Shake Shack’s Profit Margins Took a Hit Due to Increased Labor Costs
Photo Caption: A newly launched Shake Shack food truck. Shake Shack
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Shake Shack chose not to increase menu prices as significantly as some other chains this quarter in order to offset an increase in labor costs, and took a not-so-small hit to its profit margins in the process.
Shake Shack's operating profit margin slid to 22.5 percent in the fourth quarter of 2018, according to the burger chain's fourth quarter and full year 2018 earnings report released on Monday.
The fourth quarter operating profit margin represented the lowest margin that the company has reported all year. Shake Shack CEO Randy Garutti attributed the shrinking margin to the high number of Shacks that were opened in the last few months of 2018, and the higher labor costs that come with new open
