Shake Shack Taps Rob Lynch, Former Papa John’s Leader, as New CEO – C-Suite Transitions

“Our best track record is in restaurants. We’ve never lost money. We’ve only made a fortune, interestingly, investing restaurants.”

There were many things that surprised me about Lex Fridman’s interview with billionaire hedge fund manager Bill Ackman, including the 3.5-hour length of the interview,  but this statement about Mr. Ackman’s success with restaurant companies stood out the most.

Investing in individual restaurants is fraught with risks, but I guess some of that risk is mitigated when you are investing in a restaurant chain with a proven business model. It also helps if you get the timing of investing in a company like Chipotle Mexican Grill (CMG) right by pouncing on the opportunity during a moment of temporary weakness. This article is not about Chipotle but rather another fast-casual restaurant chain that is undergoing a CEO transition.

Shake Shack Inc. (SHAK): $94.91
Market Cap: $4.02B

Key Insights

• Rob Lynch will leave Papa John’s and take over for Randy Garutti, who has led Shake Shack for a dozen years as CEO.
• Shake Shack reported same-store sales up 2.8%, and system-wide sales rose 21.4% in Q4 to $442.1 million year-over-year.
• In 2024, Shake Shack expects to grow total revenue by 11% to 15% and open 80 new restaurants.

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