Things Could Get Rough for Shake Shack After Its Q4 2019 Report
Since I last caught up with Shake Shack (NYSE: SHAK), shares recently started to rally after a sharp sell-off following its third-quarter 2019 report. The better-burger chain is still expanding at a torrid pace, but share prices were in need of a breather after doubling in value through the summer months.
I don't think the pain is quite over yet. It's true that Shake Shack's new locations opening outside of its home markets in the northeastern U.S. are doing well, but it isn't the only fast-casual dining concept trying to capture consumer interest. Signs are mounting that the industry is still shooting itself in the foot with overexpansion, and recent reports indicate that foot traffic at restaurants is weakening once again.
Restaurant research group Black Box Intelligence recently released its latest reading on the industry, and it wasn't pretty. Comparable-store sales (or comps, a blend of foot traffic and average guest ticket size) fell 0.14% in the fourth quarter -- including a 2.1% and 5.7% drop in comps and foot traffic, respectively, in the month of December. The weakest region was New England with comps and foot traffic falling an average of 4.4% and 7.6%, respectively.
Source Fool.com
