(Bloomberg) -- Shake Shack Inc. shares rose as much as 8.9% Monday on news that activist investor Engaged Capital has taken a stake in the burger chain and is pushing for changes.

The firm owns about 6.6% of the company and is planning a proxy fight seeking three board seats, among other actions to help boost the stock price. Engaged’s campaign follows a period of eroded sales growth and margins as the chain grappled with lower traffic and elevated costs during the pandemic.

Shake Shack is already on the right track to bolster profitability and long-term growth, Robert W. Baird & Co. analyst David Tarantino wrote Monday in a note to clients. Still, investors could look favorably at the activist’s move regardless of whether it’s necessary, he said.

“The mere presence of an activist could help to create the perception of increased management discipline by investors, a dynamic that could help to support near-term sentiment on the shares,” Tarantino wrote.

Shake Shack went public in 2015, with Wall Street betting that the company’s cult following in the New York City area and popularity among young people would propel growth. But it struggled to meet those expectations, and the pandemic dealt another blow as traffic around its mostly urban stores near offices slumped. Inflation for labor and inputs also had an effect.

The company has undertaken initiatives such as adding order kiosks to its stores and launching new items, including a veggie burger, to turn its fortunes around. Coupled with easing costs, the changes should help improve its margins, according to a note by Credit Suisse analyst Lauren Silberman. Key metrics such as same-store sales and earnings per share surpassed analysts’ estimates in the first quarter.

Investors have been focusing on Shake Shack’s ability to transition from a small, fast-growing outfit to a larger corporation that operates more efficiently, Truist analyst Jake Bartlett wrote in a note Monday. Its “rapidly improving” margins and “strong” 2023 guidance suggest the company is doing so successfully, he said.

“We believe SHAK is in a strong position in a proxy fight, given recent strong operating performance,” Bartlett wrote, using the company’s stock symbol.

The company’s shares have risen 70% this year, surpassing the 13% advance of the S&P 500 Restaurants Index.

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