Shake Shack Battles Rising Beef Costs With Clever Price Moves

Benzinga

Shake Shack raised menu prices to offset a 35% surge in beef costs, with steeper hikes on premium items. Truist trimmed margin forecasts but kept a Buy rating, noting stronger same-store sales and new menu momentum. Shares rose as the company reaffirmed its 2025 revenue outlook despite cost pressures.

Transcript

00:00It's Benzinga, bringing Wall Street to Main Street.

00:02Shake Shack is navigating rising beef costs with a targeted pricing strategy and stronger sales momentum.

00:08Truist reported that the company raised menu prices by about 2% in mid-August,

00:12ahead of a planned October hike to counter a 35.4% year-over-year beef price surge in the third quarter.

00:17Price increases were modest for entry-level items, but steeper for premium offerings.

00:21Truist trimmed Shake Shack's 2025 and 2026 in just an EBITDA forecast slightly,

00:26though both remain within the company's full-year guidance.

00:28The brokerage kept a buy rating on Shake Shack, but cut the price target to $156

00:33and slightly lowered margin estimates for 2025 and 2026.

00:38Truist raised its Q3 same-store sales estimate to 3.5% above consensus,

00:42citing strong promotions and new menu items.

00:45Shake Shack reaffirmed its 2025 revenue outlook of $1.4 billion to $1.5 billion.

00:50Shares were up 2.78% at $94.97 on Monday, trading at near-historic valuation lows.

00:56For all things money, visit Benzinga.com.

Category

Transcript

Be the first to comment

Recommended