Shares of Shake Shack (NYSE:SHAK) dropped sharply on Thursday, falling as much as 30.4% to $67.21 and reaching a level not seen in more than two years for the fast-casual burger chain.
The company reported a swing to a quarterly loss of $0.01 per share in the first quarter, compared with a profit of $0.11 per share in the same period last year. The quarter's results came in below analyst expectations for both adjusted earnings and revenue.
In separate corporate news, Shake Shack said it has named Michelle Hook as its new chief financial officer, effective May 11. Hook will replace Katherine Fogertey, who stepped down from the CFO role in early March.
The stock entered the session having gained 18.9% year to date, but the magnitude of Thursday's decline put the share price on track for a record low if the losses remain through the close of trading.
Market reaction
Investors pushed the share price down more than 30% intraday following the earnings release and the disclosure that the company missed analysts' estimates for adjusted profit and revenue. The intraday low of $67.21 represents the lowest trading level for Shake Shack in over two years.
Quarterly results
Shake Shack recorded a per-share loss of one cent in the first quarter. That compares with a profit of 11 cents per share in the prior-year period. The company acknowledged that both adjusted profit and revenue failed to meet analyst forecasts, contributing to the negative market response.
Leadership change
Effective May 11, Michelle Hook will assume the role of chief financial officer. She succeeds Katherine Fogertey, whose departure from the position occurred in early March. The company did not provide additional details about the transition timetable beyond the effective date for Hook.
Summary of key facts
- Shares fell as much as 30.4% to $67.21, a more-than-two-year low.
- Shake Shack reported a first-quarter loss of $0.01 per share versus a $0.11 per-share profit a year earlier.
- The company missed analyst estimates for adjusted earnings and revenue, and announced Michelle Hook as incoming CFO effective May 11.
The information above is based on the company-reported results and the corporate announcement provided by Shake Shack. The stock's year-to-date gain of 18.9% prior to Thursday's drop was erased by the magnitude of the decline if losses hold through the close.