By Evie Liu

Shake Shack stock tumbled on Tuesday after the burger chain cut its outlook, citing a challenging consumer environment and intensifying competition, even as a new summer menu and the World Cup could help drive some customer traffic.

With more than two-thirds of the quarter already complete, Shake Shack said it now expects second-quarter revenue of $415 million to $420 million, down from its previous forecast of $424 million to $428 million.

The update reflects "the current macroeconomic uncertainty, competitive landscape, and related impacts," said CEO Rob Lynch, but he noted that the company's fundamental business drivers remain strong.

Shares fell 11.3% on Tuesday to $55.17, while the S&P 500 was up 0.2%.

The burger chain maintained its forecast for licensing revenue of $13.5 million to $13.7 million. However, it lowered its same-store sales growth outlook for company-operated restaurants to 2.5% to 3%, down from a prior range of 3% to 5%.

Shake Shack expects to open about 16 company-operated locations and eight licensed locations during the quarter.

For the full fiscal year ending Dec. 30, Shake Shack now expects net income of $45 million to $55 million, down from a previous forecast of $50 million to $60 million.

Adjusted earnings before interest, taxes, depreciation and amortization is expected to come between $225 million and $235 million, also lowered from the previous guidance of $230 million to $245 million.

Shake Shack stock has already lost 42% over the past month after it reported a first quarter operating loss. Like much of the restaurant industry, Shake Shack continues to grapple with elevated input costs, especially beef. It has also stepped up investments aimed at driving traffic amid softer restaurant spending.

For the three months ended in March, the burger chain's total revenue rose 14.3% from a year ago, while same-restaurant sales increased 4.6%. Still, the topline came below Wall Street analysts' estimates, sending the stock lower.

At the time, management said April's numbers were hurt by the Easter holiday and spring breaks, but it expected marketing spending in May and June to support its new Smoky BBQ menu -- launched on April 28 for a limited summer run -- and upcoming World Cup promotions.

Investors will watch whether the new BBQ menu and World Cup are bringing in more customers when the company reports second-quarter earnings in early August.

Write to Evie Liu at evie.liu@barrons.com

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June 02, 2026 12:02 ET (16:02 GMT)

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