Carillon Tower Advisers released its second-quarter 2026 investor letter for the Carillon Eagle Small Cap Growth Fund, noting that Shake Shack Inc. detracted from the fund's performance. The investment management firm attributed the underperformance to Shake Shack's earnings coming in below expectations.
The letter highlights that the stock lagged after the earnings miss, a result that contributed to a one-month return of -27.25% for Shake Shack shares. Over the past 52 weeks, the company's shares lost 45.34%. As of September 18, 2026, Shake Shack closed at $54.88 per share, reflecting a market capitalization of $2.35 billion.
Carillon Tower Advisers stated that higher gas prices and the war created a more volatile consumer spending backdrop than Shake Shack had anticipated. The firm also cited rising beef costs as a factor that weighed on the company's results. Shake Shack operates fast-casual restaurants known for burgers, chicken, fries, and shakes, and offers other products including crinkle-cut fries, frozen custard, beer, and wine.
The broader market context for the quarter showed small-cap stocks rallying broadly. The Russell 2000 Growth Index rose 25.71%, outpacing the Russell 2000 Value Index, which gained 17.24%. Information Technology led all sectors with a gain of 46.79%, followed by Real Estate at 25.91%, Industrials at 25.80%, and Health Care at 25.54%. Consumer and defensive sectors lagged behind, while Energy was the sole sector in the red, declining by 2.40%.
Despite the strong quarter, Carillon Tower Advisers noted that midterm election uncertainties could introduce volatility, particularly around data center development. The firm identified data center spending of $1 trillion as a key economic driver that boosts corporate earnings and supports ongoing artificial intelligence infrastructure investments.
According to data cited in the release, 36 hedge fund portfolios held Shake Shack at the end of the second quarter, the same number as in the previous quarter. The publication noted that Shake Shack is not on its list of the 40 Most Popular Stocks Among Hedge Funds. While acknowledging the company's potential, the source stated that certain AI stocks offer greater upside potential and carry less downside risk.