Shake Shack business hurt by lack of lunchtime traffic
- Hope King, author of Axios Closer
Photo: Joe Raedle/Getty Images
Shake Shack investors dumped the stock today after the company said its second quarter results were hurt by a lack of lunchtime traffic from office workers.
Why it matters: The makeup of the workforce who work from home has hit an equilibrium point in the U.S. Companies dependent on a higher mix of office worker activity will have to adjust their strategies.
Details: Weekday lunch and dinner traffic in Midtown New York City, where the chain originated, is still on average more than 40% below 2019 levels, CFO Katherine Fogertey noted on this morning's earnings call.
- And while other urban markets like Boston and Washington D.C. saw same-store sales grow by more than 25% last quarter, "that recovery would have been even stronger had [things like] return to office, incrementally improved," she said.
- Shake Shack's shares finished down 6.3% Thursday from yesterday's close.
What to watch: Workers in New York City intend to cut the time they spend in offices by half, while those in San Francisco plan to reduce by a little more than half.