×

Shake Shack's expansion by the numbers

Shake Shack cheeseburger and drink.
Getty Images
Shake Shack cheeseburger and drink.

Not too long ago, you had to stop by Madison Square Park in New York City to eat a Shake Shack burger.

It's only been a little more than a decade, but today you can visit the fast-casual restaurant in Moscow, Abu Dhabi or Chicago. There are 86 shacks across the globe, and about a third of those restaurants were added since the beginning of 2015.

Shake Shack reported better-than-expected annual revenue of $190.6 million on Monday, up nearly 61 percent from the fiscal year before. Much of that growth has been driven by the company's ambitious expansion, as well as strong sales at existing stores.

On a percentage basis, the company's location expansion and expected same-store sales from 2014 to the end of 2015 are among the highest in the industry, according to FactSet estimates.

So how does that rapid expansion compare to other new or established restaurant chains?

The company is unique in that it went public with relatively few locations. Bojangles, which had its IPO a few months after Shake Shack, already had more than 600 locations when it went public. Habit Restaurants and Zoe's Kitchen had about 100. Potbelly had about 300.

Chipotle added more than 90 locations in its first year, on top of the 480 locations it was operating at the time of its 2006 IPO. That's growth of about 20 percent. Today the company operates more than 2,000 locations.

So while Shake Shack's growth is impressive as a percentage, it is hard to compare this early expansion stage to more mature chains. The first shack was opened in 2004, decades after many of those other companies with recent IPOs first opened their doors.

In its IPO filing in January 2015, the company said that it planned to expand its domestic footprint to 450 company-operated stores. While no end date has been given for that expansion, the company pledged to open at least 10 restaurants each fiscal year, later pumping that target up to 12 a year.

The company increased that minimum again last quarter to 14 stores a year for 2016 and forward (13 for 2016, as one store was opened on the last day of 2015). At that rate, the company will hit its goal of 450 stores in about 25 years. In the meantime, Shake Shack expects each new store this year to bring in average annual sales of $3.3 million each and margins of at least 22 percent.

Over the last 52 weeks, Shake Shack was down around 3 percent as of Monday's close. Out of the 10 analysts who cover the stock on FactSet, one has a "buy" rating and two have "sell" ratings. The remaining seven have "hold" ratings.

Shack Shack plans to continue its expansion this year into several new markets, including Los Angeles, Dallas and South Korea.

"We have just barely gotten started," said CEO Randy Garutti, on Monday's earnings call.