Shake Shack Announces Second Quarter 2024 Financial Results
Shake Shack (NYSE: SHAK) reported strong financial results for Q2 2024, with total revenue up 16.4% to $316.5 million. The company saw system-wide sales increase by 13.5% to $483.7 million, and same-Shack sales grow by 4.0% compared to 2023. Operating income more than doubled to $10.8 million, while net income rose to $10.4 million. Adjusted EBITDA showed significant growth, increasing 27.4% to $47.2 million. The company's expansion continued with the opening of twelve new Company-operated Shacks, including three drive-thrus, and eleven new licensed Shacks. Earnings per diluted share reached $0.23, with adjusted pro forma earnings of $0.27 per fully exchanged and diluted share.
Shake Shack (NYSE: SHAK) ha riportato risultati finanziari solidi per il secondo trimestre del 2024, con un aumento del 16,4% del fatturato totale a 316,5 milioni di dollari. L'azienda ha registrato un incremento delle vendite a livello di sistema del 13,5% a 483,7 milioni di dollari e una crescita delle vendite negli stessi Shack del 4,0% rispetto al 2023. L'utile operativo è più che raddoppiato a 10,8 milioni di dollari, mentre l'utile netto è salito a 10,4 milioni di dollari. L'EBITDA rettificato ha mostrato una crescita significativa, aumentando del 27,4% a 47,2 milioni di dollari. L'espansione dell'azienda è continuata con l'apertura di dodici nuovi Shack operati dalla compagnia, tra cui tre drive-thru, e undici nuovi Shack in licenza. Gli utili per azione diluiti hanno raggiunto $0,23, con utili pro forma rettificati di $0,27 per azione completamente scambiata e diluita.
Shake Shack (NYSE: SHAK) informó resultados financieros sólidos para el segundo trimestre de 2024, con un aumento del 16,4% en los ingresos totales a 316,5 millones de dólares. La compañía vio un aumento del 13,5% en las ventas a nivel de sistema, alcanzando 483,7 millones de dólares, y un crecimiento de ventas en los mismos Shack del 4,0% en comparación con 2023. El ingreso operativo se más que duplicó, alcanzando 10,8 millones de dólares, mientras que el ingreso neto aumentó a 10,4 millones de dólares. El EBITDA ajustado mostró un crecimiento significativo, aumentando un 27,4% hasta 47,2 millones de dólares. La expansión de la compañía continuó con la apertura de doce nuevos Shack operados por la compañía, incluyendo tres drive-thrus y once nuevos Shack con licencia. Las ganancias por acción diluida alcanzaron $0,23, con ganancias pro forma ajustadas de $0,27 por acción completamente intercambiada y diluida.
쉐이크샥(Shake Shack, NYSE: SHAK)이 2024년 2분기 강력한 재무 실적을 보고했습니다. 총 매출이 3억 1,650만 달러로 16.4% 증가했습니다. 회사는 시스템 전체 판매가 4억 8,370만 달러로 13.5% 증가했으며, 동일 매장 판매가 4.0% 성장했다고 보고했습니다. 운영 소득은 1080만 달러로 두 배 이상 증가했으며, 순이익은 1,040만 달러로 증가했습니다. 조정된 EBITDA는 큰 성장을 보였으며, 27.4% 증가하여 4,720만 달러에 도달했습니다. 회사의 확장은 세 개의 드라이브 스루를 포함한 12개의 새로운 직영 샥과 11개의 신규 라이센스 샥을 열며 계속되었습니다. 희석 주당 순이익은 $0.23에 달했으며, 조정된 준비금 이익은 완전히 교환 및 희석된 주당 $0.27입니다.
Shake Shack (NYSE: SHAK) a annoncé de solides résultats financiers pour le deuxième trimestre 2024, avec une augmentation de 16,4 % des revenus totaux à 316,5 millions de dollars. La société a constaté une augmentation des ventes à l'échelle du système de 13,5 % à 483,7 millions de dollars, et une croissance des ventes dans les mêmes Shack de 4,0 % par rapport à 2023. Le résultat d'exploitation a plus que doublé, atteignant 10,8 millions de dollars, tandis que le résultat net a atteint 10,4 millions de dollars. L'EBITDA ajusté a montré une croissance significative, augmentant de 27,4 % à 47,2 millions de dollars. L'expansion de l'entreprise s'est poursuivie avec l'ouverture de douze nouveaux Shack opérés par la société, dont trois drive-thrus, et onze nouveaux Shack sous licence. Les bénéfices par action diluée ont atteint 0,23 $, avec des bénéfices pro forma ajustés de 0,27 $ par action entièrement échangée et diluée.
Shake Shack (NYSE: SHAK) hat im zweiten Quartal 2024 starke finanzielle Ergebnisse erzielt, mit einem Anstieg des Gesamtumsatzes um 16,4% auf 316,5 Millionen Dollar. Das Unternehmen verzeichnete einen Anstieg des systemweiten Verkaufs um 13,5% auf 483,7 Millionen Dollar und einen Anstieg der Same-Shack-Verkäufe um 4,0% im Vergleich zu 2023. Das Betriebsergebnis hat sich mehr als verdoppelt und beträgt 10,8 Millionen Dollar, während der Nettogewinn auf 10,4 Millionen Dollar gestiegen ist. Das bereinigte EBITDA zeigte ein signifikantes Wachstum, stieg um 27,4% auf 47,2 Millionen Dollar. Die Expansion des Unternehmens setzte sich fort mit der Eröffnung von zwölf neuen firmeneigenen Shacks, darunter drei Drive-Thrus, und elf neuen lizenzierten Shacks. Der Gewinn je verwässerter Aktie lag bei $0,23, mit bereinigten Pro-forma-Gewinnen von $0,27 pro vollständig umgetauschter und verwässerter Aktie.
- Total revenue increased 16.4% to $316.5 million
- System-wide sales grew 13.5% to $483.7 million
- Same-Shack sales up 4.0% versus 2023
- Operating income more than doubled to $10.8 million
- Net income increased to $10.4 million from $7.2 million in 2023
- Adjusted EBITDA grew 27.4% to $47.2 million
- Opened twelve new Company-operated Shacks and eleven new licensed Shacks
- None.
Insights
Shake Shack's Q2 2024 results demonstrate robust growth and operational efficiency. The 16.4% year-over-year revenue increase to
Particularly noteworthy is the substantial improvement in profitability. Operating income more than doubled from
The
However, investors should note the discrepancy between net income (
Overall, these results suggest Shake Shack is successfully navigating inflationary pressures and consumer spending shifts, positioning itself for continued growth in the competitive fast-casual dining sector.
Shake Shack's Q2 2024 performance offers valuable insights into consumer behavior and market trends in the fast-casual dining sector. The 13.5% increase in system-wide sales to
The 4.0% same-Shack sales growth is particularly telling. In a period where many consumers are tightening their belts due to economic pressures, this growth suggests Shake Shack is successfully positioning itself as an affordable luxury. The company seems to be striking a balance between value perception and premium positioning, a important factor in the current economic climate.
The expansion of 23 new Shacks, including three drive-thrus, demonstrates the company's adaptability to changing consumer preferences. The focus on drive-thru locations is a strategic move, catering to the increased demand for convenience and contactless options post-pandemic.
The growth in licensing revenue (
However, it's important to note that while these results are strong, they come against a backdrop of ongoing inflationary pressures and potential shifts in consumer spending. Shake Shack's ability to maintain this growth trajectory will depend on its continued innovation in menu offerings, digital capabilities and operational efficiencies to stay ahead in a highly competitive market.
-
Total revenue of
$316.5 million 16.4% versus 2023, including$305.5 million $11.0 million -
System-wide sales of
$483.7 million 13.5% versus 2023. -
Same-Shack sales up
4.0% versus 2023. -
Operating income of
$10.8 million $4.7 million -
Restaurant-level profit(1) of
$67.1 million 22.0% of Shack sales.
-
Restaurant-level profit(1) of
-
Net income of
$10.4 million $7.2 million -
Adjusted EBITDA(1) of
$47.2 million 27.4% versus 2023.
-
Adjusted EBITDA(1) of
-
Net income attributable to Shake Shack Inc. of
$9.7 million $0.23 -
Adjusted pro forma net income(1) of
$12.1 million $0.27
-
Adjusted pro forma net income(1) of
- Opened twelve new Company-operated Shacks, including three drive-thrus. Opened eleven new licensed Shacks.
Shake Shack will host a conference call at 8:00 a.m. ET. Hosting the call will be Robert Lynch, 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 08, 2024 by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671; the passcode is 13746900.
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 540 locations system-wide, including over 350 in 33 U.S. States and the
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) |
|||||||
|
June 26
|
December 27
|
|||||
ASSETS |
|
|
|||||
Current assets: |
|
|
|||||
Cash and cash equivalents |
$ |
301,838 |
|
$ |
224,653 |
|
|
Marketable securities |
|
2,574 |
|
|
68,561 |
|
|
Accounts receivable, net |
|
15,914 |
|
|
16,847 |
|
|
Inventories |
|
5,194 |
|
|
5,404 |
|
|
Prepaid expenses and other current assets |
|
20,160 |
|
|
18,967 |
|
|
Total current assets |
|
345,680 |
|
|
334,432 |
|
|
Property and equipment, net of accumulated depreciation of |
|
545,225 |
|
|
530,995 |
|
|
Operating lease assets |
|
419,527 |
|
|
398,296 |
|
|
Deferred income taxes, net |
|
338,538 |
|
|
326,208 |
|
|
Other assets |
|
12,788 |
|
|
15,926 |
|
|
TOTAL ASSETS |
$ |
1,661,758 |
|
$ |
1,605,857 |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|||||
Current liabilities: |
|
|
|||||
Accounts payable |
$ |
18,576 |
|
$ |
22,273 |
|
|
Accrued expenses |
|
56,376 |
|
|
54,742 |
|
|
Accrued wages and related liabilities |
|
22,584 |
|
|
20,945 |
|
|
Operating lease liabilities, current |
|
53,140 |
|
|
49,004 |
|
|
Other current liabilities |
|
17,412 |
|
|
17,103 |
|
|
Total current liabilities |
|
168,088 |
|
|
164,067 |
|
|
Long-term debt |
|
246,160 |
|
|
245,636 |
|
|
Long-term operating lease liabilities |
|
487,600 |
|
|
464,533 |
|
|
Liabilities under tax receivable agreement, net of current portion |
|
246,878 |
|
|
235,613 |
|
|
Other long-term liabilities |
|
26,667 |
|
|
26,638 |
|
|
Total liabilities |
|
1,175,393 |
|
|
1,136,487 |
|
|
Commitments and contingencies |
|
|
|||||
Stockholders' equity: |
|
|
|||||
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of June 26, 2024 and December 27, 2023. |
|
— |
|
|
— |
|
|
Class A common stock, 39,474,315 shares issued and outstanding as of June 26, 2024 and December 27, 2023, respectively. |
|
40 |
|
|
39 |
|
|
Class B common stock, 2,834,513 shares issued and outstanding as of June 26, 2024 and December 27, 2023, respectively. |
|
2 |
|
|
3 |
|
|
Additional paid-in capital |
|
433,877 |
|
|
426,601 |
|
|
Retained earnings |
|
28,485 |
|
|
16,777 |
|
|
Accumulated other comprehensive loss |
|
(4 |
) |
|
(3 |
) |
|
Total stockholders' equity attributable to Shake Shack Inc. |
|
462,400 |
|
|
443,417 |
|
|
Non-controlling interests |
|
23,965 |
|
|
25,953 |
|
|
Total equity |
|
486,365 |
|
|
469,370 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
1,661,758 |
|
$ |
1,605,857 |
|
|
SHAKE SHACK INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in thousands, except per share amounts) |
|||||||||||||||||||||||||||
|
Thirteen Weeks Ended |
Twenty-Six Weeks Ended |
|||||||||||||||||||||||||
|
June 26
|
June 28
|
June 26
|
June 28
|
|||||||||||||||||||||||
Shack sales |
$ |
305,480 |
|
96.5 |
% |
$ |
261,810 |
|
96.3 |
% |
$ |
586,032 |
|
96.5 |
% |
$ |
506,064 |
|
96.4 |
% |
|||||||
Licensing revenue |
|
11,016 |
|
3.5 |
% |
|
9,995 |
|
3.7 |
% |
|
20,968 |
|
3.5 |
% |
|
19,019 |
|
3.6 |
% |
|||||||
TOTAL REVENUE |
|
316,496 |
|
100.0 |
% |
|
271,805 |
|
100.0 |
% |
|
607,000 |
|
100.0 |
% |
|
525,083 |
|
100.0 |
% |
|||||||
Shack-level operating expenses(1): |
|
|
|
|
|
|
|
|
|||||||||||||||||||
Food and paper costs |
|
85,053 |
|
27.8 |
% |
|
75,800 |
|
29.0 |
% |
|
165,306 |
|
28.2 |
% |
|
147,572 |
|
29.2 |
% |
|||||||
Labor and related expenses |
|
86,614 |
|
28.4 |
% |
|
75,158 |
|
28.7 |
% |
|
168,123 |
|
28.7 |
% |
|
149,422 |
|
29.5 |
% |
|||||||
Other operating expenses |
|
43,953 |
|
14.4 |
% |
|
36,109 |
|
13.8 |
% |
|
85,809 |
|
14.6 |
% |
|
71,045 |
|
14.0 |
% |
|||||||
Occupancy and related expenses |
|
23,226 |
|
7.6 |
% |
|
19,801 |
|
7.6 |
% |
|
45,414 |
|
7.7 |
% |
|
38,384 |
|
7.6 |
% |
|||||||
General and administrative expenses |
|
36,313 |
|
11.5 |
% |
|
31,476 |
|
11.6 |
% |
|
72,257 |
|
11.9 |
% |
|
62,787 |
|
12.0 |
% |
|||||||
Depreciation and amortization expense |
|
25,496 |
|
8.1 |
% |
|
22,252 |
|
8.2 |
% |
|
50,937 |
|
8.4 |
% |
|
43,574 |
|
8.3 |
% |
|||||||
Pre-opening costs |
|
4,014 |
|
1.3 |
% |
|
5,577 |
|
2.1 |
% |
|
6,767 |
|
1.1 |
% |
|
9,134 |
|
1.7 |
% |
|||||||
Impairment and loss on disposal of assets |
|
1,045 |
|
0.3 |
% |
|
884 |
|
0.3 |
% |
|
1,571 |
|
0.3 |
% |
|
1,606 |
|
0.3 |
% |
|||||||
TOTAL EXPENSES |
|
305,714 |
|
96.6 |
% |
|
267,057 |
|
98.3 |
% |
|
596,184 |
|
98.2 |
% |
|
523,524 |
|
99.7 |
% |
|||||||
INCOME FROM OPERATIONS |
|
10,782 |
|
3.4 |
% |
|
4,748 |
|
1.7 |
% |
|
10,816 |
|
1.8 |
% |
|
1,559 |
|
0.3 |
% |
|||||||
Other income, net |
|
3,300 |
|
1.0 |
% |
|
3,227 |
|
1.2 |
% |
|
6,506 |
|
1.1 |
% |
|
6,064 |
|
1.2 |
% |
|||||||
Interest expense |
|
(527 |
) |
(0.2 |
)% |
|
(405 |
) |
(0.1 |
)% |
|
(1,035 |
) |
(0.2 |
)% |
|
(808 |
) |
(0.2 |
)% |
|||||||
INCOME BEFORE INCOME TAXES |
|
13,555 |
|
4.3 |
% |
|
7,570 |
|
2.8 |
% |
|
16,287 |
|
2.7 |
% |
|
6,815 |
|
1.3 |
% |
|||||||
Income tax expense |
|
3,173 |
|
1.0 |
% |
|
347 |
|
0.1 |
% |
|
3,691 |
|
0.6 |
% |
|
1,214 |
|
0.2 |
% |
|||||||
NET INCOME |
|
10,382 |
|
3.3 |
% |
|
7,223 |
|
2.7 |
% |
|
12,596 |
|
2.1 |
% |
|
5,601 |
|
1.1 |
% |
|||||||
Less: Net income attributable to non-controlling interests |
|
714 |
|
0.2 |
% |
|
275 |
|
0.1 |
% |
|
888 |
|
0.1 |
% |
|
187 |
|
— |
% |
|||||||
NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC. |
$ |
9,668 |
|
3.1 |
% |
$ |
6,948 |
|
2.6 |
% |
$ |
11,708 |
|
1.9 |
% |
$ |
5,414 |
|
1.0 |
% |
|||||||
Earnings per share of Class A common stock: |
|
|
|
|
|
|
|
|
|||||||||||||||||||
Basic |
$ |
0.24 |
|
|
$ |
0.18 |
|
|
$ |
0.30 |
|
|
$ |
0.14 |
|
|
|||||||||||
Diluted |
$ |
0.23 |
|
|
$ |
0.16 |
|
|
$ |
0.28 |
|
|
$ |
0.13 |
|
|
|||||||||||
Weighted-average shares of Class A common stock outstanding: |
|
|
|
|
|
|
|
|
|||||||||||||||||||
Basic |
|
39,750 |
|
|
|
39,416 |
|
|
|
39,632 |
|
|
|
39,374 |
|
|
|||||||||||
Diluted |
|
41,480 |
|
|
|
43,886 |
|
|
|
41,369 |
|
|
|
43,837 |
|
|
|||||||||||
__________________
| (1) | As a percentage of Shack sales. |
SHAKE SHACK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) |
|||||||
|
Twenty-Six Weeks Ended |
||||||
|
June 26
|
June 28
|
|||||
OPERATING ACTIVITIES |
|
|
|||||
Net income (including amounts attributable to non-controlling interests) |
$ |
12,596 |
|
$ |
5,601 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|||||
Depreciation and amortization expense |
|
50,937 |
|
|
43,574 |
|
|
Amortization of debt issuance costs |
|
524 |
|
|
524 |
|
|
Amortization of cloud computing assets |
|
1,048 |
|
|
880 |
|
|
Non-cash operating lease cost |
|
37,655 |
|
|
32,598 |
|
|
Equity-based compensation |
|
7,381 |
|
|
7,734 |
|
|
Deferred income taxes |
|
1,311 |
|
|
2,733 |
|
|
Non-cash interest |
|
(128 |
) |
|
99 |
|
|
Gain on sale of equity securities |
|
— |
|
|
(81 |
) |
|
Net amortization of discount on held-to-maturity securities |
|
(434 |
) |
|
(89 |
) |
|
Impairment and loss on disposal of assets |
|
1,571 |
|
|
1,606 |
|
|
Changes in operating assets and liabilities: |
|
|
|||||
Accounts receivable |
|
933 |
|
|
(455 |
) |
|
Inventories |
|
210 |
|
|
(490 |
) |
|
Prepaid expenses and other current assets |
|
(864 |
) |
|
(519 |
) |
|
Other assets |
|
(1,219 |
) |
|
(3,217 |
) |
|
Accounts payable |
|
(1,084 |
) |
|
(3,939 |
) |
|
Accrued expenses |
|
4,409 |
|
|
39 |
|
|
Accrued wages and related liabilities |
|
1,639 |
|
|
592 |
|
|
Other current liabilities |
|
(732 |
) |
|
(2,081 |
) |
|
Operating lease liabilities |
|
(32,553 |
) |
|
(25,584 |
) |
|
Other long-term liabilities |
|
1,010 |
|
|
2,666 |
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
84,210 |
|
|
62,191 |
|
|
INVESTING ACTIVITIES |
|
|
|||||
Purchases of property and equipment |
|
(65,992 |
) |
|
(74,755 |
) |
|
Purchases of held-to-maturity securities |
|
— |
|
|
(91,448 |
) |
|
Maturities of held-to-maturity marketable securities |
|
66,420 |
|
|
— |
|
|
Purchases of equity securities |
|
— |
|
|
(690 |
) |
|
Sales of equity securities |
|
— |
|
|
81,478 |
|
|
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES |
|
428 |
|
|
(85,415 |
) |
|
FINANCING ACTIVITIES |
|
|
|||||
Payments on principal of finance leases |
|
(1,918 |
) |
|
(1,504 |
) |
|
Distributions paid to non-controlling interest holders |
|
(145 |
) |
|
(52 |
) |
|
Net proceeds from stock option exercises |
|
552 |
|
|
630 |
|
|
Employee withholding taxes related to net settled equity awards |
|
(5,941 |
) |
|
(2,670 |
) |
|
NET CASH USED IN FINANCING ACTIVITIES |
|
(7,452 |
) |
|
(3,596 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(1 |
) |
|
(4 |
) |
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
77,185 |
|
|
(26,824 |
) |
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
224,653 |
|
|
230,521 |
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
301,838 |
|
$ |
203,697 |
|
|
SHAKE SHACK INC.
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
To supplement the condensed consolidated financial statements, which are prepared and presented in accordance with
Restaurant-Level Profit
Restaurant-level profit, 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.
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 Loss from Operations, the most directly comparable GAAP financial measure, is set forth below.
|
Thirteen Weeks Ended |
Twenty-Six Weeks Ended |
|||||||||||||
(dollar amounts in thousands) |
June 26
|
June 28
|
June 26
|
June 28
|
|||||||||||
Income from operations |
$ |
10,782 |
|
$ |
4,748 |
|
$ |
10,816 |
|
$ |
1,559 |
|
|||
Less: |
|
|
|
|
|||||||||||
Licensing revenue |
|
11,016 |
|
|
9,995 |
|
|
20,968 |
|
|
19,019 |
|
|||
Add: |
|
|
|
|
|||||||||||
General and administrative expenses |
|
36,313 |
|
|
31,476 |
|
|
72,257 |
|
|
62,787 |
|
|||
Depreciation and amortization expense |
|
25,496 |
|
|
22,252 |
|
|
50,937 |
|
|
43,574 |
|
|||
Pre-opening costs |
|
4,014 |
|
|
5,577 |
|
|
6,767 |
|
|
9,134 |
|
|||
Impairment and loss on disposal of assets |
|
1,045 |
|
|
884 |
|
|
1,571 |
|
|
1,606 |
|
|||
Adjustment: |
|
|
|
|
|||||||||||
Employee benefit charges(1) |
|
445 |
|
|
— |
|
|
445 |
|
|
— |
|
|||
Restaurant-level profit |
$ |
67,079 |
|
$ |
54,942 |
|
$ |
121,825 |
|
$ |
99,641 |
|
|||
|
|
|
|
|
|||||||||||
Total revenue |
$ |
316,496 |
|
$ |
271,805 |
|
$ |
607,000 |
|
$ |
525,083 |
|
|||
Less: Licensing revenue |
|
11,016 |
|
|
9,995 |
|
|
20,968 |
|
|
19,019 |
|
|||
Shack sales |
$ |
305,480 |
|
$ |
261,810 |
|
$ |
586,032 |
|
$ |
506,064 |
|
|||
|
|
|
|
|
|||||||||||
Restaurant-level profit margin(2) |
|
22.0 |
% |
|
21.0 |
% |
|
20.8 |
% |
|
19.7 |
% |
|||
| (1) |
Expenses related to |
|
| (2) | 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, the most directly comparable GAAP measure, is set forth below.
|
Thirteen Weeks Ended |
Twenty-Six Weeks Ended |
|||||||||||||
(dollar amounts in thousands) |
June 26
|
June 28
|
June 26
|
June 28
|
|||||||||||
Net income |
$ |
10,382 |
|
$ |
7,223 |
|
$ |
12,596 |
|
$ |
5,601 |
|
|||
Depreciation and amortization expense |
|
25,496 |
|
|
22,252 |
|
|
50,937 |
|
|
43,574 |
|
|||
Interest expense, net |
|
395 |
|
|
278 |
|
|
368 |
|
|
681 |
|
|||
Income tax expense |
|
3,173 |
|
|
347 |
|
|
3,691 |
|
|
1,214 |
|
|||
EBITDA |
$ |
39,446 |
|
$ |
30,100 |
|
$ |
67,592 |
|
$ |
51,070 |
|
|||
|
|
|
|
|
|||||||||||
Equity-based compensation |
|
3,739 |
|
|
3,932 |
|
|
7,381 |
|
|
7,734 |
|
|||
Amortization of cloud-based software implementation costs |
|
530 |
|
|
441 |
|
|
1,048 |
|
|
880 |
|
|||
Impairment and loss on disposal of assets |
|
1,045 |
|
|
884 |
|
|
1,571 |
|
|
1,606 |
|
|||
Restatement costs(1) |
|
208 |
|
|
— |
|
|
1,599 |
|
|
— |
|
|||
CEO transition costs |
|
109 |
|
|
— |
|
|
588 |
|
|
— |
|
|||
Employee benefit charges(2) |
|
445 |
|
|
— |
|
|
445 |
|
|
— |
|
|||
Legal settlements(3) |
|
— |
|
|
— |
|
|
— |
|
|
1,004 |
|
|||
Other(4) |
|
1,687 |
|
|
1,693 |
|
|
2,870 |
|
|
2,321 |
|
|||
Adjusted EBITDA |
$ |
47,209 |
|
$ |
37,050 |
|
$ |
83,094 |
|
$ |
64,615 |
|
|||
|
|
|
|
|
|||||||||||
Adjusted EBITDA margin(5) |
|
14.9 |
% |
|
13.6 |
% |
|
13.7 |
% |
|
12.3 |
% |
|||
| (1) | Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K. |
|
| (2) |
Expenses related to |
|
| (3) | Expenses incurred to establish accruals related to the settlements of legal matters. |
|
| (4) | Expenses incurred for professional fees related to non-recurring matters. |
|
| (5) |
Calculated as a percentage of Total revenue, which was |
SHAKE SHACK INC.
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share
Adjusted pro forma net income represents Net income 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 per fully exchanged and diluted share is calculated by dividing adjusted pro forma net income 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 and adjusted pro forma earnings 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 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 and adjusted pro forma earnings 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 and adjusted pro forma earnings per fully exchanged and diluted share should not be considered alternatives to Net income and earnings 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 attributable to Shake Shack Inc. Adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share should be evaluated in conjunction with GAAP financial results.
A reconciliation of adjusted pro forma net income to Net income attributable to Shake Shack Inc., the most directly comparable GAAP measure, and the computation of adjusted pro forma earnings per fully exchanged and diluted share are set forth below.
|
Thirteen Weeks Ended |
Twenty-Six Weeks Ended |
|||||||||||||
(in thousands, except per share amounts) |
June 26
|
June 28
|
June 26
|
June 28
|
|||||||||||
Numerator: |
|
|
|
|
|||||||||||
Net income attributable to Shake Shack Inc. |
$ |
9,668 |
|
$ |
6,948 |
|
$ |
11,708 |
|
$ |
5,414 |
|
|||
Adjustments: |
|
|
|
|
|||||||||||
Reallocation of Net income attributable to non-controlling interests from the assumed exchange of LLC Interests(1) |
|
714 |
|
|
275 |
|
|
888 |
|
|
187 |
|
|||
Restatement costs(2) |
|
208 |
|
|
— |
|
|
1,599 |
|
|
— |
|
|||
CEO transition costs |
|
109 |
|
|
— |
|
|
588 |
|
|
— |
|
|||
Employee benefit charges(3) |
|
445 |
|
|
— |
|
|
445 |
|
|
— |
|
|||
Legal settlements |
|
— |
|
|
— |
|
|
— |
|
|
1,004 |
|
|||
Other(4) |
|
1,687 |
|
|
1,693 |
|
|
2,870 |
|
|
2,321 |
|
|||
Tax impact of above adjustments(5) |
|
(685 |
) |
|
(1,036 |
) |
|
(329 |
) |
|
(1,336 |
) |
|||
Adjusted pro forma net income |
$ |
12,146 |
|
$ |
7,880 |
|
$ |
17,769 |
|
$ |
7,590 |
|
|||
|
|
|
|
|
|||||||||||
Denominator: |
|
|
|
|
|||||||||||
Weighted average shares of Class A common stock outstanding—diluted |
|
41,480 |
|
|
43,886 |
|
|
41,369 |
|
|
43,837 |
|
|||
Adjustments: |
|
|
|
|
|||||||||||
Assumed exchange of LLC Interests for shares of Class A common stock(1) |
|
2,693 |
|
|
— |
|
|
2,761 |
|
|
— |
|
|||
Adjusted pro forma fully exchanged weighted average shares of Class A common stock outstanding—diluted |
|
44,173 |
|
|
43,886 |
|
|
44,130 |
|
|
43,837 |
|
|||
|
|
|
|
|
|||||||||||
Adjusted pro forma earnings per fully exchanged share—diluted |
$ |
0.27 |
|
$ |
0.18 |
|
$ |
0.40 |
|
$ |
0.17 |
|
|||
|
Thirteen Weeks Ended |
Twenty-Six Weeks Ended |
|||||||||
|
June 26
|
June 28
|
June 26
|
June 28
|
|||||||
Earnings per share of Class A common stock—diluted |
$ |
0.23 |
$ |
0.16 |
$ |
0.28 |
$ |
0.13 |
|||
Assumed exchange of LLC Interests for shares of Class A common stock(1) |
|
0.01 |
|
— |
|
0.01 |
|
— |
|||
Non-GAAP adjustments(6) |
|
0.03 |
|
0.02 |
|
0.11 |
|
0.04 |
|||
Adjusted pro forma earnings per fully exchanged share—diluted |
$ |
0.27 |
$ |
0.18 |
$ |
0.40 |
$ |
0.17 |
|||
| (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 attributable to non-controlling interests. |
|
| (2) | Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K. |
|
| (3) |
Expenses related to |
|
| (4) | Expenses incurred for professional fees related to non-recurring matters. |
|
| (5) |
Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of |
|
| (6) | Represents the per share impact of non-GAAP adjustments for each period. Refer to the reconciliation of Adjusted pro forma net income above, for additional information. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240731238082/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
Source: Shake Shack Inc.
FAQ
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