Tuesday's stock market action on Wall Street showed that 2022 isn't doomed to be a down year after all. Gains for the Dow Jones Industrial Average (^DJI 0.67%) were relatively modest, but larger boosts to the S&P 500 (^GSPC 0.87%) and Nasdaq Composite (^IXIC 1.11%) showed that investors haven't given up on the stock market just yet.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
+0.51% |
+183 |
|
S&P 500 |
+0.92% |
+43 |
|
Nasdaq |
+1.41% |
+211 |
Data source: Yahoo! Finance.
Earnings season begins in earnest later this week, with big bank stocks and some other traditional first-announcers giving investors their latest results. Yet several companies try to get a jump on the action by offering preliminary figures. That's what Shake Shack (SHAK 1.06%) did, and the response was a nice jump for the restaurant chain's stock. Meanwhile, Freshpet's (FRPT 0.06%) guidance wasn't as well-received after its release on Monday, but newfound confidence helped lift the pet food producer's shares on Tuesday. Let's take a closer look at both stocks.
Image source: Getty Images.
Shake Shack serves it up
Shares of Shake Shack rocketed higher on Tuesday, rising 13%. The popular burger and milkshake chain reported preliminary fourth-quarter results that fully satisfied its shareholders.
Shake Shack's numbers to close the year looked strong. Total revenue for Q4 jumped 29 % to $203.3 million despite the fact that the year-earlier period actually had an extra week compared to this year's quarter. Same-store sales climbed 20.8% from year-ago levels, and they were higher by 2.2% compared to pre-pandemic levels in Q4 2019.
The full-year results for Shake Shack showed similar success. Revenue climbed 41.5%, with comps rising 24.2%.
Shake Shack has continued to grow its store network, opening 19 new Shack locations systemwide in Q4. That brought the total new openings for the year to 58, expanding the Shake Shack network to 369 stores, including both company-owned and third-party licensed locations.
The only concern Shake Shack expressed was a drop in operating hours toward the end of the period, spurred by COVID-19 case-count increases and staffing concerns. Those trends could hurt the company in 2022, and they could be why Shake Shack stock has fallen from higher levels just a couple months ago. Today, though, investors don't seem to be giving it much weight in assessing the company's long-term prospects.
Freshpet perks up
Freshpet also saw its stock climb, rising 11% on Tuesday. The pet food specialist had issued some downbeat news on Monday morning, but investors saw the company's prospects in a new light today.
Investors weren't happy initially about Freshpet's preliminary Q4 results despite some strong sales gains. Freshpet said it expects sales of $115.9 million for the quarter, rising 37% year over year and completing 2021 on a solid note. The company said it had expanded its total addressable market by 25%, in part because of enhanced manufacturing capabilities and distribution enhancements. Yet shareholders had hoped for better numbers.
On Tuesday, though, stock analysts weighed in. At Baird, analysts believed that the stock's recent weakness offered a solid buying opportunity, with expectations that growth could indeed accelerate in 2022. Analysts also looked for higher profits, and Baird reiterated its outperform rating and $150 price target on the stock.
Like many high-growth companies, Freshpet has been under pressure in recent months. Yet there's no denying that people love their pets, and strong consumer demand should help the pet food specialist regain its footing in time.