Open the filing on EDGARShake Shack Announces Third Quarter 2026 Financial Results
- Total revenue of $423.3 million, up 15.2% versus 2025, including $408.0 million of Shack sales and $15.3 million of Licensing revenue.
- System-wide sales of $644.8 million, up 12.8% versus 2025.
- Same-Shack sales up 2.5% versus 2025.
- Operating income of $21.5 million versus $18.5 million in 2025.
- Restaurant-level profit of $91.7 million, or 22.5% of Shack sales.
- Net income of $17.8 million versus $13.7 million in 2025.
- Adjusted EBITDA of $62.8 million, up 16.0% versus 2025.
- Net income attributable to Shake Shack Inc. of $16.5 million, or earnings of $0.39 per diluted share.
- Adjusted pro forma net income of $17.8 million, or earnings of $0.40 per fully exchanged and diluted share.
- Opened 21 new Company-operated Shacks and 16 new licensed Shacks.
NEW YORK, NY (Business Wire) - November 5, 2026 - Shake Shack Inc. (“Shake Shack” or the “Company”) (NYSE: SHAK) has posted its results for the third quarter of 2026 in a Shareholder Letter in the Quarterly Results section of the Company's Investor Relations website, which can be found here: Q3 2026 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 Michelle Hook, 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 November 12, 2026 by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671; the passcode is 13762370.
The live audio webcast of the conference call will be accessible in the Events & Presentations section on 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, crinkle cut fries, crispy chicken, hand spun milkshakes, house-made lemonades, 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 team member 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 750 locations system-wide, including over 480 in 36 U.S. States and the District of Columbia, and nearly 270 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, opening fees, and termination 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, 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 related to its core operations and may not be indicative of its recurring business operations.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share amounts)
| | September 30 2026 | December 31 2025 |
|---|
| Cash and cash equivalents | $319,004 | $360,123 |
|---|
| Accounts receivable, net | 30,563 | 32,962 |
|---|
| Inventories | 7,562 | 7,182 |
|---|
| Prepaid expenses and other current assets | 40,242 | 30,080 |
|---|
| Total current assets | 397,371 | 430,347 |
|---|
| ASSETS | | |
| Current assets: | | |
| Property and equipment, net of accumulated depreciation of $630,566 and $551,004, respectively. | 695,791 | 625,851 |
| Operating lease assets | 568,563 | 507,253 |
| Deferred income taxes, net | 315,438 | 322,385 |
| Other assets | 8,132 | 10,373 |
| TOTAL ASSETS | $1,985,295 | $1,896,209 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| Current liabilities: | | |
| Accounts payable | $25,085 | $24,747 |
| Accrued expenses | 82,599 | 103,354 |
| Accrued wages and related liabilities | 24,375 | 25,481 |
| Operating lease liabilities, current | 69,850 | 63,553 |
| Other current liabilities | 29,043 | 27,783 |
| Total current liabilities | 230,952 | 244,918 |
| Long-term debt | 248,517 | 247,731 |
| Long-term operating lease liabilities | 639,888 | 575,138 |
| Liabilities under tax receivable agreement, net of current portion | 244,030 | 244,463 |
| Other long-term liabilities | 27,095 | 30,210 |
| Total liabilities | 1,390,482 | 1,342,460 |
| Commitments and contingencies | | |
| Stockholders' equity: | | |
| Preferred stock, no par value - 10,000,000 shares authorized; none issued and outstanding as of September 30, 2026 and December 31, 2025. | - | - |
| Class A common stock, $0.001 par value - 200,000,000 shares authorized; 40,415,423 and 40,254,281 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively. | 40 | 40 |
| Class B common stock, $0.001 par value - 35,000,000 shares authorized; 2,385,789 and 2,434,789 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively. | 2 | 2 |
| Additional paid-in capital | 459,366 | 452,577 |
| Retained earnings | 104,585 | 72,709 |
| Accumulated other comprehensive loss | (6) | (1) |
| Total stockholders' equity attributable to Shake Shack Inc. | 563,987 | 525,327 |
| Non-controlling interests | 30,826 | 28,422 |
| Total equity | 594,813 | 553,749 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $1,985,295 | $1,896,209 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share amounts)
| | Thirteen Weeks Ended | Thirty-Nine Weeks Ended |
|---|
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 |
|---|
| Shack sales | $408,026 | 96.4% | $352,846 | 96.0% | $1,165,510 | 96.5% | $1,005,908 | 96.3% |
| Licensing revenue | 15,247 | 3.6% | 14,565 | 4.0% | 42,118 | 3.5% | 38,867 | 3.7% |
| TOTAL REVENUE | 423,273 | 100.0% | 367,411 | 100.0% | 1,207,628 | 100.0% | 1,044,775 | 100.0% |
| Shack-level operating expenses: | | | | | | | | |
| Food and paper costs | 115,276 | 28.3% | 103,461 | 29.3% | 331,575 | 28.4% | 286,119 | 28.4% |
| Labor and related expenses | 103,823 | 25.4% | 88,033 | 24.9% | 297,766 | 25.5% | 262,759 | 26.1% |
| Other operating expenses | 65,828 | 16.1% | 53,779 | 15.2% | 186,458 | 16.0% | 152,809 | 15.2% |
| Occupancy and related expenses | 31,366 | 7.7% | 26,995 | 7.7% | 90,171 | 7.7% | 77,219 | 7.7% |
| General and administrative expenses | 44,989 | 10.6% | 44,381 | 12.1% | 146,918 | 12.2% | 125,692 | 12.0% |
| Depreciation and amortization expense | 32,930 | 7.8% | 27,079 | 7.4% | 92,767 | 7.7% | 80,167 | 7.7% |
| Pre-opening costs | 6,978 | 1.6% | 4,625 | 1.3% | 20,486 | 1.7% | 12,798 | 1.2% |
| Impairments, loss on disposal of assets, and Shack closures | 601 | 0.1% | 510 | 0.1% | 1,893 | 0.2% | 3,448 | 0.3% |
| TOTAL EXPENSES | 401,791 | 94.9% | 348,863 | 95.0% | 1,168,034 | 96.7% | 1,001,011 | 95.8% |
| INCOME FROM OPERATIONS | 21,482 | 5.1% | 18,548 | 5.0% | 39,594 | 3.3% | 43,764 | 4.2% |
| Other income, net | 2,459 | 0.6% | 3,103 | 0.8% | 7,804 | 0.6% | 8,924 | 0.9% |
| Interest expense | (567) | (0.1)% | (504) | (0.1)% | (1,668) | (0.1)% | (1,615) | (0.2)% |
| INCOME BEFORE INCOME TAXES | 23,374 | 5.5% | 21,147 | 5.8% | 45,730 | 3.8% | 51,073 | 4.9% |
| Income tax expense | 5,607 | 1.3% | 7,436 | 2.0% | 11,375 | 0.9% | 14,366 | 1.4% |
| NET INCOME | 17,767 | 4.2% | 13,711 | 3.7% | 34,355 | 2.8% | 36,707 | 3.5% |
| Less: Net income attributable to non-controlling interests | 1,281 | 0.3% | 1,210 | 0.3% | 2,479 | 0.2% | 2,813 | 0.3% |
| NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC. | $16,486 | 3.9% | $12,501 | 3.4% | $31,876 | 2.6% | $33,894 | 3.2% |
| Earnings per share of Class A common stock: | | | | | | | | |
| Basic | $0.41 | | $0.31 | | $0.79 | | $0.84 | |
| Diluted | $0.39 | | $0.30 | | $0.76 | | $0.81 | |
| Weighted-average shares of Class A common stock outstanding: | | | | | | | | |
| Basic | 40,399 | | 40,250 | | 40,349 | | 40,199 | |
| Diluted | 41,910 | | 41,874 | | 41,885 | | 41,852 | |
(1)As a percentage of Shack sales.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
| | | Thirty-Nine Weeks Ended |
|---|
| | | September 30 2026 | September 24 2025 |
|---|
| OPERATING ACTIVITIES | | |
| Net income (including amounts attributable to non-controlling interests) | $34,355 | $36,707 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Depreciation and amortization expense | 92,767 | 80,167 |
| Amortization of debt issuance costs | 786 | 786 |
| Amortization of cloud computing assets | 1,334 | 1,676 |
| Non-cash operating lease cost | 77,313 | 64,489 |
| Equity-based compensation | 14,077 | 14,173 |
| Deferred income taxes | 7,474 | 9,238 |
| Non-cash interest | 41 | 31 |
| Impairments, loss on disposal of assets, and Shack closures | 1,893 | 3,448 |
| Changes in operating assets and liabilities: | | |
| | Accounts receivable | 2,399 | (925) |
| | Inventories | (380) | (297) |
| | Prepaid expenses and other current assets | (6,980) | (4,134) |
| | Other assets | (2,644) | (4,634) |
| | Accounts payable | 973 | (610) |
| | Accrued expenses | (19,056) | 22,078 |
| | Accrued wages and related liabilities | (1,106) | 524 |
| | Other current liabilities | (788) | (1,377) |
| | Operating lease liabilities | (67,379) | (65,713) |
| | Other long-term liabilities | 953 | 3,592 |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 136,032 | 159,219 |
| INVESTING ACTIVITIES | | |
| Purchases of property and equipment | (162,405) | (106,697) |
| NET CASH USED IN INVESTING ACTIVITIES | (162,405) | (106,697) |
| FINANCING ACTIVITIES | | |
| Payments on principal of finance leases | (4,999) | (4,013) |
| Deferred financing costs | - | (10) |
| Distributions paid to non-controlling interest holders | (2,931) | (1,758) |
| Payments under tax receivable agreement, including interest | (977) | (37) |
| Net proceeds from stock option exercises | 69 | 123 |
| Employee withholding taxes related to net settled equity awards | (5,903) | (9,784) |
| NET CASH USED IN FINANCING ACTIVITIES | (14,741) | (15,479) |
| Effect of exchange rate changes on cash and cash equivalents | (5) | - |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (41,119) | 37,043 |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 360,123 | 320,714 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $319,004 | $357,757 |
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 | Thirty-Nine Weeks Ended |
|---|
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 |
| Income from operations | $21,482 | $18,548 | $39,594 | $43,764 |
| Less: | | | | |
| Licensing revenue | 15,247 | 14,565 | 42,118 | 38,867 |
| Add: | | | | |
| General and administrative expenses | 44,989 | 44,381 | 146,918 | 125,692 |
| Depreciation and amortization expense | 32,930 | 27,079 | 92,767 | 80,167 |
| Pre-opening costs | 6,978 | 4,625 | 20,486 | 12,798 |
| Impairments, loss on disposal of assets, and Shack closures | 601 | 510 | 1,893 | 3,448 |
| Restaurant-level profit | $91,733 | $80,578 | $259,540 | $227,002 |
| Total revenue | $423,273 | $367,411 | $1,207,628 | $1,044,775 |
| Less: Licensing revenue | 15,247 | 14,565 | 42,118 | 38,867 |
| Shack sales | $408,026 | $352,846 | $1,165,510 | $1,005,908 |
| Restaurant-level profit margin | 22.5% | 22.8% | 22.3% | 22.6% |
(1)As a percentage of Shack sales.
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 and Depreciation and amortization expense. Adjusted EBITDA, a non-GAAP measure, is defined as EBITDA 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 | Thirty-Nine Weeks Ended |
|---|
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 |
| Net income | $17,767 | | $13,711 | | $34,355 | | $36,707 | |
| Depreciation and amortization expense | 32,930 | | 27,079 | | 92,767 | | 80,167 | |
| Interest expense, net | 525 | | 472 | | 1,509 | | 1,495 | |
| Income tax expense | 5,607 | | 7,436 | | 11,375 | | 14,366 | |
| EBITDA | $56,829 | | $48,698 | | $140,006 | | $132,735 | |
| Equity-based compensation | 4,995 | | 4,423 | | 14,077 | | 14,173 | |
| Amortization of cloud-based software implementation costs | 291 | | 510 | | 1,334 | | 1,676 | |
| Impairments, loss on disposal of assets, and Shack closures | 601 | | 510 | | 1,893 | | 3,448 | |
| Executive transition costs | 31 | | - | | 2,282 | | 414 | |
| Legal settlements | - | | - | | 848 | | 983 | |
| Restatement costs | - | | - | | - | | 354 | |
| Other | 47 | | - | | 520 | | 3 | |
| Adjusted EBITDA | $62,794 | | $54,141 | | $160,960 | | $153,786 | |
| Adjusted EBITDA margin | | 14.8% | | 14.7% | | 13.3% | | 14.7% |
(1)Expenses incurred in connection with the termination, search, and hiring of certain executive positions.
(2)Expenses incurred to establish accruals related to the settlements of legal matters.
(3)Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.
(4)Amounts related to the conflict in the Middle East and expenses incurred for professional fees related to non-recurring matters.
(5)Calculated as a percentage of Total revenue, which was $423.3 million and $1,207.6 million for the thirteen and thirty-nine weeks ended September 30, 2026, respectively, and $367.4 million and $1,044.8 million for the thirteen and thirty-nine weeks ended September 24, 2025, respectively.
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 | Thirty-Nine Weeks Ended |
|---|
| (in thousands, except per share amounts) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 |
| Numerator: | | | | |
| Net income attributable to Shake Shack Inc. | $16,486 | $12,501 | $31,876 | $33,894 |
| Adjustments: | | | | |
| | Reallocation of Net income attributable to non-controlling interests from the assumed exchange of LLC Interests | 1,281 | 1,210 | 2,479 | 2,813 |
| | Impairment charge and Shack closures | 32 | (44) | 67 | 1,904 |
| | Executive transition costs | 31 | - | 2,282 | 414 |
| | Legal settlements | - | - | 848 | 983 |
| | Restatement costs | - | - | - | 354 |
| | Other | 47 | - | 520 | 3 |
| | Tax impact of above adjustments | (123) | 2,187 | (1,325) | 1,363 |
| Adjusted pro forma net income | $17,754 | $15,854 | $36,747 | $41,728 |
| Denominator: | | | | |
| Weighted average shares of Class A common stock outstanding - diluted | 41,910 | 41,874 | 41,885 | 41,852 |
| Adjustments: | | | | |
| | Assumed exchange of weighted average LLC Interests for shares of Class A common stock | 2,400 | 2,437 | 2,420 | 2,443 |
| Adjusted pro forma fully exchanged weighted average shares of Class A common stock outstanding - diluted | 44,310 | 44,311 | 44,305 | 44,295 |
| Adjusted pro forma earnings per fully exchanged share - diluted | $0.40 | $0.36 | $0.83 | $0.94 |
| | Thirteen Weeks Ended | Thirty-Nine Weeks Ended |
|---|
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 |
|---|
| Earnings per share of Class A common stock - diluted | $0.39 | $0.30 | $0.76 | $0.81 |
| Assumed exchange of weighted average LLC Interests for shares of Class A common stock | 0.01 | 0.01 | 0.02 | 0.02 |
| Non-GAAP adjustments | - | 0.05 | 0.05 | 0.11 |
| Adjusted pro forma earnings per fully exchanged share - diluted | $0.40 | $0.36 | $0.83 | $0.94 |
(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 and impairment charges during fiscal 2024 and fiscal 2025.
(3)Expenses incurred in connection with the termination, search, and hiring of certain executive positions.
(4)Expenses incurred to establish accruals related to the settlements of legal matters.
(5)Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.
(6)Amounts related to the conflict in the Middle East and expenses incurred for professional fees related to non-recurring matters.
(7)Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 24.4% and 25.7% for the thirteen and thirty-nine weeks ended September 30, 2026, respectively, and 24.9% and 23.8% for the thirteen and thirty-nine weeks ended September 24, 2025, 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.
(8)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.
Contacts
Corey Gee, Shake Shack cblumenthal@shakeshack.com
Alison Sternberg, Shake Shack
Head of Investor Relations
(844) SHACK-04 (844-742-2504)
investor@shakeshack.com
Open the filing on EDGARThird Quarter 2026 Shareholder Letter
"Our teams stayed focused on what matters most, taking care of each other and our guests, and I am incredibly proud of how our 15,000 team members and our licensed partners showed up over the last few months and for the results they produced. Company-operated same-Shack sales grew 2.5%, including 0.8% traffic growth, marking our fifth consecutive quarter of positive traffic. Three components of our strategy continue to drive consistent same-Shack sales growth: strong restaurant operations, culinary excellence that differentiates our brand, and targeted media and digital investments that drive awareness and engagement.
We remain focused on executing with excellence, and I am encouraged by our continued operating performance," said Chief Executive Officer, Rob Lynch. "Our third quarter results demonstrate the resilience of our business and the progress we’re making across our strategic priorities. Shack sales grew 15.6% year-over-year to $408.0 million, generating restaurant-level profit of $91.7 million, or 22.5% of Shack sales.
Both our owned digital channels and third-party delivery are driving traffic growth, while our owned channels also enable us to capture valuable guest data and drive higher guest lifetime value through personalized engagement," said Chief Financial Officer, Michelle Hook. Q32026HIGHLIGHTS System-wide Sales $644.8m Delivering 12.8% growth year- over-year driven by new Shack openings, strong restaurant operations, and culinary excellence. Same-Shack Sales (SSS) Growth +2.5% SSS includes positive traffic of 0.8%, marking the fifth consecutive quarter of traffic growth and extending our streak of positive same-Shack sales growth to 23 consecutive quarters.
Restaurant-level Profit Margin1 22.5% Declining 30bps vs last year driven by increased operating expenses, and investments in labor, partially offset by lower food and paper costs. 2 BUSINESS OVERVIEW 1. Restaurant-level profit, Restaurant-level profit margin, Adjusted EBITDA and Adjusted pro forma net income are non-GAAP measures. Reconciliations to the most directly comparable financial measures presented in accordance with GAAP are set forth in the financial details section of this Shareholder Letter.
THIRD QUARTER 2026 HIGHLIGHTS:
- Total revenue grew 15.2% year-over-year to $423.3m.
- Shack sales grew 15.6% year-over-year to $408.0m.
- Licensing revenue grew 4.7% year-over-year to $15.3m.
- System-wide sales grew 12.8% year-over-year to $644.8m.
- Average weekly sales (AWS) was $75k, down 3.8% year-over-year.
- Same-Shack sales (SSS) grew 2.5% year-over-year.
- Operating income of $21.5m versus $18.5m last year.
- Restaurant-level profit margin1 of 22.5% of Shack sales versus 22.8% last year.
- Net income of $17.8m versus $13.7m last year.
- Adjusted EBITDA1 of $62.8m, up 16.0% year-over-year.
- Net income attributable to Shake Shack Inc. of $16.5m, or earnings of $0.39 per diluted share.
- Adjusted pro forma net income1 of $17.8m, or earnings of $0.40 per fully exchanged and diluted share.
- Opened 21 new Company-operated Shacks and 16 new licensed Shacks.
$81M $87M $75M $93M $92M 22.8% 22.7% 21.2% 23.0% 22.5% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0% 24.0% 26.0% 28.0% 30.0% 32.0% 34.0% 36.0% $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 3Q25 4Q25 1Q26 2Q26 3Q26 $78K $77K $72K $78K $75K 3Q25 4Q25 1Q26 2Q26 3Q26 $367M $401M $367M $418M $423M 3Q25 4Q25 1Q26 2Q26 3Q26 630 659 679 703 738 3Q25 4Q25 1Q26 2Q26 3Q26 $572M $618M $558M $626M $645M 3Q25 4Q25 1Q26 2Q26 3Q26 1. Restaurant-level profit, Restaurant-level profit margin, and Adjusted EBITDA are non-GAAP measures. Reconciliations to the most directly comparable financial measures presented in accordance with GAAP are set forth in the financial details section of this Shareholder Letter.
Adjusted EBITDA1 Average Weekly Sales (AWS) System-wide Shack Count System-wide Sales Q32026HIGHLIGHTS Q3 2026 marked five consecutive quarters of positive traffic and our 23rd consecutive quarter of positive same-Shack sales growth, alongside Q3 record unit expansion and 16% Adjusted EBITDA growth. 3 Total revenue grew 15.2% year-over-year. System-wide sales grew 12.8% year-over-year. AWS was down 3.8% year-over-year.
System-wide unit count grew 17.1% year-over-year, including:
- 69 new Company-operated Shack openings
- 49 new licensed Shack openings
- 9 licensed Shack closures
- 1 Company-operated Shack closure Adjusted EBITDA increased 16.0% year-over-year and was 14.8% of Total revenue. % label indicates Adjusted EBITDA margin. % label indicates Restaurant-level profit margin.1 Restaurant-level profit grew 13.8% year-over-year and was 22.5% of Shack sales. $54M $56M $37M $61M $63M 14.7% 14.0% 10.1% 14.7% 14.8% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% -$8 $2 $12 $22 $32 $42 $52 $62 3Q25 4Q25 1Q26 2Q26 3Q26 Total Revenue Restaurant-level Profit1
4 TO OUR SHAREHOLDERS Our third quarter results delivered on our plan to drive consistent comp sales and traffic growth, including our fifth consecutive quarter of positive traffic. We opened a Q3 record number of Shacks, reinforcing our confidence in the path to our long-term guidance of 1,500 Company-operated Shacks. Despite a pressured consumer, Restaurant-level margins remained healthy at 22.5%, Adjusted EBITDA grew 16.0%, and we opened 21 new Company-operated Shacks, bringing year-to-date openings to 54.
Our improvements in restaurant operations continue to elevate the guest experience while delivering strong margins. By pairing the highest quality ingredients with operational excellence and Enlightened Hospitality, we deliver a strong value proposition that reflects our premium positioning. Targeted media and digital investments continue to strengthen guest engagement and drive traffic growth.
As we build out our loyalty program and focus on expanding our guest database and targeting capabilities, we now define our digital mix as the channels where we control our communication and interaction with our guests. Our owned digital channels now include In-Shack Kiosks, App and Web platforms, and represented approximately 60% of Shack sales in Q3. As we have communicated in the past, our digital guests visit more frequently and spend more over the course of a year.
These efforts help us attract and retain guests and increase lifetime value, and they strengthen the foundation for the loyalty and lifecycle marketing we are building, all while maintaining promotional and pricing discipline. Culinary innovation differentiates Shake Shack and drives guest excitement. While our core burgers, fries, and shakes remain at the center of our menu, we complement them with premium LTOs that aim to drive trial, frequency, and check growth.
In July, we introduced our West Coast-inspired platform, which delivered strong guest satisfaction and a robust organic social media response. In September, we launched our premium Reese’s Peanut Butter Cup Shake, featuring our signature chocolate crackable shell, which helped support comp and traffic growth. We closed the quarter by welcoming back our Black Truffle menu, our number one requested LTO, and our innovation pipeline remains strong.
We continue to make meaningful progress on Project Catalyst, the technology foundation that will support Shake Shack’s next chapter of growth. Our work across restaurant systems, digital platforms, loyalty capabilities, data infrastructure, and AI tools has one simple goal: making it easier for guests to choose Shake Shack and easier for our teams to deliver great experiences. I am proud of the progress we’re making and thankful to our corporate and restaurant teams for staying focused, working hard, and believing in our future.
Their actions to strengthen restaurant operations, deliver culinary innovation, expand our development pipeline, and build scalable marketing and technology capabilities are the reasons we delivered our twenty-third consecutive quarter of same-Shack sales growth and continue to have strong operating margins. We remain focused on executing our strategy and building on this strong foundation to drive continued growth, strengthen our business, and deliver long-term value. November 5, 2026
WE ARE BUILDING A PIPELINE OF LEADERS TO SUPPORT OUR ROAD TO 1,500 SHACKS.
- Set clear expectations and hold ourselves accountable.
- Empower leaders to make an impact.
- Develop people and grow careers.
- Targeted media and digital investments continue to drive engagement and traffic.
- Our app remains our strangest traffic driver, with owned digital channels representing ~60% of Shack sales.
- Premium shake innovation, including the Reese’s Peanut Butter Cup Shake, continues to support comp and traffic growth.
- Opened 21 new Company-operated Shacks in Q3; 54 YTD vs. 30 last year.
- Entered South Carolina, expanding our footprint to 36 states.
- Maintaining disciplined growth focused on strong long-term returns.
- Opened 16 licensed Shacks in Q3; 32 YTD.
- Announced entry into Brazil, a major global restaurant market.
- On track to debut in Panama, Vietnam, and regional U.S. casinos with PENN Entertainment in Q4. 2026 STRATEGIC PRIOR I TIE SQ 32026 PROGRESS
- Supply chain optimization remains a key opportunity to mitigate cost pressures.
- Strong labor attainment is reducing overtime and supporting margins.
- We continue to advance the technology foundation supporting Shake Shack's next chapter of growth. (6) INVEST IN LONG-TERM STRATEGIC CAPABILITIES (5) ACCELERATE OUR LICENSED BUSINESS (4) BUILD & OPERATE OUR SHACKS WITH BEST-IN-CLASS RETURNS (3) DRIVE COMP SALES BEHIND CULINARY, MARKETING, & DIGITAL INNOVATION (1) BUILD A CULTURE OF LEADERS WE ARE DRIVING PROFITABILTIY WITH A FOCUS ON DEVELOPING OUR PEOPLE AND ACCOUNTABILITY ON PERFORMANCE. OUR GREATEST OPPORTUNITY TO GROW SAME-SHACK SALES IS THROUGH FREQUENCY. WE ARE GROWING OUR INDUSTRY LEADING CASH-ON-CASH RETURNS. WE ARE BUILDING THE PIPELINE FOR GROWTH AROUND THE GLOBE. WE ARE ACCELERATING OUR PACE OF INNOVATION. ROAD TO 1500 (2) OPTIMIZE RESTAURANT AND SUPPLY CHAIN OPERATIONS
- Advancing POS, loyalty, and AI-enabled tools.
- Building loyalty capabilities to deepen guest engagement.
- Targeting Shack upgrades to enhance the guest experience.
LICENSED BUSINESS HIGHLIGHTS 1. Licensing sales is an operating measure and consists of sales from 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 fees, such as territory fees, opening fees, and termination fees. 6 $218.7M $232.7M $204.3M $222.4M $236.8M Licensing Sales 8% WE GREW LICENSING SALES 8.3% VERSUS LAST YEAR 15% 26% YoY Licensing Sales Growth 14% 8% 7 17 5 11NSOs Our Licensing revenue grew 4.7% year-over-year to $15.3m and Licensing sales1 grew by 8.3% to $236.8m. Our licensed partners delivered a solid quarter despite a challenging global backdrop. While the conflict in the Middle East continued to impact results in the region, those pressures moderated relative to the first half of the year.
At the same time, we saw strong performance from new Shacks in U.S. airports, Canada, and the United Kingdom. We opened 14 net new licensed Shacks in Q3, including 16 new Shack openings and 2 closures. Given our strong development pipeline, we now expect to land at the high end of our 40 to 45 licensed Shack opening range in 2026, bringing Shake Shack to Panama, Vietnam, and U.S. regional casinos with PENN Entertainment in the fourth quarter. 3Q25 4Q25 1Q26 2Q26 3Q26 16 Fiscal July 2026 Fiscal August 2026 Fiscal September 2026 Dasan Hyundai Premium Outlet, Gyeonggi, Korea Oasis Coyoacan, Mexico City, Mexico Lize Paradise Walk, Beijing, China Manila, Philippines Reading, Berkshire, United Kingdom Terraza Palacio Santa Fe, Mexico City, Mexico Hakata Station, Fukuoka, Japan Macleod Trail, Calgary, Canada Jiuguang Center, Shanghai, China Robinson's Manila, Manila, Philippines London Bridge, London, United Kingdom Terraza Palacio Coyocan, Mexico City, Mexico Terraza Palacio Perisur, Mexico City, Mexico Parkway Parade, Singapore Changying Paradise Walk, Beijing, China Yonge & Bloor, Toronto, Canada Koru Florya, Istanbul, Turkey Fukuoka, Japan Toronto, CanadaLondon, United Kingdom
5% 2% 5% 4% 3% 1% 1% 1% 2% 1% 4% 2% 3% 2% 2% Third Quarter 2025 Fourth Quarter 2025 First Quarter 2026 Second Quarter 2026 Third Quarter 2026 Total SSS % Traffic % Price/Mix % Same-Shack sales grew 2.5% year-over-year in 3Q26, including 0.8% positive traffic. Traffic growth continues to be driven by strength in our third-party delivery and owned digital channels (kiosk, app, and web). Our owned channels are where we capture guest data and build higher lifetime value.
We achieved positive same-Shack sales against our toughest prior-year comparison of the year, which included our initial investments in increased marketing and the debut of the Dubai Chocolate Shake. Price / mix grew 1.7%. Gross pricing across all channels was approximately 4% for the quarter.
Mix was pressured as we deliberately invested in guest engagement through targeted offers, promotions, and channel-specific marketing initiatives designed to drive traffic and strengthen value perception. In October, we implemented an additional 1% menu price increase to help offset inflationary pressures. 3Q26 SSS1,2 UP 2.5% VERSUS PRIOR YEAR AW SAND SAME - SHACK SALES 171. Same-Shack sales, or “SSS”, and same-Shack sales growth are key metrics.
As a reminder, SSS excludes the impact of closures that are two consecutive days or more, but one day closures and the impact of operating with fewer hours are included. 2. To normalize for the 53rd week in fiscal 2025, the compare periods for 2025 have been shifted forward one week from the fiscal calendar, in order to show a more like-for-like comparison SSS1,2 BY REGION VERSUS PRIOR YEAR -1% -1% 2% 3% 7% 2% 8% 2% 7% 6% Third Quarter 2025 Fourth Quarter 2025 First Quarter 2026 Second Quarter 2026 Third Quarter 2026 NYC (incl. Manhattan) Northeast South West Midwest Third quarter AWS was $75k, down 3.8% year- over-year.
The decline in average weekly sales was primarily driven by the rapid expansion of our restaurant base, as newer Shacks continue to ramp toward mature sales volumes and represent a larger portion of the system. $78K $77K $72K $78K $75K Total YoY Shack Sales Growth 16% Fourth Quarter 2025 18% 16% First Quarter 2026 22% Second Quarter 2026 14% Third Quarter 2025 Third Quarter 2026 Average Weekly Sales
8 RESTAURANT - LEVEL PROFIT Restaurant-level costs in the third quarter (covered in more detail on the following pages) were as follows:
- Food and paper costs were 28.3% of Shack sales.
- Labor and related expenses were 25.4% of Shack sales.
- Other operating expenses were 16.1% of Shack sales.
- Occupancy and related expenses were 7.7% of Shack sales. We delivered another quarter of healthy restaurant-level profitability despite a challenging operating environment. The work we have done over the past several years to strengthen our restaurant operations and supply chain, have improved service levels and delivered productivity across the business. This allows us to balance margin expansion with investments that support traffic growth, strengthen our value proposition, and enhance the guest experience. 1. Restaurant-level profit and Restaurant-level profit margin are non-GAAP measures. A reconciliation to the most directly comparable financial measure presented in accordance with GAAP is set forth in the financial details section of this Shareholder Letter. $81M $87M $75M $93M $92M 3Q25 4Q25 1Q26 2Q26 3Q26 Restaurant-level Profit1 ($) Restaurant-level Profit Margin1 (%) Restaurant-level profit grew 13.8% year-over-year. Restaurant-level profit margin decreased 30 bps year-over-year. 22.8% 22.7% 21.2% 23.0% 22.5% 3Q25 4Q25 1Q26 2Q26 3Q26
9 RESTAURANT - LEVEL PROFIT FOOD & PAPER COSTS Food and paper costs (“COGS”) were 28.3% of Shack sales in the third quarter, down 100 bps year-over-year. The percentage decrease year over year was mainly driven by menu price and lower commodity costs, partially offset by promotional activity during the quarter. Blended food and paper costs declined by low single digits in the third quarter, as lower costs across buns, chicken, and dairy more than offset continued elevated beef costs.
COGS as a % of Shack Sales
- Beef, which is approximately 35% of our food and paper basket, up low-single-digits year-over-year in Q3.
- Total food inflation down low-single-digits year-over-year in Q3, representing approximately 90% of our food and paper basket.
- Paper and packaging inflation was down low-single-digits year-over-year in Q3, approximately 10% of our food and paper basket.
- Total blended food & paper inflation down low-single-digits year-over-year in Q3. 29.3% 28.7% 28.3% 28.8% 28.3% 3Q25 4Q25 1Q26 2Q26 3Q26
Occupancy and related expenses (“Occupancy”) were 7.7% of Shack sales in the third quarter, flat year-over-year. Other operating expenses (“Other opex”) were 16.1% of Shack sales in the third quarter, up 90 bps year-over-year. The increase was driven primarily by higher delivery commissions, reflecting the strength of our delivery business and traffic-driving channel investments, as well as the impact of the accelerating cadence of new Shack openings. 7.7% 7.6% 8.1% 7.5% 7.7% 3Q25 4Q25 1Q26 2Q26 3Q26 15.2% 15.5% 16.2% 15.6% 16.1% 3Q25 4Q25 1Q26 2Q26 3Q26 RESTAURANT - LEVEL PROFIT LABOR , OTHER OPEX & OCCUPANCY 24.9% 25.4% 26.2% 25.1% 25.4% 3Q25 4Q25 1Q26 2Q26 3Q26 Labor as a % of Shack Sales Labor and related expenses (“Labor”) were 25.4% of Shack sales in the third quarter, up 50 bps year-over-year primarily reflecting investments in the team member experience and delivering strong guest satisfaction.
Accordingly, we take a disciplined approach to labor, ensuring our Shacks are staffed to deliver the level of hospitality and execution our guests expect while continuing to drive productivity and efficiency. Occupancy as a % of Shack Sales Other Opex as a % of Shack Sales
G&A Expenses Third quarter General and administrative (“G&A”) expenses were $45.0m, 10.6% of Total revenue, an increase of $0.6m compared to the prior year. The year-over-year increase primarily reflects investments in our team members and technology capabilities, partially offset by efficiencies in our marketing spend. $27M $26M $29M $31M $33M 3Q25 4Q25 1Q26 2Q26 3Q26 Depreciation and Amortization Expense $5M $5M $7M $7M $7M 3Q25 4Q25 1Q26 2Q26 3Q26 Pre-opening Costs ADDITIONAL EXPENSES & ADJUSTED EBITDA 1. Adjusted EBITDA is a non-GAAP measure.
A reconciliation to the most directly comparable financial measures presented in accordance with GAAP are set forth in the financial details section of this Shareholder Letter. Adjusted EBITDA increased 16.0% year-over-year to $62.8m, or 14.8% of Total revenue - 10 bps higher than last year. EBITDA adjustments for 3Q26 totaled $6.0m, consisting of (i) equity-based compensation of $5.0m, (ii) impairments, loss on disposal of assets, and Shack closures of $0.6m, (iii) $0.3m of amortization of cloud-based software implementation costs, and (iv) $0.1m of other expenses for professional fees related to non-recurring matters.
Adjusted EBITDA1 11 Depreciation and amortization expense was $32.9m. We continue to see an increase in depreciation year-over-year as a result of more Company-operated Shack openings and new technology investments. Pre-opening costs were $7.0m.
Pre-opening costs continue to be higher year-over-year, driven by the higher volume of Shacks openings and investments to support our expanding pipeline. $44M $51M $54M $48M $45M 3Q25 4Q25 1Q26 2Q26 3Q26 $54M $56M $37M $61M $63M 14.7% 14.0% 10.1% 14.7% 14.8% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 17.0% 19.0% 21.0% 23.0% 25.0% $0 $10 $20 $30 $40 $50 $60 $70 3Q25 4Q25 1Q26 2Q26 3Q26 % label indicates Adjusted EBITDA margin
Fiscal year 2026 guidance is derived from preliminary, unaudited results based on information currently available to the Company. We factor in an assumption around a degree of pressure on the consumer spending landscape and ongoing inflationary headwinds and do not reflect any change in the current environment including potential changes to tariffs, amongst other factors. While the Company believes these estimates are meaningful, they could differ from the actual results that the Company ultimately reports in its Annual Report on Form 10-K for the fiscal year ending December 30, 2026.
FINANCIAL OUTLOOK 13 1. To normalize for the 53rd week in fiscal 2025, the compare periods for 2025 have been shifted forward one week from the fiscal calendar, in order to show a more like-for-like comparison. 2. Equity-based compensation is comprised of $17m in G&A and $3m in Restaurant-level profit .
These forward-looking projections are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from these projections. Factors that may cause such differences include those discussed in the Company's Form 10-K for the fiscal year ended December 31, 2025, our other Quarterly Reports on Form 10-Q and our other filings with the Securities and Exchange Commission, and our Cautionary Note On Forward-Looking Statements herein. These forward-looking projections should be reviewed in conjunction with the consolidated financial statements and the section titled “Cautionary Note Regarding Forward-Looking Statements”, within the Company’s Form 10-K, which form the basis of our assumptions used to prepare these forward-looking projections.
You should not attribute undue certainty to these projections, and we undertake no obligation to revise or update any forward-looking information, except as required by law. Restaurant-level profit margin, Adjusted EBITDA and Adjusted Pro Forma Tax Rate are non-GAAP measures. The Company is not able to reconcile the guided non-GAAP estimates to the most directly comparable GAAP financial measures without unreasonable effort because it is unable to predict, forecast or determine the probable significance of various reconciling items with a reasonable degree of accuracy.
Company-operated openings Licensed openings Total revenue Licensing revenue Same-Shack sales1 versus 2025 Restaurant-level profit margin General and administrative expenses Equity-based compensation2 Depreciation and amortization expense Pre-opening costs Net income Adjusted EBITDA Adjusted Pro Forma Tax Rate 60 - 65 40 - 45 $1.6b - $1.7b $57.0m - $59.0m + LSD % 22.0% - 23.0% 12.0% to 13.0% of Total revenue ~$20m $124m - $128m $26m - $28m $45m - $55m $225m - $235m 25% - 27% FY 2026 Guidance
Financial Details & Definitions
CAUTION A RY NOTE ON FOR WA RD - LOOK INGS TAT EMENTS 15 This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical fact included in this presentation are forward-looking statements, including, but not limited to, the Company's growth, including its long-term growth goals, strategic initiatives and priorities, development programs, and full year fiscal 2026 financial guidance. Forward looking statements discuss the Company's current expectations, targets and projections relating to the Company's financial position, results of operations, plans, objectives, future performance and business, including strategic priorities, expected development targets, and expected financial results and operating performance for fiscal 2026.
Forward-looking statements reflect the Company’s current expectations and projections with respect to future events and are based on certain assumptions and are subject to risks and uncertainties that could cause the Company's actual results to differ materially from trends, plans, or expectations set forth in the forward-looking statements. relating to its financial position, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim," "anticipate," "believe," "estimate," "expect," "forecast," "future," "intend," "outlook," "potential," "preliminary," "project," "projection," "plan," "seek," "target," "may," "could," "would," "will," "should," "can," "can have," "likely," the negatives thereof and other similar expressions.
Forward-looking statements notice
All forward-looking statements are expressly qualified in their entirety by these cautionary statements. Some of the factors which could cause results to differ materially from the Company’s expectations include the Company's ability to develop and open new Shacks on a timely basis, increased costs or shortages or interruptions in the supply and delivery of the Company's products, increased labor costs or shortages, inflationary pressures, interest rates, the impact of tariffs, volatility in financial markets and broader macroeconomic conditions, the impact of Shack closures, the impact of ongoing conflicts and related developments in the Middle East, the Company's management of its digital capabilities and expansion into delivery, as well as its kiosk, drive-thru and multiple format investments, risks associated with cyberattacks, data security and technology systems disruptions, the impact of adverse weather conditions, changes in consumer spending patterns, volatility in tourism and consumer travel, the Company's ability to maintain and grow sales at its existing Shacks, the performance and profitability of newly opened Shacks and licensed Shacks, risks associated with the Company's international licensing operations, and risks relating to the restaurant industry generally. You should evaluate all forward-looking statements made in this presentation in the context of the risks and uncertainties disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission ("SEC") and the Company's subsequent Quarterly Reports on Form 10-Q and other SECfilings.
There can be no assurance that the results or developments currently anticipated by the Company will be realized. All of the Company's SECfilings are available online at www.sec.gov, www.shakeshack.com or upon request from Shake Shack Inc. The forward-looking statements included in this presentation are made only as of the date hereof.
The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
DEFINITIONS 16 The following definitions, and definitions on the subsequent pages, apply to terms as used in this shareholder letter: "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, opening fees, and termination fees. "Same-Shack sales" or “SSS” 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.
"Average weekly sales" or “AWS” is calculated by dividing total Shack sales by the number of operating weeks for all Shacks in operation during the period. For Shacks that are not open for the entire period, fractional adjustments are made to the number of operating weeks open such that it corresponds to the period of associated sales. “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 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.
“EBITDA,” a non-GAAP measure, is defined as Net income before interest expense (net of interest income), Income tax expense, 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 EBITDA margin,” a non-GAAP measure, is defined as Net income before interest expense (net of interest income), Income tax expense and Depreciation and amortization expense, which also excludes 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, as a percentage of Total revenue.
“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.
DEFINITIONS 17 1. Ranges shown on a positive basis; equivalent thresholds apply to negative variances, with ~0% representing flat performance. Range Percent LSD 0.5% - 3.9% MSD 4% - 6.9% HSD 7% - 9.9% Low Teens 10.0% - 13.9% Mid Teens 14.0% - 16.9% High Teens 17.0% - 19.9% Percentage Range Definitions1
DEVELOPMENT HIGHLIGHTS 18 Company- operated Licensed System Wide Shack counts at the beginning of period 406 297 703 Openings 21 16 37 Permanent closures - (2) (2) Shack counts at the end of period 427 311 738 Shacks in the comparable base 304 Thirteen Weeks Ended September 30, 2026 Company- operated Licensed System Wide Shack counts at the beginning of period 373 286 659 Openings 54 32 86 Permanent closures - (7) (7) Shack counts at the end of period 427 311 738 Shacks in the comparable base 304 Thirty-Nine Weeks Ended September 30, 2026
BALANCE SHEETS ( UNAUDITED ) 19 September 30, December 31, 2026 2025 ASSETS Current assets: Cash and cash equivalents 319,004$ 360,123$ Accounts receivable, net 30,563 32,962 Inventories 7,562 7,182 Prepaid expenses and other current assets 40,242 30,080 Total current assets 397,371 430,347 Property and equipment, net of accumulated depreciation of $630,566 and $551,004 respectively. 695,791 625,851 Operating lease assets 568,563 507,253 Deferred income taxes, net 315,438 322,385 Other assets 8,132 10,373 TOTAL ASSETS 1,985,295$ 1,896,209$ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 25,085$ 24,747$ Accrued expenses 82,599 103,354 Accrued wages and related liabilities 24,375 25,481 Operating lease liabilities, current 69,850 63,553 Other current liabilities 29,043 27,783 Total current liabilities 230,952 244,918 Long-term debt 248,517 247,731 Long-term operating lease liabilities 639,888 575,138 Liabilities under tax receivable agreement, net of current portion 244,030 244,463 Other long-term liabilities 27,095 30,210 Total liabilities 1,390,482 1,342,460 Commitments and contingencies Stockholders' equity: Preferred stock, no par value - 10,000,000 shares authorized; none issued and outstanding as of September 30, 2026 and December 31, 2025. - - Class A common stock, $0.001 par value - 200,000,000 shares authorized; 40,415,423 and 40,254,281 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively. 40 40 Class B common stock, $0.001 par value - 35,000,000 shares authorized; 2,385,789 and 2,434,789 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively. 2 2 Additional paid-in capital 459,366 452,577 Retained earnings 104,585 72,709 Accumulated other comprehensive loss (6) (1) Total stockholders' equity attributable to Shake Shack, Inc. 563,987 525,327 Non-controlling interests 30,826 28,422 Total equity 594,813 553,749 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 1,985,295$ 1,896,209$ (in thousands, except share and per share amounts)
STATEMENTS OF INCOME ( UNAUDITED ) 20 Shack sales 408,026$ 96.4% 352,846$ 96.0% 1,165,510$ 96.5% 1,005,908$ 96.3% Licensing revenue 15,247 3.6% 14,565 4.0% 42,118 3.5% 38,867 3.7% TOTAL REVENUE 423,273 100.0% 367,411 100.0% 1,207,628 100.0% 1,044,775 100.0% Shack-level operating expenses(1): Food and paper costs 115,276 28.3% 103,461 29.3% 331,575 28.4% 286,119 28.4% Labor and related expenses 103,823 25.4% 88,033 24.9% 297,766 25.5% 262,759 26.1% Other operating expenses 65,828 16.1% 53,779 15.2% 186,458 16.0% 152,809 15.2% Occupancy and related expenses 31,366 7.7% 26,995 7.7% 90,171 7.7% 77,219 7.7% General and administrative expenses 44,989 10.6% 44,381 12.1% 146,918 12.2% 125,692 12.0% Depreciation and amortization expense 32,930 7.8% 27,079 7.4% 92,767 7.7% 80,167 7.7% Pre-opening costs 6,978 1.6% 4,625 1.3% 20,486 1.7% 12,798 1.2% Impairments, loss on disposal of assets, and Shack closures 601 0.1% 510 0.1% 1,893 0.2% 3,448 0.3% TOTAL EXPENSES 401,791 94.9% 348,863 95.0% 1,168,034 96.7% 1,001,011 95.8% INCOME FROM OPERATIONS 21,482 5.1% 18,548 5.0% 39,594 3.3% 43,764 4.2% Other income, net 2,459 0.6% 3,103 0.8% 7,804 0.6% 8,924 0.9% Interest expense (567) (0.1)% (504) (0.1)% (1,668) (0.1)% (1,615) (0.2)% INCOME BEFORE INCOME TAXES 23,374 5.5% 21,147 5.8% 45,730 3.8% 51,073 4.9% Income tax expense 5,607 1.3% 7,436 2.0% 11,375 0.9% 14,366 1.4% NET INCOME 17,767 4.2% 13,711 3.7% 34,355 2.8% 36,707 3.5% Less: Net income attributable to non-controlling interests 1,281 0.3% 1,210 0.3% 2,479 0.2% 2,813 0.3% NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC. 16,486$ 3.9% 12,501$ 3.4% 31,876$ 2.6% 33,894$ 3.2% Earnings per share of Class A common stock: Basic $ 0.41 $ 0.31 $ 0.79 $ 0.84 Diluted $ 0.39 $ 0.30 $ 0.76 $ 0.81 Weighted-average shares of Class A common stock outstanding: Basic 40,399 40,250 40,349 40,199 Diluted 41,910 41,874 41,885 41,852 _______________ (1) September 24, September 24, Thirteen Weeks Ended Thirty-Nine Weeks Ended (in thousands, except per share amounts) 2026 2025 2026 2025 September 30, September 30, As a percentage of Shack sales.
CASHFLOWS TAT EMENTS ( UNAUDITED ) 21 September 30, September 24, (in thousands) 2026 2025 OPERATING ACTIVITIES Net income (including amounts attributable to non-controlling interests) 34,355$ 36,707$ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 92,767 80,167 Amortization of debt issuance costs 786 786 Amortization of cloud computing assets 1,334 1,676 Non-cash operating lease cost 77,313 64,489 Equity-based compensation 14,077 14,173 Deferred income taxes 7,474 9,238 Non-cash interest 41 31 Impairments, loss on disposal of assets, and Shack closures 1,893 3,448 Changes in operating assets and liabilities: Accounts receivable 2,399 (925) Inventories (380) (297) Prepaid expenses and other current assets (6,980) (4,134) Other assets (2,644) (4,634) Accounts payable 973 (610) Accrued expenses (19,056) 22,078 Accrued wages and related liabilities (1,106) 524 Other current liabilities (788) (1,377) Operating lease liabilities (67,379) (65,713) Other long-term liabilities 953 3,592 NET CASH PROVIDED BY OPERATING ACTIVITIES 136,032 159,219 INVESTING ACTIVITIES Purchases of property and equipment (162,405) (106,697) NET CASH USED IN INVESTING ACTIVITIES (162,405) (106,697) FINANCING ACTIVITIES Payments on principal of finance leases (4,999) (4,013) Deferred financing costs - (10) Distributions paid to non-controlling interest holders (2,931) (1,758) Payments under tax receivable agreement, including interest (977) (37) Net proceeds from stock option exercises 69 123 Employee withholding taxes related to net settled equity awards (5,903) (9,784) NET CASH USED IN FINANCING ACTIVITIES (14,741) (15,479) Effect of exchange rate changes on cash and cash equivalents (5) - INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (41,119) 37,043 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 360,123 320,714 CASH AND CASH EQUIVALENTS AT END OF PERIOD 319,004$ 357,757$
R E S TA URA NT - LEVEL PROFIT DEFINITIONS 22 Restaurant-Level Profit “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 "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. 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 ovides 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 operating income, the most directly comparable GAAP financial measure, is set forth on next slide.
R E S TA URA NT - LEVEL PROFIT 23 (dollar amounts in thousands) September 30, 2026 September 24, 2025 September 30, 2026 September 24, 2025 Income from operations 21,482$ 18,548$ 39,594$ 43,764$ Less: Licensing revenue 15,247 14,565 42,118 38,867 Add: General and administrative expenses 44,989 44,381 146,918 125,692 Depreciation and amortization expense 32,930 27,079 92,767 80,167 Pre-opening costs 6,978 4,625 20,486 12,798 Impairments, loss on disposal of assets, and Shack closures 601 510 1,893 3,448 Restaurant-level profit 91,733$ 80,578$ 259,540$ 227,002$ Total revenue 423,273$ 367,411$ 1,207,628$ 1,044,775$ Less: Licensing revenue 15,247 14,565 42,118 38,867 Shack sales 408,026$ 352,846$ 1,165,510$ 1,005,908$ Restaurant-level profit margin(1) 22.5% 22.8% 22.3% 22.6% (1) Thirteen Weeks Ended Thirty-Nine Weeks Ended As a percentage of Shack sales.
EBITDA and Adjusted EBITDA EBITDA, a non-GAAP measure, is defined as Net income before interest expense (net of interest income), Income tax expense 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. 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 on next slide. A DJ USTED EBIT DA DEFINITIONS
A DJ USTED EBIT DA 25 (dollar amounts in thousands) September 30, 2026 September 24, 2025 September 30, 2026 September 24, 2025 Net income 17,767$ 13,711$ 34,355$ 36,707$ Depreciation and amortization expense 32,930 27,079 92,767 80,167 Interest expense, net 525 472 1,509 1,495 Income tax expense 5,607 7,436 11,375 14,366 EBITDA 56,829$ 48,698$ 140,006$ 132,735$ Equity-based compensation 4,995 4,423 14,077 14,173 Amortization of cloud-based software implementation costs 291 510 1,334 1,676 Impairments, loss on disposal of assets, and Shack closures 601 510 1,893 3,448 Executive transition costs(1) 31 - 2,282 414 Legal settlements(2) - - 848 983 Restatement costs(3) - - - 354 Other(4) 47 - 520 3 Adjusted EBITDA 62,794$ 54,141$ 160,960$ 153,786$ Adjusted EBITDA margin (5) 14.8% 14.7% 13.3% 14.7% (1) (2) (3) (4) Amounts related to the conflict in the Middle East and expenses incurred for professional fees related to non-recurring matters. (5) Calculated as a percentage of Total revenue, which was $423.3 million and $1,207.6 million for the thirteen and thirty-nine weeks ended September 30, 2026, respectively, and $367.4 million and $1,044.8 million for the thirteen and thirty-nine weeks ended September 24, 2025, respectively. Expenses incurred in connection with the termination, search, and hiring of certain executive positions. Thirteen Weeks Ended Thirty-Nine Weeks Ended Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.
Expenses incurred to establish accruals related to the settlements of legal matters.
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 DJ USTED PROFORMA NETINCOME AND EARNINGS PER SHARE DEFINITIONS
A DJ USTED PROFORMA NETINCOME AND EARNINGS PER SHARE 27 (in thousands, except per share amounts) September 30, 2026 September 24, 2025 September 30, 2026 September 24, 2025 Numerator: Net income attributable to Shake Shack Inc. 16,486$ 12,501$ 31,876$ 33,894$ Adjustments: Reallocation of Net income attributable to non-controlling interests from the assumed exchange of LLC Interests(1) 1,281 1,210 2,479 2,813 Impairment charges and Shack closures(2) 32 (44) 67 1,904 Executive transition costs(3) 31 - 2,282 414 Legal settlements(4) - - 848 983 Restatement costs(5) - - - 354 Other(6) 47 - 520 3 Tax impact of above adjustments(7) (123) 2,187 (1,325) 1,363 Adjusted pro forma net income 17,754$ 15,854$ 36,747$ 41,728$ Denominator: Weighted-average shares of Class A common stock outstanding - diluted 41,910 41,874 41,885 41,852 Adjustments: Assumed exchange of LLC Interests for shares of Class A common stock(1) 2,400 2,437 2,420 2,443 44,310 44,311 44,305 44,295 Adjusted pro forma earnings per fully exchanged share - diluted 0.40$ 0.36$ 0.83$ 0.94$ September 30, 2026 September 24, 2025 September 30, 2026 September 24, 2025 Earnings per share of Class A common stock - diluted 0.39$ 0.30$ 0.76$ 0.81$ Assumed exchange of LLC Interests for shares of Class A common stock(1) 0.01 0.01 0.02 0.02 Non-GAAP adjustments(8) - 0.05 0.05 0.11 Adjusted pro forma earnings per fully exchanged share - diluted 0.40$ 0.36$ 0.83$ 0.94$ (1) (2) Expenses incurred related to Shack closures and impairment charges during fiscal 2024 and fiscal 2025. (3) Expenses incurred in connection with the termination, search, and hiring of certain executive positions. (4) Expenses incurred to establish accruals related to the settlements of legal matters. (5) Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K. (6) (7) (8) Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 24.4% and 25.7% for the thirteen and thirty-nine weeks ended September 30, 2026, respectively, and 24.9% and 23.8% for the thirteen and thirty-nine weeks ended September 24, 2025, 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. 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. Amounts related to the conflict in the Middle East and expenses incurred for professional fees related to non-recurring matters. Thirteen Weeks Ended Thirty-Nine Weeks Ended Adjusted pro forma fully exchanged weighted-average shares of Class A common stock outstanding - diluted Thirteen Weeks Ended Thirty-Nine Weeks Ended 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.
Adjusted Pro Forma Effective Tax Rate Adjusted pro forma effective tax rate represents the effective tax rate 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 its recurring business operations. How This Measure Is Useful When used in conjunction with GAAP financial measures, adjusted pro forma effective tax rate is a supplemental measure of operating performance that the Company believes is useful to evaluate its performance period over period and relative to its competitors. By assuming the full exchange of all outstanding LLC Interests, the Company believes this measure facilitates 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 effective tax rate 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 this Measure Adjusted pro forma effective tax rate may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of adjusted pro forma effective tax rate should not be considered an alternative to effective tax rate, as determined under GAAP. While this measure is useful in evaluating the Company's performance, it does not account for the effective tax rate attributable to the non-controlling interest holders and therefore does not provide a complete understanding of effective tax rate.
Adjusted pro forma effective tax rate should be evaluated in conjunction with GAAP financial results. A reconciliation of adjusted pro forma effective tax rate, the most directly comparable GAAP measure, is set forth on next slide. A DJUSTED PROFORMA EFFECTIVE TAX RATE DEFINITIONS
2026 A DJUSTED PROFORMA EFFECTIVE TAX RATE 29 2025 A DJUSTED PROFORMA EFFECTIVE TAX RATE (dollar amounts in thousands) Income Tax Expense Income Before Income Taxes Effective Tax Rate Income Tax Expense Income Before Income Taxes Effective Tax Rate As reported 5,607$ 23,374$ 24.0% 11,375$ 45,730$ 24.9% Non-GAAP adjustments (before tax): Executive transition costs - 31 - - 2,282 - Legal settlements - - - - 848 - Impairment charge and Shack closures - 32 - - 67 - Other Adjustments - 47 - - 520 - Tax effect of non-GAAP adjustments and assumed exchange of outstanding LLC Interests 123 - - 1,325 - - Adjusted pro forma 5,730$ 23,484$ 24.4% 12,700$ 49,447$ 25.7% Less: Net tax impact from stock-based compensation (58) - - (528) - - Adjusted pro forma 5,672$ 23,484$ 24.2% 12,172$ 49,447$ 24.6% Thirteen Weeks Ended Thirty-Nine Weeks Ended September 30, 2026 September 30, 2026 (dollar amounts in thousands) Income Tax Expense Income Before Income Taxes Effective Tax Rate Income Tax Expense Income Before Income Taxes Effective Tax Rate As reported 7,436$ 21,147$ 35.2% 14,366$ 51,073$ 28.1% Non-GAAP adjustments (before tax): Legal settlements - - - - 983 - Executive transition costs - - - - 414 - Impairment charge and Shack closures - (44) - - 1,904 - Restatement costs - - - - 354 - Other Adjustments - - - - 3 - Tax effect of non-GAAP adjustments and assumed exchange of outstanding LLC Interests (2,187) - - (1,363) - - Adjusted pro forma 5,249$ 21,103$ 24.9% 13,003$ 54,731$ 23.8% Less: Net tax impact from stock-based compensation 42 - - 566 - - Adjusted pro forma 5,291$ 21,103$ 25.1% 13,569$ 54,731$ 24.8% September 24, 2025 September 24, 2025 Thirteen Weeks Ended Thirty-Nine Weeks Ended
INVESTOR CONTACT Alison Sternberg, Shake Shack Head of Investor Relations (844) Shack-04 (844-742-2504) investor@shakeshack.com MEDIA CONTACT Corey Gee, Shake Shack cblumenthal@shakeshack.com CONTACT INFORMATION