Shake Shack Inc's same-store sales growth decelerated in the second quarter, as the restaurant sector continues to show signs of weakening.

Same-store sales, which the company defines as a location opened for 24 months or longer, climbed 4.5%, weaker than the 4.8% predicted by analysts surveyed by FactSet. The mark was also less than the 12.9% growth posted during the same period last year and the surprise 9.9% increased registered in the prior quarter.

Shares of Shake shack, down 42% over the past 12 months, fell 9% to $37.38 after hours.

Restaurant operators have been facing an increasingly challenging environment. According to market research from NPD Group Inc., trips to fast-food chains have been mostly flat through June as consumers look to make eating out among their first spending cuts amid uncertain economic times.

People are spending less eating out, a trend that prompted one analyst recently to say the economy is mired in a "restaurant recession." Fast-food chains such as McDonald's Corp. and Restaurant Brands International Inc., owner of Burger King, have already fallen victim following disappointing quarterly results of their own.

The company posted a 37% jump in sales for the three-month period ended in June, leading it to revise its annual guidance for revenue to a range of $253 million to $256 million, up from $245 million to $249 million previously. Analysts surveyed by Thomson Reuters expect annual revenue of $252 million.

The revenue growth for the latest quarter was due to the opening of new locations and same-store sales growth. Seven system-wide Shack locations were opened during the quarter.

The company also upped its estimates for new store openings this year to 18 from 16.

Average weekly sales for domestic company-operated storefronts remained unchanged at $102,000 for the latest quarter.

Overall in the quarter ended in June, the company reported profit of $3.3 million, or 14 cents a share, compared with a year-earlier profit of $1.1 million, or 8 cents a share. Excluding certain items, adjusted earnings on a pro forma basis rose to 14 cents from 9 cents.

Revenue jumped 37% to $66.5 million.

Analysts polled by Thomson Reuters forecast adjusted earnings of 13 cents a share on revenue of $63 million.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

 

(END) Dow Jones Newswires

August 10, 2016 17:45 ET (21:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
McDonalds (NYSE:MCD)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more McDonalds Charts.
McDonalds (NYSE:MCD)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more McDonalds Charts.