(Bloomberg) -- Shake Shack Inc. shares plummeted the most in almost two years after delivering a disappointing forecast, renewing concerns that the New York burger icon will struggle to become a global chain.
The company expects revenue to top out at about $448 million this year, short of the $457.2 million Wall Street estimate. That sent the stock down as much as 9.5 percent on Friday.
Shake Shack, which celebrity restaurateur Danny Meyer started in Manhattan as an alternative to fast-food burgers, has gained a loyal following in its hometown and other enclaves. But it remains to be seen how much appeal the upscale format will have across the U.S. and around the world. Shake Shack is still building its presence in Europe and Asia, and it plans to enter China next year.
The company is aiming to have at least 200 company-owned restaurants in the U.S. and 120 licensed locations worldwide by 2020, generating more than $700 million in revenue. Its sales last year amounted to $358.8 million.
The chain also has tried to boost sales by adding new menu offerings, such as a chicken club sandwich. Still, its same-store sales -- a key measure -- have been outpaced by fast-food chains such as McDonald’s Corp. and Burger King.
The stock fell as low as $37.30 on Friday, marking its biggest decline since March 2016.
Despite the tepid forecast, earnings topped analysts’ estimates in the fourth quarter. Shake Shack posted profit of 10 cents a share, excluding some items. The average Wall Street projection was 6 cents.
Same-store sales grew 0.8 percent. Analysts predicted a decline of almost 1 percent, according to Consensus Metrix.
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