A rib heist leaves Shake Shack in a pickle

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A rib theft left Shake Shack scrambling to find supplies for its BBQ Boneless Baby Back Rib Sandwich last month. | Photo courtesy of Shake Shack.

Someone in Mexico really loves ribs, and that proved to be a big problem for … Shake Shack?

Indeed. An apparent theft of a truckload of barbecue ribs in Mexico last month sent the company scrambling to meet demand for its premium, BBQ Boneless Baby Back Rib Sandwich. 

“We thought we were going to run out of barbecue ribs,” Rob Lynch, Shake Shack’s CEO, told analysts at the William Blair Growth Stock Conference on Thursday, according to a transcript on the financial services site AlphaSense. “And we almost did, because a truckload of them got stolen in Mexico. 

“I mean, you can’t make this up.”

Shake Shack introduced its sandwich in late April as part of a line of barbecue-themed items, including a BBQ Burger, BBQ Chicken Sandwich, Spicy Fries with Ranch, Spicy Cheese Fries with Ranch and Mac and Cheese. 

The rib sandwich was priced between $12.99 and $14.99, depending on the market. 

The theft created some real problems, both for the company’s sales projections and for the employees forced to source more ribs.

Lynch told investors that the company scrambled to source enough ribs to meet demand for the sandwich. “We have the supply chain, all hands on deck, to make sure we have this stuff because it’s selling like crazy,” Lynch said. “And I get a call and they’re like, ‘Rob, you’re not going to believe this.’ They said 3,000 cases of barbecue ribs just got stolen in Mexico.”

Shake Shack did make fun of the theft at the time on social media, once declaring a happy National BBQ Day “to everyone except the people who stole a truckload of over 1,000 racks of our boneless baby back ribs.” 

The company also commented at Kit Kat, which suffered from a product theft of its own back in March that ended up as social media fodder for a time.

The rib sandwich, which remains on the menu for a limited time, did prove popular with customers, at least initially. Lynch said that, as of May 7, sales were up 8% at the chain. While the product was expensive, customers were apparently willing to pay the higher price.

That said, the quarter since then hasn’t quite gone to plan. Shake Shack earlier this week downgraded its expectations for sales and profitability, both for the current quarter and for the full year. 

The company blamed the economic environment for keeping sales back while soaring beef costs and growing use of fuel surcharges by distributors hurt profits. 

The revision sent the company’s stock plunging. Shake Shack stock is down 18% over the past week and more than 35% so far this year. The company hardly needed rib thieves to add any more problems.

“That’s kind-of how this quarter has gone,” Lynch said.

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