Shake Shack is closing 9 underperforming locations. Here’s the full list of impacted cities

Fast-casual burger chain Shake Shack said yesterday that it will close nine of its company-owned restaurants in California, Ohio, and Texas. This decision follows a recent evaluation that identified these locations as underperforming, partly due to shifts in local trade areas and customer overlap from nearby locations. The underperforming restaurants—or “Shacks” as the company calls them—are not expected to be profitable in the near future.

Locations are slated for closure in the following areas, Shake Shack told Fast Company Wednesday:

• Oakland (CA)
• Bunker Hill (CA)
• Downtown Culver City (CA)
• Koreatown (CA)
• Silverlake (CA)
• Westfield Topanga (CA)
• Polaris (OH)
• Houston Galleria (TX)
• Montrose (TX)

Why is Shake Shack closing these locations?

According to the restaurant chain, the move aims to improve the overall performance in these states and support future growth. The closures are intended to streamline operations and boost profitability, and are not expected to affect plans to open new restaurants in these areas.

Shake Shack anticipates pretax charges in the range of $28 to $30 million for the third quarter as a result of these closures. Cash costs are projected to be between $14 and $15.2 million; they include lease termination fees and obligations on future lease obligations, Shake Shack said.

Despite the impact of the closures, Shake Shack has reaffirmed a commitment to its growth strategy. The company’s full-year guidance remains unchanged, and it continues to pursue its planned number of new restaurant openings for fiscal year 2024.

Shares of Shake Shack were little changed by the news, which was reported earlier by MarketWatch, Seeking Alpha, and elsewhere. The stock is up almost 44% year to date as of the time of this writing.

The company expects to complete the shutdowns by September 25, 2024. The affected employees have been informed, with management offered positions at other locations and hourly staff eligible for rehire or receiving up to 60 days of pay if not transferring.