By Lisa Baertlein
(Reuters) - Hamburger chain Shake Shack Inc (N:SHAK), known for its indulgent hormone- and antibiotic-free burgers and sides, on Monday reported better-than-expected quarterly profit and sales, sending its shares up 8.3 percent in after-hours trading.
The New York-based chain, founded by celebrity restaurateur Danny Meyer, said sales at established restaurants soared 12.9 percent in the second quarter, far exceeding analysts' calls for a rise of 8.6 percent, according to research firm Consensus Metrix.
For the second quarter, Shake Shack's same restaurant sales included 16 domestic company-operated units - six of which were in New York City - open for 24 months or longer. The company, which has 37 company-operated U.S. shops, attributed the results to menu price increases, the return of crinkle-cut fries, a shake special and strong results from Las Vegas and Chicago.
It now plans to open at least 12 domestic company-operated Shake Shacks a year starting in 2016, up from a previous target of 10 per year. Shake Shack's ability to expand quickly is key to justifying its lofty stock valuation.
Critics worry that the chain's explosive same-store sales growth, a gauge of restaurant performance, will fade as it expands beyond very dense urban areas.
Shake Shack and popular burrito chain Chipotle Mexican Grill Inc (N:CMG) are in the vanguard of restaurants that have carved out a niche among consumers seeking less-processed food that is either organic or raised without chemicals and antibiotics.
Such companies enjoy a so-called "health halo" that diners are willing to pay more for, even though their meals can come with eye-popping calorie counts and significant amounts of saturated fat and sodium.
Shake Shack earned 9 cents per share, excluding items, in the second quarter on total revenue of $48.5 million.
Analysts, on average, expected earnings of 3 cents per share and revenue of $42.8 million.
The company, which has just 71 restaurants around the world, raised other key forecasts.
It boosted its 2015 revenue forecast to a range of $171 million to $174 million from $161 million to $165 million previously. And, it now expects "same-Shack sales" growth in the mid- to high-single digit percentages versus its prior call for growth in the low- to mid-single digits.
Shares in the company, which went public on Jan. 30 with an IPO offering price of $21 and on Monday announced a secondary offering of 4 million shares, were trading at $76.51 in extended trading on Monday.