Shake Shake Inc.’s stock rose 2.4% after it said the upcoming retirement of its chief executive has had no impact on its expected fourth-quarter forecast as it launches a search for a replacement.
said it’s working with consultant Korn Ferry for a new chief executive because Randy Garutti plans to retire in 2024 after 20 years at the milkshake and burger chain.
Shake Shack said it will retain Garutti as an advisor following his work as chief executive through the end of 2024 to “ensure a proper transition.”
For the fourth quarter, the company still expects revenue of $276.25 million to $281.75 million, compared to the FactSet consensus estimate of $280.5 million.
The company expects same-store sales in the fourth quarter to rise by the low single-digits over the year-ago period, with about 14 domestic company-operated openings and five licensed openings. Analysts are looking for same-store sales to grow by 1.8%, according to FactSet data.
Shake Shack founder and chairman Danny Meyer said Garutti joined Union Square Hospitality Group 24 years ago as its youngest-ever general manager for Tabla and Union Square Cafe, and next as director of operations for the company’s fine-dining restaurants.
The company then launched a hot dog cart out of 11 Madison Park in 2001, and then three years later, rebranded it as Shake Shack as a kiosk in Madison Square Park in New York City.
Garutti “asked for the ball” to lead Shake Shack, which became an “overnight hit, but it had not dawned on me that we might grow the business beyond its first park location until Randy urged that we do so with a second Shack, nearly five years later,” Meyer said.
“Now, nearly 20 years and over 500 Shacks later, Randy has more than earned the richly deserved opportunity to think about his next act,” Meyer said.
Garutti said he plans to spend more time with his wife and three children.
Mr. Meyer continued, “I don’t have adequate words to express the gratitude I feel for having Randy as my colleague and partner for all these years. He has built and led a globally-beloved brand whose rich culture has deep roots and he has paved the way for our next CEO to build on a rock-solid foundation. The Board and I are now excited to launch a search for his successor, and are heartened that Randy will be at the helm until his successor begins.”