Shake Shack reported Thursday (Feb. 17) its first quarter revenue forecast fell below estimates because of the omicron variant, a report from Reuters said.
The deadly virus kept diners away and also sparked temporary restaurant closures.
The burger chain’s shares were down 10% in extended training.
While the delta variant eased up by late 2021, omicron wasn’t far behind. That had the effect of dampening customers’ resolve to go out.
“Drivers of our business such as office returns, events, travelers and the general gathering of people that contribute to Shake Shack’s best results [turned] downward,” Chief Executive Officer Randy Garutti said during an earnings call.
The first quarter revenue was forecast at $196 million to $201.4 million. That was down from the average estimate of $210.9 million.
Rising paper and food expenses, as well as labor costs, have also caused Shake Shack trouble. To protect its margins, the company plans to increase prices in March and hike prices on its third-party delivery menu.
Reuters wrote that almost every U.S. restaurant has been raising prices to deal with higher costs.
See also: Robotics Could Integrate With Restaurants’ Digital Systems Within a Year
PYMNTS wrote that restaurants’ labor challenges and rising food costs could be offset by new technology. There could be rapid innovations in restaurant robotics.
With that, Jake Brewer, chief strategy officer at Miso Robotics, a food service robot firm, said the rush for new products might come at the cost of making the best use of what we already have.
“It’s the old adage: One in the hand is worth two in the bush,” said Brewer. “A lot of these brands, Miso included, have several products in hand that we know work and we know solve a big problem in the industry. … [Some] people are chasing that next big innovation for forever, and they never actually get their first thing off the ground.”
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