Shake Shack To Close Underperforming Restaurants

Shake Shack will close some of its underperforming restaurants across three states. The total number of restaurants that will cease operations will be nine.

USA Today reported that six locations in California, two in Texas, and one in Ohio will close. The company explained the reasons for the shutdowns in a statement obtained by the outlet.

“After careful consideration, we’ve made the tough decision to close a small group of Shacks due to various factors, including underperformance,” said Shake Shack CEO Rob Lynch. “We remain focused on supporting our team members through this transition and look forward to continuing our growth, opening many more locations across the country.” 

Lynch also revealed that the chain plans to open 40 new company-owned locations and 40 more licensed locations this year. So, despite the closures, Shake Shack continues to thrive.

In an announcement of the company’s fourth quarter and fiscal year 2023 financial results published in February 2024, the company said, “The Company has expanded to over 510 locations system-wide, including over 330 in 33 U.S. States and the District of Columbia, and over 180 international locations across London, Hong Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo, Seoul and more.”

Shake Shack to close nine underperforming restaurants. The company-owned units in California, Ohio, and Texas will be shuttered by Sept. 25 https://t.co/BmFzlR0F7k pic.twitter.com/r5fvMtlD4w

— Restaurant News (@NRNonline) August 28, 2024

The company’s financial results for the fourth quarter of 2023 also shared the following details.

• Total revenue of $286.2 million, up 20% versus 2022, including $275.8 million of Shack sales and $10.5 million of Licensing revenue.
• System-wide sales of $442.1 million, up 21.4% versus 2022.
• Same-Shack sales up 2.8% from 2022.
• Operating loss of $1.3 million.
• Shack-level operating profit of $54.6 million, or 19.8% of Shack sales.

Currently, Shake Shack does not anticipate closing any further restaurants. The company describes its menu as “elevated versions of American classics using only the best ingredients. It’s known for its delicious made-to-order Angus beef burgers, crispy chicken, hand-spun milkshakes, house-made lemonades, beer, wine, and more. With its high-quality food at a great value, warm hospitality, and a commitment to crafting uplifting experiences, Shake Shack quickly became a cult-brand with widespread appeal.”