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Shake Shack Isn't Expanding Breakfast Anytime Soon

Takeaways from the burger chain's second-quarter earnings call


Shack Shack announced earnings for the second quarter of fiscal year 2016 on Wednesday, revealing a 37.2 percent revenue increase that was attributed to an expanding global footprint. Following the announcement, chief executive officer Randy Garutti and chief financial officer Jeff Uttz held a conference call with market analysts to discuss Shake Shack's earnings. Below, three takeaways from that call.

1. Breakfast probably isn't coming to a Shake Shack near you.

The chain has debuted breakfast at six "transit-hub" locations (think airports and train stations), but it isn't planning to make the service a major part of its concept. "We really like the business," Garutti said on the call, but Shake Shack will continue to focus on burgers, fries, and milkshakes. Expansion of the brand with new openings is priority number one. "There may come a day [when Shake Shack expands breakfast], but it's not something we're focused on today," Garutti said. "We're focused on the heart of our business, which is lunch and dinner."

2. Expect to see more airport Shacks in the future.

The chain is looking to open roughly 18 new restaurants per year going forward (up from 16 a year). Thanks to a recent licensing agreement with franchising partner HMSHost, more airports will be targeted in the United States. "We really like the airport business for Shake Shack," Garutti said, because it draws in diners who don't have high expectations for airport food. It's too early to tell where and when new airport Shacks will open, but it's likely they'll be targeted for markets where the chain is already established.

Outside the U.S., Asia may be in line for major expansion. "There is simply no question that our opportunity in Asia is vast," Garutti said. "We're quite bullish about our opportunity in that market."

3. Fast food may be struggling, but Shake Shack is confident.

While other chains are experiencing turmoil due to a variety of factors (such as the low cost of beef keeping potential diners in their home kitchens), Shake Shack isn't worried. "There's no doubt there's been a lot of choppiness out there in all phases of our industry," Garutti said. "I think Shake Shack's a special brand. We're really bullish on our future." He believes the chain has an "opportunity to capture some strong real estate and move ahead" in the market.

• Shake Shack Announces Second Quarter 2016 Financial Results [Official]

• All Shake Shack Coverage [E]

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