By Dhirendra Tripathi

Investing.com – Shake Shack stock (NYSE:) plunged 8% Friday after the burger chain’s first-quarter forecast left traders unimpressed.

The company expects a 26%- 30% increase in revenue from the first quarter to $196million to $201.4million. However, there is also a chance of a significant erosion in operating profit margin at Shack level. The OPM forecast suggests that it could drop to 11%, from 15% last year. The margin, which is still down one percentage point, can be seen as 14% on the optimistic side.

While margin erosion might have been even worse, Shake Shack is promising to increase its prices. Reuters quotes CEO Randy Garutti, who said during an earnings call that Shake Shack would increase prices and raise third-party delivery prices for March.

Covid-19 has disrupted operations in its restaurants over successive waves, leaving diners puzzled about the restaurant’s repeated openings and closings. Full-year sales of same-Shacks exceeded 2019, however.

Sales at Shacks owned by domestic companies that are open for 24 months or more define the same-shack model.

“While a return to pre-Covid movement patterns remains uncertain, we are pleased to see improvement through fiscal February, with same-Shack sales up approximately 13% month to date,” Garutti said in a statement, holding out hope for the current quarter.

Revenues rose 29% in the fourth quarter to surpass $203million. Just over $10 million was the net loss, which almost doubled.

As many urban dwellers relocated to the suburbs, Shake Shack’s same-store sales dropped 4%. This helped suburban restaurants to see a 9% increase in comparable sales.