Shake Shack (NYSE:SHAK), a fast food restaurant chain, was trending up in trading on Monday after the company reiterated its FY23 outlook and announced the retirement of its CEO, Randy Garutti, next year.
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The company stated that Garutti will retire after 24 years at Shake Shack once his successor is chosen. The company’s Board of Directors search committee will be led by Chairman Danny Meyer and independent Directors Chuck Chapman, Jeff Lawrence, Lori George, and Josh Silverman.
Randy Garutti, Shake Shack’s CEO, stated, “It has been my honor to lead the talented Shake Shack team from our humble beginnings as a hot dog cart in Madison Square Park in New York City to the public company we are today. Together, we have achieved more than anyone dreamed, delighting communities across 18 countries, 33 states and more than 500 Shacks, while targeting to surpass $1.0 billion in revenue this year.”
The company expects to generate revenues in the range of $276.25 million to $281.75 million in the fourth quarter. At the same time, same-shack sales are likely to be up low-single digits year-over-year. In FY23, SHAK anticipates generating revenues of around $1.08 billion, with a growth rate of 20% year-over-year. Same-shack sales are projected to grow by mid-single digits year-over-year, with adjusted EBITDA between $125 million and $130 million in FY23.
Is Shake Shack a Buy or Sell?
Analysts remain cautiously optimistic about SHAK stock with a Moderate Buy consensus rating based on five Buys, eight Holds, and one Sell. SHAK stock has gone up by more than 25% in the past year, and the average SHAK price target of $68.43 implies an upside potential of 5.34% at current levels.
