A sign hangs outside of a Shake Shack restaurant on January 28, 2015 in Chicago, Illinois.
Photograph by Scott Olson — Getty Images
By John Kell
August 10, 2015

Shake Shack investors are nibbling on a tasty morsel in the burger chain’s latest earnings report: stronger-than-expected sales growth.

The company’s stock bounced higher in after-hours trading on Monday, after Shake Shack (SHAK) reported a 12.9% jump in same-Shack sales, better than the 8.6% increase analysts expected. Total revenue soared 75% to $48.5 million (analysts expected $42.8 million), while adjusted profit totaled 9 cents per share versus the 3 cents per share Wall Street predicted.

What worked for Shake Shack? A lot.

The New York-based restaurant chain reopened its flagship Madison Square Park restaurant in Manhattan during the quarter. The New York locations generate far higher volumes than restaurants off the island. Sales also benefited from increased demand at existing locations, new restaurant openings and higher licensing revenue from international locations.

Perhaps most importantly, average weekly sales for domestic company-operated Shacks were $102,000 for the second quarter, up from $95,000 for the same quarter last year. That increase was due to higher menu prices, new items on Shack’s menus, and a strong performance for locations that were opened late last year, including in Las Vegas and Chicago.

The stock bounce on Monday is a notable pendulum shift for Shake Shack after shares had been steadily sliding since May. In May, shares for the company – which went public earlier this year – peaked at around $90 per share. They were trading at around $70 at the close but have gained $7 apiece in after hours trading. A few Wall Street banks recently assigned “sell” ratings to Shake Shack’s shares, touting the restaurant’s brand but worrying the stock was too lofty to justify an investment in the company, even with its stellar growth since going public.

The strong results for the latest quarter recast the story for now: Shake Shack is still sharply growing. It is a darling fast-casual restaurant purveyor that is winning over customers even in a tough, competitive market.

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