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Shake Shack’s Sales Trends Are Improving After a 70% Weekly Dive

By Demitri Kalogeropoulos – May 4, 2020 at 6:11PM

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The burger chain is operating at about half its traditional volume today.

Shake Shack's (SHAK 0.12%) business has been hit hard by social distancing efforts aimed at slowing the spread of COVID-19.

The fast-food chain, which has a heavy regional focus in and around New York, said on Monday that comparable-store sales fell 29% in March as closures began to affect the business. That figure quickly worsened to roughly 70% in three consecutive weeks covering late March through mid-April.

Demand has picked up for four consecutive weeks since then, though, with help from rising delivery sales. "We have continued to see week-to-week improvement in sales in all regions," CEO Randy Garutti said in a press release, "since the lowest point at the end of March."

A young woman bites into a burger.

Image source: Getty Images.

Shake Shack's second quarter, which started on March 25, is likely to include a bigger impact from the pandemic, even though the company is preparing to slowly ramp up its capacity to serve fast-food fans in person.

Management says the timing and pace of that rebound are unpredictable, but investors should prepare to see significant costs over the short term as Shake Shack invests in safety equipment and works through a period of less efficient store operations.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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