Shake Shack rocketed 26% after its Q4 earnings beat Thursday, triggering a special trading rule. Elsewhere, Wendy's retreated and Burger King parent Restaurant Brands International rose after their reports. Texas Roadhouse spiked late Thursday after edging out views and raising its dividend.
Shake Shack
Shake Shack reported earnings of 15 cents per share, improved from a loss of 27 cents per share a year earlier. Adjusted earnings firmed to 2 cents per share from a loss of 6 cents per share last year. That beat FactSet forecasts of 1 cent.
The New York-based burger chain reported a 20% jump in revenue to $286.2 million, topping views of $280.2 million.
Same-store sales rose 2.8% while analysts only expected a 1.6% increase. Shake Shack added 15 company-operated locations during the quarter and nine licensed franchise locations. The company also reported its operating profit margin rose by 80 basis points to 19.8%.
Fiscal 2023 earnings came out to 47 cents per share compared to a loss of 61 cents the year before. Adjusted earnings rose to 37 cents per share from a loss of 31 cents in 2022. Total revenue leapt 20.8% to a record $1.09 billion. FactSet analysts expected full-year earnings of 35 cents per share on $1.08 billion in sales.
SHAK stock vaulted 26% Thursday, putting it 28% beyond the 76.74 buy point in a cup-with-handle base.
Normally, a stock that climbs 20% or more above a buy point signals investors to consider taking some profits on the shares. But Shake Shack's move Thursday triggered a somewhat unusual rule called the eight-week hold rule.
Under that rule, if a stock moves 20% or more above a buy point in two weeks or less, investors should hold that stock for eight weeks from the breakout. Past research indicates strong chances that the stock will move even higher. There are some special caveats to the hold rule so, as always, investors should check IBD's Investor's Corner articles for specifics.
SHAK stock pushed back above the cup-with-handle entry on Feb. 8 after originally clearing the buy point on Jan. 29.
Wendy's
Wendy's earnings fell 4.5% to 22 cents per share adjusted after three quarters of declining growth. Revenue ticked up 0.8% to $540.7 billion, its growth slowing for the fourth consecutive quarter.
FactSet analysts expected earnings of 23 cents per share on $546.8 million in sales.
Wendy's attributed the revenue growth to an increase in advertising funds revenue and franchise royalty sales. But the results were partially offset by lower franchise rental income, which was driven by fewer lease agreements.
Same-store sales growth in the U.S. slowed to 0.9% from 5.9% last year. International same-store sales, which excludes Argentina, increased 4.3% after a 9.9% gain for Q4 2022. Global comparable sales growth slowed to 1.3% from 6.4% last year.
Wendy's expects 2024 global same-store sales growth to range from 5% to 6%. The fast food chain guided 2024 adjusted earnings between 98 cents per share and $1.02 per share, compared to 97 cents per share for 2023. Wendy's sees free cash flow between $280 million and $290 million, up from $274.3 million in 2023.
The outlook came in below FactSet forecasts of adjusted earnings of $1.11 per share. Analysts expect full-year sales will rise 4.2% to $2.27 billion.
WEN stock eased 1.5% Thursday, dropping below its 21-day exponential moving average and 10-day line. Shares are trading well below their 50-day line and 200-day moving average.
Wendy's slumped 2.5% so far this year.
Restaurant Brands International
Burger King, Tim Hortons and Popeyes Louisiana Kitchen parent company Restaurant Brands International reported adjusted earnings of 75 cents per share early Thursday, increasing 4.2% over the year and edging out views of 73 cents per share. Fourth-quarter revenue rose about 8% to $1.82 billion, just ahead of views of $1.8 billion.
Burger King same-store sales growth accelerated to 6.3% for the quarter from 5% last year. Popeyes same-store sales increased 5.5% from its 1.7% gain last year.
Tim Hortons comparable sales growth eased to 8.4% in Q4 from 10.1%.
QSR stock reversed to slip 0.7% Thursday, pushing back below its 50-day moving average, 21-day line and 10-day line. Shares are extended above a 71.50 buy point for a cup-with-handle base following its Dec. 1 breakout.
Restaurant Brands stock is down 2.7% for the year.
Meanwhile, full-service restaurant chain Texas Roadhouse topped Q4 views late Thursday, reporting a 21% earnings increase to $1.08 per share. Total revenue climbed 15.3% to $1.164 billion, accelerating after two quarters of slowing growth. The results just edged out FactSet expectations of $1.07 per share on $1.16 billion in sales.
Texas Roadhouse also announced it raised its dividend by 11% from 2023 to 61 cents per share, which is payable March 26.
TXRH stock jumped 7.8% late Thursday. Shares rose 1.2% during Thursday trade. Texas Roadhouse is extended well above a 116.20 cup-with-handle entry following its mid-December breakout.
Elsewhere, Bloomberg on Wednesday reported that Roark Capital Group is mulling taking Inspire Brands public in late 2024 or 2025. Inspire owns Dunkin', Arby's and Jimmy John's brands and could fetch a valuation estimated around $20 billion.
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