Fast-casual restaurant chain Shake Shack, which boasts first-quarter revenues of $155.3 million, up 8.5% year-over-year, on Wednesday appointed Katherine Fogertey as its new CFO, effective June 14. Fogertey succeeds Tara Comonte, who served as Shake Shack CFO since 2017 before leaving in May to take the CEO job at TMRW Life Sciences, a New York-based life-sciences company.
Shake Shack, which has approximately 330 locations in 32 states and the District of Columbia, as well as more than 100 outside the U.S., needs a chief financial officer who will ensure financial stability at the company as it recovers from the pandemic. Though first-quarter sales were up 9.1% year-over-year to $150.7 million, 60% came from orders placed on the company’s app, website and third-party delivery platforms, rather than in-person dining. Shake Shack says the number of patrons dining-in is increasing, but earnings reveal that 2.4 million customers made first-time app and web purchases between mid-March 2020 and the end of fiscal March 2021. Fogertey’s challenge will be simultaneously scaling digital and reinvigorating in-person sales.
“I have always admired the incredible brand Shake Shack has built and maintained, while accelerating its expansion and growth across the globe,” said Fogertey in a statement. “I am beyond thrilled to be joining the team at such a pivotal time in the company’s journey. The Shack brand is stronger than ever and well positioned to capitalize on all the many opportunities ahead.”
As CFO, Fogertey will be responsible for leading financial operations—including accounting and control, financial planning and analysis, operations finance, investor relations and external reporting—as the chain opens new locations around the country. It’s already opened 15 new company-operated restaurants this year, with plans for an additional 20 to 25 by the end of 2021 and 45 to 50 in 2022.
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“With Covid cases stabilizing and more regions steadily loosening restrictions, we are optimistic that improving trends can continue for our industry,” said Shake Shack CEO Randy Garutti in the company’s first-quarter report. “We know that the return of business traffic, events and tourism to cities like NYC, Chicago and LA will be key to our full recovery.”
The restaurant industry has been hit hard by the pandemic. Restaurant and food-service sales are down $290 billion from pre-pandemic levels and about 90,000 restaurants have closed permanently or for the foreseeable future, according to the National Restaurant Association. Shake Shack has been no exception: In the third quarter of 2020, sales sank 17.1% year-over-year to $126.3 million, while revenues fell 17.3% to $130.4 million, a slight improvement over the prior quarter’s decline of 39.9%. At the onset of the pandemic, the chain was forced to temporarily shutter 12 locations.
In April 2020, Shake Shack found itself embroiled in controversy after revealing that it received a $10 million loan from the Small Business Administration’s Paycheck Protection Program. Critics argued that large, publicly traded chains like Shake Shack, as well as PPP recipients such as Potbelly, Ruth’s Chris and Texas Taco Cabana, shouldn’t have taken funding meant to provide financial relief to struggling small businesses, many of which didn’t receive any aid. While Shack Shack returned the PPP money, it unfortunately couldn’t be funneled to small businesses in need.
Fogertey is well equipped to lead the company’s financial recovery. Before joining Shake Shack, she spent more than 15 years at Goldman Sachs where, as a lead analyst covering the restaurant sector, she focused on using technology to create growth opportunities. She also served as a lead analyst for Derivatives and ETF research, and was co-head of the Global Investment Research Women’s Network.
“I am excited to welcome Katie to the Shake Shack leadership team as CFO,” said Garutti in a statement announcing Fogertey’s appointment. “She brings extensive financial experience, knowledge of our brand and deep industry and capital markets insights. I know Katie will be a natural fit in our Shake Shack culture, and I’m looking forward to working with her and our entire team as our business enters a new phase of exciting growth ahead.”