought on by the health crisis.

Industry bellwether McDonald's on Tuesday said that drive-thru accounted for nearly 90 per cent of its quarterly sales, while urban-centric Shake Shack has only started the design process for its first ever drive-thru location, planned to open in 2021.

The restaurant chain said same-store sales fell about 49per cent in the quarter ended June 24, as traffic more than halved. Total quarterly revenue fell to US$91.8 million from US$152.7 million, below average analysts' estimate of US$93 million.

Digital sales accounted for three-fourths of the company's sales.

Excluding one-time items, Shake Shack posted a loss of 45 cents per share, compared with market estimates of 37 cents, according to IBES data from Refinitiv.

It also said same-store sales decreased 39per cent between Jun 24 and Jul 22, with rural restaurants outperforming the urban ones.

Source: Reuters

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