Shake Shack’s EPS Growth Could Decline in 2019

In the first three quarters of 2018, Shake Shack (SHAK) posted an adjusted EPS of $0.65—38.3% growth from $0.47 in the first three quarters of 2017. The EPS growth was driven by the revenue growth and lower effective tax rate. The growth was partially offset by a decline in the EBIT (earnings before interest and tax) margins. Increased labor expenses, other operating costs, and general and administrative expenses lowered Shake Shack’s EBIT margins during the first three quarters of 2018.