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Shake Shack Begins Launching New Shacks Again

By Rhian Hunt – Jul 7, 2020 at 11:17AM

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The company says it’s opening the new restaurants despite lingering COVID-19 sales effects.

Fast-casual restaurant chain Shake Shack (SHAK -2.60%) published a business update today in which it revealed it has started opening new restaurants, or "Shacks," even before the continuing effects of the coronavirus pandemic have ended. The company also provided a sales update ahead of its planned July 30 second-quarter earnings report and earnings conference call.

The press release notes that six Shacks remain temporarily closed for both dine-in and to-go service in the wake of COVID-19, though this is only about a third of the 17 Shacks fully closed earlier in the pandemic. Shake Shack says it recently had 60% of its dine-in facilities reopened, though at reduced capacity. However, some of its restaurants have closed their dining rooms again since, falling back on a to-go only model, as COVID-19 cases spike again across the American South and Southwest.

Restaurant owner wearing a mask flips "open" sign on window.

Image source: Getty Images.

Shake Shack says it has opened four brand-new domestic outlets in the recent quarter, one each in North Carolina and Missouri and two in California. The company says these freshly introduced locations are already looking like a net positive, "each of which opened with encouraging levels of sales," CEO Randy Garutti observed. "Amidst our gradual sales recovery, we've started to open new Shacks again and are looking to the significant growth opportunity that we believe lies ahead for Shake Shack."

The burger chain also highlighted an overall positive trend across its whole business, stating domestic "company-operated Shacks experienced steady sales increases over the last few weeks with most recent average weekly sales of $58,000, an increase of 18% compared to the week ended April 29." The company also recently said it's planning to add 15 more Shacks in China over the next decade. 

Rhian Hunt 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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