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Shake Shack (NYSE:SHAK) reports sales below analyst estimates in Q3 2026 earnings
Fast-food chain Shake Shack (NYSE:SHAK) fell short of the market’s revenue expectations in Q3 2026, but revenue rose 15.2% year on year to $423.3 million. Its non-GAAP profit of $0.40 per share was 16.7% above analysts’ consensus estimates.
For more on Shake Shack, read our free full research report.
Shake Shack (SHAK) Q3 2026 highlights:
- Revenue $423.3 million vs S&P analysts’ consensus estimates of $425.5 million (15.2% year-on-year growth, 0.5% miss)
- Adjusted EPS $0.40 vs S&P analysts’ consensus estimates of $0.34 (16.7% beat)
- Adjusted EBITDA $62.79 million vs analysts’ consensus estimates of $62.05 million (14.8% margin, 1.2% beat)
- Operating margin 5.1%, in line with the same quarter last year
- Free cash flow margin 3.1%, down from 6.5% in the same quarter last year
- Locations 750 at quarter end, up from 630 in the same quarter last year
- Market capitalization $2.94 billion
Revenue growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $1.61 billion in revenue over the past 12 months, Shake Shack is a mid-sized restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the positive side, it can still post high growth rates because it’s working from a smaller revenue base.
Shake Shack’s 16% annualized revenue growth over the last seven years was strong as it opened new restaurants and increased revenue at existing, established dining locations.
This quarter, Shake Shack’s revenue grew by 15.2% year on year to $423.3 million but fell short of Wall Street’s consensus estimates.
Looking ahead, sell-side analysts expect revenue to grow 13.5% over the next 12 months, according to S&P, a slight deceleration versus the last seven years. Still, this projection is healthy and indicates the market sees success for its menu offerings.
Restaurant performance
Number of restaurants
The number of dining locations a restaurant chain operates is a critical driver of how quickly company-level revenue can grow.
Shake Shack operated 750 locations in the latest quarter. Over the last two years, its restaurant count has grown at a rapid pace, averaging 14.1% annual growth, among the fastest in the restaurant sector. This gives it a chance to become a large, scaled business over time.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Same-store sales
The change in a company’s restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales is an industry measure of whether revenue is growing at those existing restaurants and is driven by customer visits (often called traffic) and the average spending per customer (ticket).
Shake Shack’s demand has been healthy for a restaurant chain over the last two years. On average, the company has grown its same-store sales by 3.1% per year. This performance gives it the confidence to meaningfully expand its restaurant base.
Note that Shake Shack reports its same-store sales intermittently, so some data points are missing in the chart below.
Key takeaways from Shake Shack’s Q3 results
Shake Shack’s Q3 results had some key positives: EPS beat analysts’ consensus estimates and EBITDA narrowly topped Wall Street’s consensus. Revenue, however, came in slightly below expectations, making for a mixed quarter. Shares remained flat at $72.75 immediately after the report.
When evaluating Shake Shack at its current price, the latest quarter matters, but not as much as longer-term business quality and valuation. Read more in the full research report here (it’s free).