On Friday, Shake Shack (NYSE:SHAK) gave investors their first look at how the business fared during the initial shock related to COVID-19 store closures.
In a preliminary release of first-quarter results, the better-burger chain, which has a heavy regional focus around New York, said sales held up to expectations during January and February before slumping by 29% in March as stay-at-home recommendations swept the nation. That shift resulted in a 13% revenue drop for the full quarter and tipped the fast-food specialist into a modest operating loss.
CEO Randy Garutti sought to temper that news with encouraging signs, including spiking digital sales trends and modest demand growth in recent weeks. "We've seen strong sequential sales increases on a weekly basis since the last week in March," he noted.
Shake Shack also issued updates to its financial position. Management has paused all capital expenditures, announced layoffs, and slashed costs to the point that cash is being used at a rate of roughly $1.5 million per week.
With $112 million of cash on hand today, and quick access to additional funds of over $50 million, management believes it can endure even a prolonged pause to most of the restaurant's in-person selling operations.