1 Number That Has to Change Before I Buy Shake Shack Shares

• Shake Shack is already making bully connected plans to much than triple its store count.

• Restaurant-level margins are growing, and same-store income maturation is an manufacture standout.

• Yet the banal has fallen dramatically, and 1 metric tilts the likelihood against anyone buying shares.

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Fast-casual eating concatenation Shake Shack (NYSE: SHAK) had a large twelvemonth successful 2025. The institution announced a monolithic enlargement program that would much than triple its store number to 1,500 company-owned and licensed locations. The one-time blistery canine basal opened 30 caller stores arsenic of its third-quarter 2025 net report, with plans to ramp that up to 55 to 60 caller stores successful 2026.

Perhaps astir impressively, it delivered same-store-sales maturation of 4.9% twelvemonth implicit year, astatine a clip erstwhile fast-food postulation declined 1.1% nationwide, according to the information institution Revenue Management Solutions. To propulsion disconnected mid-single-digit same-store income maturation successful 2025 strikes maine arsenic a immense achievement, considering however fast-food executives are lamenting challenging macroeconomic conditions and pinched consumers successful seemingly each net call.

For context, Chipotle Mexican Grill conscionable saw its archetypal same-store income diminution successful 20 years, portion Wendy's shares are down 43% successful a twelvemonth successful which the institution announced a 4.7% slump successful same-store income and plans to adjacent hundreds of U.S. stores. Arby's closed dozens of stores crossed America successful 2025, portion McDonald's CEO Christopher Kempczinski announced a 10% slump successful lower-income lawsuit visits successful Q3 amid a "challenging" pricing environment.

You tin spot the sector's symptom successful the show of AdvisorShares Restaurant ETF (NYSEMKT: EATZ), an exchange-traded money that allocates astatine slightest 80% of nett assets to companies dealing chiefly successful the edifice business. Over the past 12 months, arsenic the S&P 500 returned 18.5%, the money eked retired a 2% gain.

But by each measurement but one, Shake Shack has been a uncommon agleam spot successful the industry. Apart from its increasing same-store income and robust store openings, it besides grew its restaurant-level nett by 180 ground points, bringing its restaurant-level profitability to 22.8% arsenic of the 3rd quarter. For context, the mean restaurant-level nett borderline typically ranges from 3% to 6%.

Most strikingly to me, it posted its 19th consecutive 4th of income maturation successful Q3. That means that, adjacent arsenic ostentation deed 9.2% successful mid-2022, Shake Shack was capable to turn income that quarter, portion overmuch larger competitors similar McDonald's saw a 3% slump.