The company is expecting revenues of 580 million for 2019, which represents 26% growth YoY. That's down from Q1 growth rate of 33% and slightly down from 27% achieved in 2018. Despite that, Shake shack still has lot of potential for future growth. the company is targeting 450 domestically owned stores, which is almost 4x the current amount.
After several quarters, same store sales finally ticked up to 3.6%, comprised of 1.6% traffic increase and 2% price increase. While the company is growing pretty fast, the same store sales numbers are still pretty weak.
In Q1, the company opened five domestic company-operated Shacks and seven licensed Shacks. They are expanding this year to China, Singapore, Mexico and Philippines,
Dan Meyer is known for several controversial moves such as eliminating tipping (instead they incorporated it into menu prices) and going completely cash-less in several of his restaurants. Shake Shack was originally a single hot dog and burger stand at Madison Square Garden but thanks to its popularity quickly expanded to other locations and cities.
Shake Shack recognizes revenue from its own stores and licensing fees
Operating and gross margin
Balance sheet items
I have looked at Shake Shack before when it was in low 40s, but didn't buy it back then. Now the stock price is 70% higher. I don't mind the valuation that much, as the multiples are a bit elevated but still reasonable given their large potential. What I mind is that SSS are growing so slowly, and also that it's a restaurant business, which is not something I'm an expert at. I don't understand their competitive advantage, it might be taste, but to it seems like that there are so many competitive options available that I just don't see their edge.