Shake Shack Stock Rises 27% in Three Months: Is it a Good Time to Buy?

Shares of Shake Shack Inc. SHAK have rallied 26.7% in the past three months, significantly outperforming the 7.8% growth registered by the Zacks Retail - Restaurants industry. SHAK also outpaced the broader Retail-Wholesale sector and the S&P 500 index's 14.8% and 7.8% growth, respectively, during the same period.The company is benefiting from strong same-shack sales, digital initiatives and unit expansion efforts. Also, focus on strategic promotions and effective marketing campaigns, along with menu innovation, bode well.Image Source: Zacks Investment ResearchFactors Driving SHAK Stock’s SurgeStrong Same-Shack Sales Growth: Shake Shack has consistently demonstrated strong performance in its same-shack sales, driven by its strategic initiatives and premium brand positioning. The company’s ability to deliver consistent growth, even in a challenging macro environment, indicates the effectiveness of its sales-driving strategies.In the first nine months of 2024, same-shack sales increased 3.4% year over year, driven by a 4.2% increase in price mix. With positive traffic and continued momentum in key markets, Shake Shack is well-positioned to maintain its growth trajectory moving forward.Strong Expansion and Improved Unit Economics: Shake Shack continues to expand the company’s global footprint, with a strong focus on increasing its presence through both company-operated and licensed Shack openings. As of Sept. 25, 2024, the company operated 552 Shacks system-wide, including 310 company-operated Shacks and 242 licensed Shacks. The company's strategic efforts in unit expansion are driving efficiencies and improving profitability. As Shake Shack accelerates its growth trajectory, it remains committed to enhancing the company’s unit economics while maintaining a high level of operational performance.In the third quarter of 2024, Shake Shack opened 17 new Shacks, including eight domestic company-operated units, three of which were drive-thrus, and nine new licensed Shacks. The company is on track to open approximately 75 Shacks system-wide this year, representing mid-teens unit growth.New company units are delivering strong cash-on-cash returns, with continued progress in reducing build and pre-opening costs. The company is also targeting a 10% reduction in build costs for 2024, with plans to accelerate new unit openings to 80-85 next year, including 45 company-operated and 35-40 licensed Shacks.Sales-Driving Initiatives: Shake Shack continues to leverage a range of strategic sales-driving initiatives to enhance customer engagement and drive growth. In September, by popular demand, Shake Shack brought back Chicken Sundays, a promotion initially run in the second quarter. Other campaigns like Free Shake Friday and the Dog Days of Summer further spotlighted menu highlights, continuing to attract both new and repeat guests.Looking ahead, Shake Shack remains focused on building on these initiatives with further investments in product innovation, customer loyalty and operational enhancements. Among the sales-driving initiatives in the pipeline, the company is developing a strategic product innovation calendar, launching a Shake Shack loyalty platform and implementing operational improvements to increase guest satisfaction, decrease service times and enhance throughput.Estimate Revision Favoring SHAK StockImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for SHAK’s 2024 earnings has trended upward in the past 30 days. The estimated figure indicates growth of 121.6% from a year ago. The consensus estimate for 2025 earnings has also moved up over said time frame, indicating 41.7% year-over-year growthShould You Buy SHAK Stock?Shake Shack’s strong same-shack sales, strategic unit expansion and effective marketing initiatives support its continued growth. The company’s successful promotions and upcoming innovations, along with the expansion of its footprint, position SHAK for further success. With upward estimate revisions for 2024, this Zacks Rank #2 (Buy) company is poised for further growth, making it an attractive stock for investors.Other Key PicksHere are some other top-ranked stocks from the Zacks Retail-Wholesale sector.Deckers Outdoor Corporation DECK currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.DECK has a trailing four-quarter earnings surprise of 41.1%, on average. The stock has gained 8.1% in the past six months. The Zacks Consensus Estimate for DECK’s fiscal 2025 sales and EPS indicates growth of 13.6% and 12.6%, respectively, from the year-ago period’s levels.Brinker International, Inc. EAT presently flaunts a Zacks Rank of 1. EAT has a trailing four-quarter earnings surprise of 12.1%, on average. The stock has surged 92.4% in the past six months.The consensus estimate for EAT’s fiscal 2025 sales and EPS indicates growth of 7.9% and 34.6%, respectively, from the year-ago period’s levels.Sprouts Farmers Market, Inc. SFM currently sports a Zacks Rank of 1. SFM has a trailing four-quarter earnings surprise of 15.3%, on average. The stock has gained 94.2% in the past six months.The Zacks Consensus Estimate for SFM’s 2024 sales and EPS indicates a rise of 12.2% and 29.6%, respectively, from the year-ago period’s levels.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Brinker International, Inc. (EAT): Free Stock Analysis Report Deckers Outdoor Corporation (DECK): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report Shake Shack, Inc. (SHAK): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks