Shake Shack said Tuesday that it lost about $3.2 million in sales in June due to nationwide protests against racism and police violence and the resulting curfews.
The company’s stock, which has a market value of $2.2 billion, opened down more than 2%. Shares are down about 10% since the start of the year.
In late May, demonstrators took to the streets of U.S. cities to protest the deaths of George Floyd, and other unarmed Black Americans. Violent clashes with police, looting and property damaged ensued, and mayors responded with citywide curfews. While the protests continue in some cities, curfews were lifted after about a week.
Shake Shack said that it closed some locations and reduced operating hours for others in June in response.
In New York City, home of Shake Shack’s headquarters and many of its most popular locations, Mayor Bill de Blasio followed the lead of several other cities and imposed a nightly curfew for six days. He originally set the curfew for 11 p.m. but moved it up to 8 p.m., leading many restaurants to close early to avoid accidental arrests of their workers.
Shake Shack’s total revenue for the quarter ended June 24 was $91.8 million. The company’s same-store sales plunged 49%. However, Shake Shack’s same-store sales declines improved in May and June after plummeting 64% in April.
During the week ended July 1, same-store sales fell 39%. Restaurants are generating positive cash flow at current sales levels. Sales in New York City are expected to take longer to recover. Shake Shack said the city’s same-store sales fell 58% in the week ended July 1.
Shake Shack had $184 million in cash and marketable securities on hand, as of July 6. Last month, the company repaid $50 million that it drew down from its revolving credit facility. Shake Shack has also resumed development of new U.S. locations.
The company is slated to announce its full third-quarter results on July 30.
