- Total revenue of $290.5 million, up 14.7% versus 2023,
including $280.6 million of Shack sales and $9.9 million of
Licensing revenue.
- System-wide sales of $443.3 million, up 12.3% versus
2023.
- Same-Shack sales up 1.6% versus 2023, with trends
improving each month of the quarter. April SSS grew 4.9%
year-over-year.
- Operating income of $0.0 million, versus an operating
loss of $3.2 million in 2023.
- Restaurant-level profit(1) of $54.7 million, or 19.5% of
Shack sales.
- Net income of $2.2 million versus a net loss of $1.6
million in 2023.
- Adjusted EBITDA(1) of $35.9 million, up 30.2% versus
2023.
- Net income attributable to Shake Shack Inc. of $2.0
million, or earnings of $0.05 per diluted share.
- Adjusted pro forma net income(1) of $5.6 million, or
earnings of $0.13 per fully exchanged and diluted share.
- Opened four new Company-operated Shacks, including two
drive-thrus. Opened four new licensed Shacks.
Shake Shack Inc. (“Shake Shack” or the “Company”) (NYSE:
SHAK) has posted its results for the first quarter of 2024 in a
Shareholder Letter in the Quarterly Results section of the
Company's Investor Relations website, which can be found here: Q1
2024 Shake Shack Shareholder Letter.
Shake Shack will host a conference call at 8:00 a.m. ET. Hosting
the call will be Randy Garutti, Chief Executive Officer, and
Katherine Fogertey, Chief Financial Officer. The conference call
can be accessed live over the phone by dialing (877) 407-0792, or
for international callers by dialing (201) 689-8263. A replay of
the call will be available until May 09, 2024 by dialing (844)
512-2921 or for international callers by dialing (412) 317-6671;
the passcode is 13745222.
The live audio webcast of the conference call will be accessible
in the Events & Presentations section of the Company's Investor
Relations website at investor.shakeshack.com. An archived replay of
the webcast will also be available shortly after the live event has
concluded.
(1)
Restaurant-level profit, Adjusted EBITDA
and Adjusted pro forma net income (loss) are non-GAAP measures. A
reconciliation to the most directly comparable financial measures
presented in accordance with GAAP is set forth in the schedules
accompanying this release. See “Non-GAAP Financial Measures”
below.
About Shake Shack
Shake Shack serves elevated versions of American classics using
only the best ingredients. It’s known for its delicious
made-to-order Angus beef burgers, crispy chicken, hand-spun
milkshakes, house-made lemonades, beer, wine, and more. With its
high-quality food at a great value, warm hospitality, and a
commitment to crafting uplifting experiences, Shake Shack quickly
became a cult-brand with widespread appeal. Shake Shack’s purpose
is to Stand For Something Good®, from its premium ingredients and
employee development, to its inspiring designs and deep community
investment. Since the original Shack opened in 2004 in NYC’s
Madison Square Park, the Company has expanded to over 520 locations
system-wide, including over 335 in 33 U.S. States and the District
of Columbia, and 185 international locations across London, Hong
Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo,
Seoul and more.
Skip the line with the Shack App, a mobile ordering app
that lets you save time by ordering ahead! Guests can select their
location, pick their food, choose a pickup time and their meal will
be cooked-to-order and timed to arrival. Available on iOS and
Android.
Definitions
The following definitions apply to these terms as used in this
release:
"Shack sales" is defined as the aggregate sales of food,
beverages, gift card breakage income and Shake Shack branded
merchandise at Company-operated Shacks and excludes sales from
licensed Shacks.
“System-wide sales” is an operating measure and consists of
sales from Company-operated Shacks and licensed Shacks. The Company
does not recognize the sales from licensed Shacks as revenue. Of
these amounts, revenue is limited to licensing revenue based on a
percentage of sales from licensed Shacks, as well as certain
up-front fees, such as territory fees and opening fees.
"Same-Shack sales" represents Shack sales for the comparable
Shack base, which is defined as the number of Company-operated
Shacks open for 24 full fiscal months or longer. For consecutive
days that Shacks were temporarily closed, the comparative period
was also adjusted.
"Restaurant-level profit," a non-GAAP measure, also formerly
referred to as Shack-level operating profit, is defined as Shack
sales less Shack-level operating expenses including Food and paper
costs, Labor and related expenses, Other operating expenses and
Occupancy and related expenses.
"Restaurant-level profit margin," a non-GAAP measure, also
formerly referred to as Shack-level operating profit margin, is
defined as Shack sales less Shack-level operating expenses
including Food and paper costs, Labor and related expenses, Other
operating expenses and Occupancy and related expenses as a
percentage of Shack sales.
“EBITDA,” a non-GAAP measure, is defined as Net income (loss)
before interest expense (net of interest income), Income tax
expense (benefit), and Depreciation and amortization expense.
“Adjusted EBITDA,” a non-GAAP measure, is defined as EBITDA (as
defined above), excluding equity-based compensation expense,
Impairment and loss on disposal of assets, amortization of
cloud-based software implementation costs, as well as certain
non-recurring items that the Company does not believe directly
reflect its core operations and may not be indicative of the
Company's recurring business operations.
"Adjusted pro forma net income," a non-GAAP measure, represents
Net income (loss) attributable to Shake Shack Inc. assuming the
full exchange of all outstanding SSE Holdings, LLC membership
interests ("LLC Interests") for shares of Class A common stock,
adjusted for certain non-recurring items that the Company does not
believe are directly reflected to its core operations and may not
be indicative of its recurring business operations.
SHAKE SHACK INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands,
except share and per share amounts)
March 27
December 27
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
260,203
$
224,653
Marketable securities
24,570
68,561
Accounts receivable, net
14,458
16,847
Inventories
5,073
5,404
Prepaid expenses and other current
assets
21,885
18,967
Total current assets
326,189
334,432
Property and equipment, net of accumulated
depreciation of $401,132 and $376,760, respectively
537,621
530,995
Operating lease assets
410,254
398,296
Deferred income taxes, net
329,956
326,208
Other assets
14,812
15,926
TOTAL ASSETS
$
1,618,832
$
1,605,857
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
15,163
$
22,273
Accrued expenses
57,366
54,742
Accrued wages and related liabilities
19,249
20,945
Operating lease liabilities, current
50,780
49,004
Other current liabilities
18,525
17,103
Total current liabilities
161,083
164,067
Long-term debt
245,898
245,636
Long-term operating lease liabilities
476,704
464,533
Liabilities under tax receivable
agreement, net of current portion
236,728
235,613
Other long-term liabilities
26,126
26,638
Total liabilities
1,146,539
1,136,487
Commitments and contingencies
Stockholders' equity:
Preferred stock, no par value—10,000,000
shares authorized; none issued and outstanding as of March 27, 2024
and December 27, 2023.
—
—
Class A common stock, $0.001 par
value—200,000,000 shares authorized; 39,635,382 and 39,474,315
shares issued and outstanding as of March 27, 2024 and December 27,
2023, respectively.
40
39
Class B common stock, $0.001 par
value—35,000,000 shares authorized; 2,801,013 and 2,834,513 shares
issued and outstanding as of March 27, 2024 and December 27, 2023,
respectively.
3
3
Additional paid-in capital
427,530
426,601
Retained earnings
18,817
16,777
Accumulated other comprehensive loss
(4
)
(3
)
Total stockholders' equity attributable to
Shake Shack Inc.
446,386
443,417
Non-controlling interests
25,907
25,953
Total equity
472,293
469,370
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
1,618,832
$
1,605,857
SHAKE SHACK INC. CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED) (in
thousands, except per share amounts)
Thirteen Weeks Ended
March 27 2024
March 29 2023
Shack sales
$
280,552
96.6
%
$
244,254
96.4
%
Licensing revenue
9,952
3.4
%
9,024
3.6
%
TOTAL REVENUE
290,504
100.0
%
253,278
100.0
%
Shack-level operating expenses(1):
Food and paper costs
80,253
28.6
%
71,772
29.4
%
Labor and related expenses
81,509
29.1
%
74,264
30.4
%
Other operating expenses
41,856
14.9
%
34,936
14.3
%
Occupancy and related expenses
22,188
7.9
%
18,583
7.6
%
General and administrative expenses
35,944
12.4
%
31,311
12.4
%
Depreciation and amortization expense
25,441
8.8
%
21,322
8.4
%
Pre-opening costs
2,753
0.9
%
3,557
1.4
%
Impairment and loss on disposal of
assets
526
0.2
%
722
0.3
%
TOTAL EXPENSES
290,470
100.0
%
256,467
101.3
%
NET INCOME (LOSS) FROM
OPERATIONS
34
—
%
(3,189
)
(1.3
)%
Other income, net
3,206
1.1
%
2,837
1.1
%
Interest expense
(508
)
(0.2
)%
(403
)
(0.2
)%
NET INCOME (LOSS) BEFORE INCOME
TAXES
2,732
0.9
%
(755
)
(0.3
)%
Income tax expense
518
0.2
%
867
0.3
%
NET INCOME (LOSS)
2,214
0.8
%
(1,622
)
(0.6
)%
Less: Net income (loss) attributable to
non-controlling interests
174
0.1
%
(88
)
—
%
NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE
SHACK INC.
$
2,040
0.7
%
$
(1,534
)
(0.6
)%
Earnings (Loss) per share of Class A
common stock:
Basic
$
0.05
$
(0.04
)
Diluted
$
0.05
$
(0.04
)
Weighted-average shares of Class A common
stock outstanding:
Basic
39,515
39,332
Diluted
41,259
39,332
_______________
(1) As a percentage of Shack sales.
SHAKE SHACK INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in
thousands)
Thirteen Weeks Ended
March 27 2024
March 29 2023
OPERATING ACTIVITIES
Net income (loss) (including amounts
attributable to non-controlling interests)
$
2,214
$
(1,622
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization expense
25,441
21,322
Amortization of debt issuance costs
262
262
Amortization of cloud computing asset
518
439
Non-cash operating lease cost
18,490
16,075
Equity-based compensation
3,642
3,802
Deferred income taxes
(131
)
1,917
Non-cash interest
(164
)
58
Gain on sale of equity securities
—
(81
)
Net amortization of discount on
held-to-maturity securities
(370
)
—
Impairment and loss on disposal of
assets
526
722
Changes in operating assets and
liabilities:
Accounts receivable
2,389
3,354
Inventories
331
(210
)
Prepaid expenses and other current
assets
(2,757
)
(1,580
)
Other assets
(650
)
(1,218
)
Accounts payable
(3,760
)
(5,799
)
Accrued expenses
2,027
(2,018
)
Accrued wages and related liabilities
(1,696
)
1,068
Other current liabilities
709
(2,389
)
Operating lease liabilities
(17,213
)
(16,830
)
Other long-term liabilities
857
2,548
NET CASH PROVIDED BY OPERATING
ACTIVITIES
30,665
19,820
INVESTING ACTIVITIES
Purchases of property and equipment
(33,054
)
(34,326
)
Maturities of held-to-maturity marketable
securities
44,361
—
Purchases of equity securities
—
(690
)
Sales of equity securities
—
81,478
NET CASH PROVIDED BY INVESTING
ACTIVITIES
11,307
46,462
FINANCING ACTIVITIES
Payments on principal of finance
leases
(910
)
(807
)
Distributions paid to non-controlling
interest holders
(145
)
(49
)
Net proceeds from stock option
exercises
474
113
Employee withholding taxes related to net
settled equity awards
(5,840
)
(2,626
)
NET CASH USED IN FINANCING
ACTIVITIES
(6,421
)
(3,369
)
Effect of exchange rate changes on cash
and cash equivalents
(1
)
(4
)
INCREASE IN CASH AND CASH
EQUIVALENTS
35,550
62,909
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD
224,653
230,521
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
260,203
$
293,430
SHAKE SHACK INC. NON-GAAP FINANCIAL
MEASURES (UNAUDITED)
To supplement the consolidated financial statements, which are
prepared and presented in accordance with U.S. generally accepted
accounting principles (“GAAP”), the Company uses the following
non-GAAP financial measures: Restaurant-level profit,
Restaurant-level profit margin, EBITDA, adjusted EBITDA, adjusted
EBITDA margin, adjusted pro forma net income (loss) and adjusted
pro forma earnings (loss) per fully exchanged and diluted share
(collectively the "non-GAAP financial measures").
Restaurant-Level Profit
Restaurant-level profit, formerly referred to as Shack-level
operating profit, is defined as Shack sales less Shack-level
operating expenses including Food and paper costs, Labor and
related expenses, Other operating expenses and Occupancy and
related expenses.
How This Measure Is Useful When used in conjunction with
GAAP financial measures, Restaurant-level profit and
Restaurant-level profit margin are supplemental measures of
operating performance that the Company believes are useful measures
to evaluate the performance and profitability of its Shacks.
Additionally, Restaurant-level profit and Restaurant-level profit
margin are key metrics used internally by management to develop
internal budgets and forecasts, as well as assess the performance
of its Shacks relative to budget and against prior periods. It is
also used to evaluate employee compensation as it serves as a
metric in certain performance-based employee bonus arrangements.
The Company believes presentation of Restaurant-level profit and
Restaurant-level profit margin provides investors with a
supplemental view of its operating performance that can provide
meaningful insights to the underlying operating performance of the
Shacks, as these measures depict the operating results that are
directly impacted by the Shacks and exclude items that may not be
indicative of, or are unrelated to, the ongoing operations of the
Shacks. It may also assist investors to evaluate the Company's
performance relative to peers of various sizes and maturities and
provides greater transparency with respect to how management
evaluates the business, as well as the financial and operational
decision-making.
Limitations of the Usefulness of this Measure
Restaurant-level profit and Restaurant-level profit margin may
differ from similarly titled measures used by other companies due
to different methods of calculation. Presentation of
Restaurant-level profit and Restaurant-level profit margin is not
intended to be considered in isolation or as a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP. Restaurant-level profit excludes certain
costs, such as General and administrative expenses and Pre-opening
costs, which are considered normal, recurring cash operating
expenses and are essential to support the operation and development
of the Company's Shacks. Therefore, this measure may not provide a
complete understanding of the Company's operating results as a
whole and Restaurant-level profit and Restaurant-level profit
margin should be reviewed in conjunction with the Company's GAAP
financial results.
A reconciliation of Restaurant-level profit to Income (loss)
from operations, the most directly comparable GAAP financial
measure, is set forth below.
Thirteen Weeks Ended
(dollar amounts in thousands)
March 27 2024
March 29 2023
Income (loss) from operations
$
34
$
(3,189
)
Less:
Licensing revenue
9,952
9,024
Add:
General and administrative expenses
35,944
31,311
Depreciation and amortization expense
25,441
21,322
Pre-opening costs
2,753
3,557
Impairment and loss on disposal of
assets
526
722
Restaurant-level profit
$
54,746
$
44,699
Total revenue
$
290,504
$
253,278
Less: Licensing revenue
9,952
9,024
Shack sales
$
280,552
$
244,254
Restaurant-level profit margin(1)
19.5
%
18.3
%
(1) As a percentage of Shack
sales.
SHAKE SHACK INC. NON-GAAP FINANCIAL
MEASURES (UNAUDITED)
EBITDA and Adjusted EBITDA EBITDA, a non-GAAP measure, is
defined as Net income (loss) before interest expense (net of
interest income), Income tax expense (benefit) and Depreciation and
amortization expense. Adjusted EBITDA, a non-GAAP measure, is
defined as EBITDA (as defined above) excluding equity-based
compensation expense, Impairment and loss on the disposal of
assets, amortization of cloud-based software implementation costs,
as well as certain non-recurring items that the Company does not
believe directly reflect its core operations and may not be
indicative of the Company's recurring business operations.
How These Measures Are Useful When used in conjunction
with GAAP financial measures, EBITDA and adjusted EBITDA are
supplemental measures of operating performance that the Company
believes are useful measures to facilitate comparisons to
historical performance and competitors' operating results. Adjusted
EBITDA is a key metric used internally by management to develop
internal budgets and forecasts and also serves as a metric in its
performance-based equity incentive programs and certain bonus
arrangements. The Company believes presentation of EBITDA and
adjusted EBITDA provides investors with a supplemental view of the
Company's operating performance that facilitates analysis and
comparisons of its ongoing business operations because they exclude
items that may not be indicative of the Company's ongoing operating
performance.
Limitations of the Usefulness of These Measures EBITDA
and adjusted EBITDA may differ from similarly titled measures used
by other companies due to different methods of calculation.
Presentation of EBITDA and adjusted EBITDA is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with
GAAP. EBITDA and adjusted EBITDA exclude certain normal recurring
expenses. Therefore, these measures may not provide a complete
understanding of the Company's performance and should be reviewed
in conjunction with the GAAP financial measures.
A reconciliation of EBITDA and adjusted EBITDA to Net income
(loss), the most directly comparable GAAP measure, is set forth
below.
Thirteen Weeks Ended
(dollar amounts in thousands)
March 27 2024
March 29 2023
Net income (loss)
$
2,214
$
(1,622
)
Depreciation and amortization expense
25,441
21,322
Interest expense, net
(27
)
403
Income tax expense
518
867
EBITDA
$
28,146
$
20,970
Equity-based compensation
3,642
3,802
Amortization of cloud-based software
implementation costs
518
439
Impairment and loss on disposal of
assets
526
722
Legal settlements(1)
—
1,004
CEO transition costs
479
—
Restatement costs(2)
1,391
—
Other(3)
1,183
628
Adjusted EBITDA
$
35,885
$
27,565
Adjusted EBITDA margin(4)
12.4
%
10.9
%
(1) Expenses incurred to establish
accruals related to the settlements of legal matters.
(2) Expenses incurred related to the
restatement of prior periods in the 2023 Form 10-K.
(3) Expenses incurred for professional
fees related to non-recurring matters.
(4) Calculated as a percentage of Total
revenue, which was $290.5 million and $253.3 million for the
thirteen weeks ended March 27, 2024 and March 29, 2023,
respectively.
SHAKE SHACK INC. NON-GAAP FINANCIAL
MEASURES (UNAUDITED)
Adjusted Pro Forma Net Income (Loss) and Adjusted Pro Forma
Earnings (Loss) Per Fully Exchanged and Diluted Share Adjusted
pro forma net income (loss) represents Net income (loss)
attributable to Shake Shack Inc. assuming the full exchange of all
outstanding SSE Holdings, LLC membership interests ("LLC
Interests") for shares of Class A common stock, adjusted for
certain non-recurring items that the Company does not believe are
directly related to its core operations and may not be indicative
of recurring business operations. Adjusted pro forma earnings
(loss) per fully exchanged and diluted share is calculated by
dividing adjusted pro forma net income (loss) by the
weighted-average shares of Class A common stock outstanding,
assuming the full exchange of all outstanding LLC Interests, after
giving effect to the dilutive effect of outstanding equity-based
awards.
How These Measures Are Useful When used in conjunction
with GAAP financial measures, adjusted pro forma net income (loss)
and adjusted pro forma earnings (loss) per fully exchanged and
diluted share are supplemental measures of operating performance
that the Company believes are useful measures to evaluate
performance period over period and relative to its competitors. By
assuming the full exchange of all outstanding LLC Interests, the
Company believes these measures facilitate comparisons with other
companies that have different organizational and tax structures, as
well as comparisons period over period because it eliminates the
effect of any changes in Net income (loss) attributable to Shake
Shack Inc. driven by increases in its ownership of SSE Holdings,
which are unrelated to the Company's operating performance, and
excludes items that are non-recurring or may not be indicative of
ongoing operating performance.
Limitations of the Usefulness of These Measures Adjusted
pro forma net income (loss) and adjusted pro forma earnings (loss)
per fully exchanged and diluted share may differ from similarly
titled measures used by other companies due to different methods of
calculation. Presentation of adjusted pro forma net income (loss)
and adjusted pro forma earnings (loss) per fully exchanged and
diluted share should not be considered alternatives to Net income
(loss) and earnings (loss) per share, as determined under GAAP.
While these measures are useful in evaluating the Company's
performance, it does not account for the earnings attributable to
the non-controlling interest holders and therefore does not provide
a complete understanding of the Net income (loss) attributable to
Shake Shack Inc. Adjusted pro forma net income (loss) and adjusted
pro forma earnings (loss) per fully exchanged and diluted share
should be evaluated in conjunction with GAAP financial results.
A reconciliation of adjusted pro forma net income (loss) to Net
income (loss) attributable to Shake Shack Inc., the most directly
comparable GAAP measure, and the computation of adjusted pro forma
earnings (loss) per fully exchanged and diluted share are set forth
below.
Thirteen Weeks
Ended
(in thousands, except per share
amounts)
March 27 2024
March 29
2023
Numerator:
Net income (loss) attributable to Shake
Shack Inc
$
2,040
$
(1,534
)
Adjustments:
Reallocation of Net income (loss)
attributable to non-controlling interests from the assumed exchange
of LLC Interests(1)
174
(88
)
Legal settlements
—
1,004
Restatement costs(2)
1,391
—
CEO transition costs
479
—
Other(3)
1,183
628
Tax impact of above adjustments(4)
356
(300
)
Adjusted pro forma net income
(loss)
$
5,623
$
(290
)
Denominator:
Weighted-average shares of Class A common
stock outstanding—diluted
41,259
39,332
Adjustments:
Assumed exchange of LLC Interests for
shares of Class A common stock(1)
2,830
2,852
Adjusted pro forma fully exchanged
weighted-average shares of Class A common stock
outstanding—diluted
44,089
42,184
Adjusted pro forma earnings (loss) per
fully exchanged share—diluted
$
0.13
$
(0.01
)
Thirteen Weeks Ended
March 27 2024
March 29 2023
Earnings (loss) per share of Class A
common stock—diluted
$
0.05
$
(0.04
)
Non-GAAP adjustments(5)
0.08
0.03
Adjusted pro forma earnings (loss) per
fully exchanged share—diluted
$
0.13
$
(0.01
)
(1)
Assumes the exchange of all outstanding
LLC Interests for shares of Class A common stock, resulting in the
elimination of the non-controlling interest and recognition of the
net income (loss) attributable to non-controlling interests.
(2)
Expenses incurred related to the
restatement of prior periods in the 2023 Form 10-K.
(3)
Expenses incurred for professional fees
related to non-recurring matters.
(4)
Represents the tax effect of the
aforementioned adjustments and pro forma adjustments to reflect
corporate income taxes at assumed effective tax rates of 2.8% and
133.1% for the thirteen weeks ended March 27, 2024 and
March 29, 2023, respectively. Amounts include provisions for
U.S. federal income taxes, certain LLC entity-level taxes and
foreign withholding taxes, assuming the highest statutory rates
apportioned to each applicable state, local and foreign
jurisdiction.
(5)
Represents the per share impact of
non-GAAP adjustments for each period. Refer to the reconciliation
of Adjusted pro forma net income (loss) above for additional
information.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501141578/en/
Media: Meg Davis, Shake Shack mcastranova@shakeshack.com
Investor Relations: Melissa Calandruccio, ICR Michelle
Michalski, ICR (844) SHACK-04 (844-742-2504)
investor@shakeshack.com
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