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Why Shake Shack Stock Surged Today

By Joe Tenebruso – Jan 11, 2022 at 7:00PM

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COVID-19 didn't stop the popular burger chain's growth.

What happened 

Shake Shack (SHAK -2.60%) jumped 13.3% on Tuesday after the restaurant chain released preliminary fourth-quarter results that were better than many investors expected.

So what

Shake Shack's revenue soared 29% year over year to $203.3 million, driven by restaurant openings and a 20.8% increase in same-store sales at company-owned locations. Both figures were above Wall Street's estimates, which had called for revenue of $198 million and comp growth of 16.9%. 

Notably, Shake Shack's comps also rose 2.2% compared to the pre-pandemic fourth quarter of 2019, marking the chain's recovery from its coronavirus-related lows in early 2020.

Two people eating in a burger restaurant.

Image source: Getty Images.

Now what 

Shake Shack is experimenting with an array of digital technologies to further its growth and improve its profitability. The company opened its first drive-thru location in December. CEO Randy Garutti said early results are "encouraging," and the company plans to roll out more drive-thru stores in the coming years. "It could be a really big expansion plan for us," said Steph So, Shake Shack's head of digital experience, during an interview with  

The restaurant chain is also testing ways to digitize its kitchen operations to increase efficiency and better serve both in-store diners and online customers. Self-serve kiosks, digital ordering platforms, and delivery are additional areas of focus that are likely to play important roles in Shake Shack's expansion strategy. After opening 58 net locations in 2021, the company expects to open at least 50 new stores this year.

Joe Tenebruso 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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