Shake Shack Stock Drops After Q1 Miss

Shake Shack reported first-quarter revenue of $320.9 million, up 10.5% year-over-year, and adjusted earnings per share of $0.14, with both figures missing Wall Street expectations. Same-store sales were essentially flat, and despite profit more than doubling to $4.5 million from the previous year, the company's stock has declined over 30% so far this year. The company continued to expand its footprint by opening new company-operated and licensed locations. Analysts have issued several recent negative earnings revisions, citing underwhelming sales growth and increased competitive pressures in the fast-casual dining sector. However, they also noted Shake Shack's strong long-term revenue growth and improving free cash flow. The company's future performance will depend on management's ability to drive same-store sales and meet growth expectations.