Shake Shack Strategically Manages Beef Costs with Modest Menu Price Adjustments and Robust Sales Performance.

Shake Shack proactively managed rising beef costs through a 2% mid-August menu price increase and selective price adjustments. Analysts revised their EBITDA projections but maintained a Buy rating on the stock. Despite this, restaurant-level margins are expected to stand at 22.5% in 2025 and 23.0% in 2026. Same-store sales estimates were raised to +3.5% for Q3, driven by successful marketing initiatives and the launch of new menu items.

Shake Shack Inc. (NYSE: SHAK) is proactively managing escalating beef costs through a 2% mid-August menu price increase and selective price adjustments. According to an analysis from Truist, the menu price increase was designed to mitigate the sharp 35.4% year-over-year surge in beef prices during the third quarter, the most significant jump since 2021 Shake Shack Battles Rising Beef Costs With Clever Price Moves^[2]. The pricing strategy was selective, with minimal increases on entry-level items and more pronounced jumps on premium offerings. Despite these actions, Truist slightly revised its adjusted EBITDA projections, lowering the 2025 forecast to $215.6 million from $216.3 million and the 2026 forecast to $250.7 million from $251.6 million. Both figures remain comfortably within the company’s full-year guidance.

Analysts, led by Jake Bartlett, maintained a Buy rating on the stock but adjusted their price forecast to $156 from $162 following the earnings estimate revisions. The brokerage anticipates that Shake Shack’s restaurant-level margins will stand at 22.5% in 2025 and 23.0% in 2026, a slight reduction from previous estimates of 22.6% and 23.1% Shake Shack Battles Rising Beef Costs With Clever Price Moves^[2]. These figures align with the company’s guidance and come amid expectations of broader food and paper inflation, which is projected to rise +3.5% in the third quarter and +5.0% in the fourth quarter before moderating.

On the sales front, Truist raised its third-quarter same-store sales estimate to +3.5%, a figure exceeding the +2.8% consensus. This improvement is credited to successful marketing initiatives, including digital promotions like the “Dubai Shake” and “$1 Soda” campaigns, as well as the launch of the new French Onion Soup Burger Shake Shack Battles Rising Beef Costs With Clever Price Moves^[2]. The positive sales momentum builds on a strong second-quarter performance, where the company reported adjusted earnings of 44 cents per share on revenue of $356.5 million, surpassing analyst expectations of 37 cents per share and $352.3 million, respectively.

Shake Shack’s management guided for sales between $358 million and $364 million for the third quarter, aligning with Wall Street’s forecast of $362.9 million. The company also reaffirmed its full-year 2025 revenue outlook of $1.40 billion to $1.50 billion Shake Shack Battles Rising Beef Costs With Clever Price Moves^[2]. Despite store growth lagging slightly in the third quarter with 13 openings against an expected 14, Truist maintained its full-year forecast of 48 new locations.

At a current share price of $92.40, Shake Shack trades at 16.6x NTM EV/EBITDA, a valuation near historic lows and well below its pre-COVID three-year average of 27.5x Shake Shack Battles Rising Beef Costs With Clever Price Moves^[2]. Despite the temporary cost pressures, Truist Securities highlighted that Shake Shack currently trades near its all-time low valuation multiple, suggesting the stock may be undervalued.

Shake Shack is also expanding its global footprint, planning to open its first location in Hawaii on Oahu by 2027 and 15 locations in Vietnam by 2035. The expansion into Vietnam will be through a partnership with Maxim’s Caterers Limited, marking its entry into another Asian market. Additionally, Shake Shack appointed Michael Fanuele as Chief Brand Officer, who will oversee Advertising, Paid Media, and Insights and Analytics, reflecting the company’s strategic focus on brand development Truist Securities lowers Shake Shack stock price target to ...^[1].