Shake Shack Inc. SHAK is set to report first-quarter results on May 12, after the market closes. Last quarter, the company posted a positive earnings surprise of 14.29%. In fact, the company has beaten earnings estimates in all of the four trailing quarters with an average beat of 121.43%. The company started trading on Jan 30, 2015. Let’s see what’s in store for the upcoming announcement. Factors to Consider Shake Shack’s cult following and successful expansion into various cities around the world has driven traffic, which in turn led to higher comps. Also, menu innovation and limited time offerings are expected to drive comps in the to-be-reported quarter. Moreover, the company is poised to cash in on the surging popularity of the U.S. fast-casual market and boost earnings on the back of lucrative store economics, brand strength and a solid balance sheet. The company is known for using 100% all-natural Angus beef that is never fed hormones or antibiotics. Along with its signature dishes such as cheese crinkle fries, it serves shakes and frozen custard. Shake Shack is also focusing on its highly valued millennial consumers who prefer brand experience and healthy food. Such efforts are expected to aid comps in the quarter. However, first-quarter margins are expected to remain under pressure due to elevated labor costs, which are expected to rise along with minimum wage increases across the regions where the company operates. Earnings Whispers Our proven model does not conclusively show that Shake Shack will beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below. Zacks ESP: Shake Shack has an Earnings ESP 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 6 cents. Zacks Rank: Though Shake Shack’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult. We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stock) going into the earnings announcement, especially when the company is seeing negative estimate revisions. Stocks to Consider Here are some stocks in the restaurant industry which, as per our model, have the right combination of elements to post an earnings beat this quarter: The Wendy's Company WEN, with an Earnings ESP of +16.67% and a Zacks Rank #2. Chuy's Holdings, Inc. CHUY, with an Earnings ESP of +3.23% and a Zacks Rank #2. Red Robin Gourmet Burgers Inc. RRGB, with an Earnings ESP of +0.91% and a Zacks Rank #3. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RED ROBIN GOURM (RRGB): Free Stock Analysis Report WENDYS CO/THE (WEN): Free Stock Analysis Report SHAKE SHACK INC (SHAK): Free Stock Analysis Report CHUYS HOLDINGS (CHUY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research