Shake Shack Announces First Quarter 2025 Financial Results

5/1/25 7:00:00 AM ET

Restaurants

Consumer Discretionary

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Total revenue of $320.9 million, up 10.5% versus 2024, including $309.8 million of Shack sales and $11.1 million of Licensing revenue.
System-wide sales of $489.4 million, up 10.4% versus 2024.
Same-Shack sales up 0.2% versus 2024.
Operating income of $2.8 million versus operating income of $0.0 million in 2024.
- Restaurant-level profit⁽¹⁾ of $64.2 million, or 20.7% of Shack sales.
Net income of $4.5 million versus net income of $2.2 million in 2024.
- Adjusted EBITDA⁽¹⁾ of $40.7 million, up 13.5% versus 2024.
Net income attributable to Shake Shack Inc. of $4.2 million, or earnings of $0.10 per diluted share.
- Adjusted pro forma net income⁽¹⁾ of $6.4 million, or earnings of $0.14 per fully exchanged and diluted share.
Opened four new Company-operated Shacks, including two drive-thrus. Opened seven new licensed Shacks.

Shake Shack Inc. ("Shake Shack" or the "Company") (NYSE:SHAK) has posted its results for the first quarter of 2025 in a Shareholder Letter in the Quarterly Results section of the Company's Investor Relations website, which can be found here: Q1 2025 Shake Shack Shareholder Letter.

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 May 8, 2025 by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671; the passcode is 13752433.

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 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 585 locations system-wide, including over 375 in 34 U.S. States and the District of Columbia, and over 210 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, 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, 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 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, Impairments, loss on disposal of assets, and Shack closures, 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 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 26 2025			December 25 2024
ASSETS
Current assets:
	Cash and cash equivalents	$	312,921		$	320,714
	Accounts receivable, net		18,284			19,687
	Inventories		5,312			6,014
	Prepaid expenses and other current assets		28,086			21,801
	Total current assets		364,603			368,216
Property and equipment, net of accumulated depreciation of $481,873 and $457,186, respectively			562,286			551,600
Operating lease assets			442,678			424,611
Deferred income taxes, net			345,696			341,586
Other assets			12,201			10,958
TOTAL ASSETS		$	1,727,464		$	1,696,971
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable	$	20,678		$	23,609
	Accrued expenses		70,864			63,005
	Accrued wages and related liabilities		20,548			25,422
	Operating lease liabilities, current		57,538			55,739
	Other current liabilities		21,004			19,538
	Total current liabilities		190,632			187,313
Long-term debt			246,945			246,683
Long-term operating lease liabilities			514,637			494,499
Liabilities under tax receivable agreement, net of current portion			247,421			247,017
Other long-term liabilities			30,324			27,833
Total liabilities			1,229,959			1,203,345
Commitments and contingencies
Stockholders' equity:
	Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of March 26, 2025 and December 25, 2024.		—			—
	Class A common stock, $0.001 par value—200,000,000 shares authorized; 40,221,661 and 40,068,068 shares issued and outstanding as of March 26, 2025 and December 25, 2024, respectively.		40			40
	Class B common stock, $0.001 par value—35,000,000 shares authorized; 2,444,789 and 2,455,713 shares issued and outstanding as of March 26, 2025 and December 25, 2024, respectively.		2			2
	Additional paid-in capital		442,047			442,993
	Retained earnings		31,229			26,984
	Accumulated other comprehensive loss		(2	)		(1	)
	Total stockholders' equity attributable to Shake Shack Inc.		473,316			470,018
Non-controlling interests			24,189			23,608
Total equity			497,505			493,626
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,727,464		$	1,696,971

SHAKE SHACK INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in thousands, except per share amounts)

		Thirteen Weeks Ended
		March 26 2025					March 27 2024
Shack sales		$	309,838		96.6	%	$	280,552		96.6	%
Licensing revenue			11,060		3.4	%		9,952		3.4	%
TOTAL REVENUE			320,898		100.0	%		290,504		100.0	%
Shack-level operating expenses⁽¹⁾:
	Food and paper costs		86,037		27.8	%		80,253		28.6	%
	Labor and related expenses		86,668		28.0	%		81,509		29.1	%
	Other operating expenses		48,262		15.6	%		41,856		14.9	%
	Occupancy and related expenses		24,631		7.9	%		22,188		7.9	%
General and administrative expenses			40,640		12.7	%		35,944		12.4	%
Depreciation and amortization expense			26,543		8.3	%		25,441		8.8	%
Pre-opening costs			3,218		1.0	%		2,753		0.9	%
Impairments, loss on disposal of assets, and Shack closures			2,057		0.6	%		526		0.2	%
TOTAL EXPENSES			318,056		99.1	%		290,470		100.0	%
INCOME FROM OPERATIONS			2,842		0.9	%		34		—	%
Other income, net			2,971		0.9	%		3,206		1.1	%
Interest expense			(563	)	(0.2	)%		(508	)	(0.2	)%
INCOME BEFORE INCOME TAXES			5,250		1.6	%		2,732		0.9	%
Income tax expense			737		0.2	%		518		0.2	%
NET INCOME			4,513		1.4	%		2,214		0.8	%
Less: Net income attributable to non-controlling interests			268		0.1	%		174		0.1	%
NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC.		$	4,245		1.3	%	$	2,040		0.7	%
Earnings per share of Class A common stock:
	Basic	$	0.11				$	0.05
	Diluted	$	0.10				$	0.05
Weighted-average shares of Class A common stock outstanding:
	Basic		40,120					39,515
	Diluted		41,864					41,259

_________________
(1)		As a percentage of Shack sales.

SHAKE SHACK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)

			Thirteen Weeks Ended
			March 26 2025			March 27 2024
OPERATING ACTIVITIES
Net income (including amounts attributable to non-controlling interests)			$	4,513		$	2,214
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization expense			26,543			25,441
	Amortization of debt issuance costs			262			262
	Amortization of cloud computing assets			606			518
	Non-cash operating lease cost			20,674			18,490
	Equity-based compensation			4,541			3,642
	Deferred income taxes			(644	)		(131	)
	Non-cash interest			33			(164	)
	Net amortization of discount on held-to-maturity securities			—			(370	)
	Impairments, loss on disposal of assets, and Shack closures			2,057			526
	Changes in operating assets and liabilities:
		Accounts receivable		1,403			2,389
		Inventories		702			331
		Prepaid expenses and other current assets		(3,786	)		(2,757	)
		Other assets		(2,375	)		(650	)
		Accounts payable		(2,225	)		(3,760	)
		Accrued expenses		5,566			2,027
		Accrued wages and related liabilities		(4,874	)		(1,696	)
		Other current liabilities		(409	)		709
		Operating lease liabilities		(23,128	)		(17,213	)
		Other long-term liabilities		1,763			857
NET CASH PROVIDED BY OPERATING ACTIVITIES				31,222			30,665
INVESTING ACTIVITIES
Purchases of property and equipment				(29,352	)		(33,054	)
Maturities of held-to-maturity marketable securities				—			44,361
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES				(29,352	)		11,307
FINANCING ACTIVITIES
Payments on principal of finance leases				(1,290	)		(910	)
Distributions paid to non-controlling interest holders				(21	)		(145	)
Payments under tax receivable agreement				(24	)		—
Net proceeds from stock option exercises				123			474
Employee withholding taxes related to net settled equity awards				(8,450	)		(5,840	)
NET CASH USED IN FINANCING ACTIVITIES				(9,662	)		(6,421	)
Effect of exchange rate changes on cash and cash equivalents				(1	)		(1	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				(7,793	)		35,550
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD				320,714			224,653
CASH AND CASH EQUIVALENTS AT END OF PERIOD			$	312,921		$	260,203

SHAKE SHACK INC.

NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

To supplement the condensed 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 and adjusted pro forma earnings per fully exchanged and diluted share (collectively the "non-GAAP financial measures").

Restaurant-Level Profit

Restaurant-level 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 from operations, the most directly comparable GAAP financial measure, is set forth below.

		Thirteen Weeks Ended
(dollar amounts in thousands)		March 26 2025			March 27 2024
Income from operations		$	2,842		$	34
Less:
	Licensing revenue		11,060			9,952
Add:
	General and administrative expenses		40,640			35,944
	Depreciation and amortization expense		26,543			25,441
	Pre-opening costs		3,218			2,753
	Impairments, loss on disposal of assets, and Shack closures		2,057			526
Restaurant-level profit		$	64,240		$	54,746

Total revenue		$	320,898		$	290,504
Less: Licensing revenue			11,060			9,952
Shack sales		$	309,838		$	280,552

Restaurant-level profit margin⁽¹⁾			20.7	%		19.5	%

(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 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, Impairments, loss on the disposal of assets, and Shack closures, 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
(dollar amounts in thousands)	March 26 2025			March 27 2024
Net income	$	4,513		$	2,214
Depreciation and amortization expense		26,543			25,441
Interest expense, net		523			(27	)
Income tax expense		737			518
EBITDA	$	32,316		$	28,146

Equity-based compensation		4,541			3,642
Amortization of cloud-based software implementation costs		606			518
Impairments, loss on disposal of assets, and Shack closures		2,057			526
Restatement costs⁽¹⁾		254			1,391
Legal settlements⁽²⁾		983			—
CEO transition costs		—			479
Other⁽³⁾		(12	)		1,183
Adjusted EBITDA	$	40,745		$	35,885

Adjusted EBITDA margin⁽⁴⁾		12.7	%		12.4	%

(1)		Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.
(2)		Expenses incurred to establish accruals related to the settlements of legal matters.
(3)		Expenses incurred for professional fees related to non-recurring matters.
(4)		Calculated as a percentage of Total revenue, which was $320.9 million and $290.5 million for the thirteen weeks ended March 26, 2025 and March 27, 2024, respectively.

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
(in thousands, except per share amounts)			March 26 2025			March 27 2024
Numerator:
	Net income attributable to Shake Shack Inc		$	4,245		$	2,040
	Adjustments:
		Reallocation of Net income attributable to non-controlling interests from the assumed exchange of LLC Interests⁽¹⁾		268			174
		Impairment charge and Shack closures⁽²⁾		1,653			—
		Restatement costs⁽³⁾		254			1,391
		Legal settlements⁽⁴⁾		983			—
		CEO transition costs		—			479
		Other⁽⁵⁾		(12	)		1,183
		Tax impact of above adjustments⁽⁶⁾		(993	)		356
Adjusted pro forma net income			$	6,398		$	5,623

Denominator:
	Weighted-average shares of Class A common stock outstanding—diluted			41,864			41,259
	Adjustments:
		Assumed exchange of LLC Interests for shares of Class A common stock⁽¹⁾		2,449			2,830
	Adjusted pro forma fully exchanged weighted-average shares of Class A common stock outstanding—diluted			44,313			44,089

Adjusted pro forma earnings per fully exchanged share—diluted			$	0.14		$	0.13

		Thirteen Weeks Ended
		March 26 2025		March 27 2024
Earnings per share of Class A common stock—diluted		$	0.10	$	0.05
	Non-GAAP adjustments⁽⁷⁾		0.04		0.08
Adjusted pro forma earnings per fully exchanged share—diluted		$	0.14	$	0.13

(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 Shack closures during fiscal 2024.
(3)		Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.
(4)		Expenses incurred to establish accruals related to the settlements of legal matters.
(5)		Expenses incurred for professional fees related to non-recurring matters.
(6)		Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 21.3% and 2.8% for the thirteen weeks ended March 26, 2025 and March 27, 2024, 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.
(7)		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/20250501609006/en/

Media:

Meg Davis, Shake Shack

[email protected]

Investor Relations:

Melissa Calandruccio, ICR

Michelle Michalski, ICR

(844) SHACK-04 (844-742-2504)

[email protected]

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Date	Price Target	Rating	Analyst
4/9/2025	$155.00 → $125.00	Outperform	Oppenheimer
4/1/2025	$127.00	Hold → Buy	Loop Capital
3/26/2025	$95.00	Equal Weight	Wells Fargo
1/8/2025	$154.00	Hold → Buy	Gordon Haskett
1/7/2025	$125.00 → $159.00	Equal Weight → Overweight	Barclays
8/19/2024	$121.00 → $114.00	Overweight → Neutral	Piper Sandler
7/29/2024	$95.00	Overweight	CapitalOne
6/13/2024	$110.00	Buy	Goldman

Shake Shack Announces First Quarter 2025 Financial Results

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