Shake Shack plans to offer its Class A common stock between $14 and $16 per share during its initial public offering (IPO) based on its latest filing with the Securities and Exchange Commission (SEC).
Shake Shack is a burger chain based in New York established by restaurateur Danny Meyer. The company will be trading its shares at the New York Stock Exchange (NYSE) under the symbol “SHAK.”
Based on its filing, Shake Shack intends to sell 5,750,000 shares to raise as much as $92 million (including the 750,000 shares that may be sold if the underwriters’ option to purchase additional shares is granted by the company).
Shake Shack could reach a valuation of as much as $568 million during its public offering based on its 35.5 million outstanding shares. At present, the company has 63 locations in more than 30 cities inside and outside the United States including Dubai and London.
Shake Shack has a compelling lifestyle brand
Shake Shack believed that it has compelling lifestyle brand. The company helped in pioneering the creation of a fine casual category in the restaurant industry.
According to the company, it has been growing successfully due to its versatile Shack formats and designs that are tailored to reflect the core attributes of a community.
Shake Shack growth rate
Over the past three fiscal years ended December 25, 2013, Shake Shack grew from seven locations in two states to 40 Shacks across six states in the U.S, and eight other countries. Its compound annual growth rate (CAGR) was 79%.
Shake Shack said its domestic company-operated locations recorded $5 million in average annual sales in fiscal 2013. The company said its Manhattan Shacks achieve $7.4 million in average annual sales while its non-Manhattan locations achieved $3.8 million.
The company said its compounded revenue grew 62% from $19.5 million to $82.5 million during the three fiscal years. Its net income increased from $0.2 million to $5.4 million and adjusted EBITDA climbed to $14.5 million.
Shake Shack long-term growth plans
Shake Shack believed that it is well-position to achieve sustainable, financial growth driven by opening new domestic company-operated Shacks. Last year, the company opened 10 domestic company operated Shacks.
Shake Shack said it intends to open at least 10 new domestic company-operated locations annually starting in the fiscal 2015. The company is confident that it has the potential to grow its domestic company operated foot print to at least 450 shacks over the long-term.