Shake Shack Inc. (“Shake Shack” or the “Company”) (NYSE: SHAK) has posted its results for the second quarter of 2023 in a Shareholder Letter in the Quarterly Results section of the Company's Investor Relations website, which can be found here: Q2 2023 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 August 10, 2023 by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671; the passcode is 13738716.
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) | Shack-level operating 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 480 locations system-wide, including over 310 in 32 U.S. States and the District of Columbia, and about 170 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 domestic Company-operated Shacks and excludes sales from licensed Shacks.
“System-wide sales” is an operating measure and consists of sales from the Company's domestic Company-operated Shacks, domestic licensed Shacks and international 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 domestic and international 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 domestic 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.
"Shack-level operating profit," a non-GAAP measure, also referred to as restaurant 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.
"Shack-level operating profit margin," a non-GAAP measure, also referred to as restaurant 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 and other items that the Company does not believe directly reflect its core operations and may not be indicative of the Company's recurring business operations.
SHAKE SHACK INC.
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June 28
| December 28
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ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 203,697 | $ | 230,521 | |||
Marketable securities | 91,537 | 80,707 | |||||
Accounts receivable, net | 14,332 | 13,877 | |||||
Inventories | 4,674 | 4,184 | |||||
Prepaid expenses and other current assets | 15,278 | 14,699 | |||||
Total current assets | 329,518 | 343,988 | |||||
Property and equipment, net of accumulated depreciation of $331,571 and $290,362, respectively | 500,085 | 467,031 | |||||
Operating lease assets | 385,386 | 367,488 | |||||
Deferred income taxes, net | 302,025 | 300,538 | |||||
Other assets | 15,802 | 15,817 | |||||
TOTAL ASSETS | $ | 1,532,816 | $ | 1,494,862 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 17,005 | $ | 20,407 | |||
Accrued expenses | 50,588 | 47,945 | |||||
Accrued wages and related liabilities | 18,221 | 17,576 | |||||
Operating lease liabilities, current | 46,490 | 42,238 | |||||
Other current liabilities | 17,881 | 19,552 | |||||
Total current liabilities | 150,185 | 147,718 | |||||
Long-term debt | 245,113 | 244,589 | |||||
Long-term operating lease liabilities | 448,580 | 427,227 | |||||
Liabilities under tax receivable agreement, net of current portion | 235,361 | 234,893 | |||||
Other long-term liabilities | 22,218 | 20,687 | |||||
Total liabilities | 1,101,457 | 1,075,114 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of June 28, 2023 and December 28, 2022. | — | — | |||||
Class A common stock, $0.001 par value—200,000,000 shares authorized; 39,449,246 and 39,284,998 shares issued and outstanding as of June 28, 2023 and December 28, 2022, respectively. | 39 | 39 | |||||
Class B common stock, $0.001 par value—35,000,000 shares authorized; 2,844,513 and 2,869,513 shares issued and outstanding as of June 28, 2023 and December 28, 2022, respectively. | 3 | 3 | |||||
Additional paid-in capital | 421,356 | 415,611 | |||||
Accumulated deficit | (15,123 | ) | (20,537 | ) | |||
Accumulated other comprehensive loss | (4 | ) | — | ||||
Total stockholders' equity attributable to Shake Shack Inc. | 406,271 | 395,116 | |||||
Non-controlling interests | 25,088 | 24,632 | |||||
Total equity | 431,359 | 419,748 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,532,816 | $ | 1,494,862 | |||
SHAKE SHACK INC.
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Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||||||||
June 28
| June 29
| June 28
| June 29
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Shack sales | $ | 261,810 | 96.3 | % | $ | 223,054 | 96.7 | % | $ | 506,064 | 96.4 | % | $ | 419,845 | 96.7 | % | |||||||
Licensing revenue | 9,995 | 3.7 | % | 7,698 | 3.3 | % | 19,019 | 3.6 | % | 14,298 | 3.3 | % | |||||||||||
TOTAL REVENUE | 271,805 | 100.0 | % | 230,752 | 100.0 | % | 525,083 | 100.0 | % | 434,143 | 100.0 | % | |||||||||||
Shack-level operating expenses(1): | |||||||||||||||||||||||
Food and paper costs | 75,800 | 29.0 | % | 65,987 | 29.6 | % | 147,572 | 29.2 | % | 125,871 | 30.0 | % | |||||||||||
Labor and related expenses | 75,158 | 28.7 | % | 65,851 | 29.5 | % | 149,422 | 29.5 | % | 126,316 | 30.1 | % | |||||||||||
Other operating expenses(2) | 36,109 | 13.8 | % | 32,151 | 14.4 | % | 71,045 | 14.0 | % | 62,322 | 14.8 | % | |||||||||||
Occupancy and related expenses | 19,801 | 7.6 | % | 16,657 | 7.5 | % | 38,384 | 7.6 | % | 32,933 | 7.8 | % | |||||||||||
General and administrative expenses(2) | 31,476 | 11.6 | % | 29,487 | 12.8 | % | 62,787 | 12.0 | % | 60,873 | 14.0 | % | |||||||||||
Depreciation and amortization expense | 22,252 | 8.2 | % | 18,087 | 7.8 | % | 43,574 | 8.3 | % | 34,942 | 8.0 | % | |||||||||||
Pre-opening costs | 5,577 | 2.1 | % | 2,823 | 1.2 | % | 9,134 | 1.7 | % | 5,535 | 1.3 | % | |||||||||||
Impairment and loss on disposal of assets | 884 | 0.3 | % | 528 | 0.2 | % | 1,606 | 0.3 | % | ||||||||||||||
