Financial Data and Key Metrics Changes - Total revenue for Q2 was $356.5 million, exceeding guidance, with system-wide sales growing 13.7% year-over-year to $549.9 million [32] - Adjusted EBITDA grew by 24.8% year-over-year to $58.9 million, representing 16.5% of total revenue, marking the highest adjusted EBITDA level on record [39] - Net income attributable to Shake Shack Inc. was $17.1 million or $0.41 per diluted share, with adjusted pro forma net income at $19.5 million or $0.44 per fully exchanged and diluted share [40] Business Line Data and Key Metrics Changes - In the licensed business, revenue grew by 20.2% year-over-year to $13.3 million, with sales up approximately 16% to $206.7 million [32] - Company-operated Shack sales increased by 12.4% year-over-year to $343.2 million, with 13 new Shack openings [32] - Average weekly sales were $78,000, with 1.8% same Shack sales growth [33] Market Data and Key Metrics Changes - Traffic was down 70 basis points, but trends improved each month of the quarter, with positive traffic exiting the quarter and into July [33] - Same Shack sales growth was 1.8% in Q2, improving to 3.2% in July due to culinary innovation and marketing efforts [17][33] Company Strategy and Development Direction - The company focuses on three strategic priorities: driving same Shack sales, expanding globally, and improving profitability [10] - Shake Shack is committed to a culture of leadership and operational excellence, investing in team member development and kitchen innovations [12][14] - The company plans to open 45 to 50 company-operated Shacks in 2025, marking the largest class in company history [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in raising adjusted EBITDA guidance for the full year, despite ongoing industry challenges [9] - The company is optimistic about its culinary innovation pipeline and marketing strategies to drive traffic and sales growth [66][70] - Management highlighted the importance of operational improvements and supply chain optimizations to mitigate inflationary pressures [78] Other Important Information - Shake Shack raised over $100,000 to support communities affected by recent floods [8] - The company is on track to reduce build costs by at least 10% this year, despite global supply chain uncertainties [26] Q&A Session Summary Question: Can you elaborate on the margin front and labor productivity improvements? - Management noted significant improvements in labor productivity and operational efficiencies, contributing to expanded restaurant level margins by 190 basis points year-over-year [55][56] Question: What are the new learnings from the kitchen innovation lab? - Management shared that new kitchen equipment has improved throughput and service times, enhancing operational efficiency [59][60] Question: How will the new culinary calendar impact advertising and marketing? - The company plans to create awareness through paid media investments, focusing on culinary innovations and limited-time offers [66][67] Question: What has changed in the outlook that allowed for increased EBITDA guidance? - Management indicated strong performance in restaurant margins and confidence in continued strength, leading to an increase in EBITDA guidance [76] Question: How will marketing and culinary innovations be margin accretive? - The company expects new premium-priced menu items to drive sales and improve margins, alongside operational productivity [78][80]

Financial Data and Key Metrics Changes - Total revenue for Q2 was $356.5 million, exceeding guidance, with system-wide sales growing 13.7% year-over-year to $549.9 million [30] - Adjusted EBITDA grew by 24.8% year-over-year to $58.9 million, representing 16.5% of total revenue, marking the highest adjusted EBITDA level on record [36] - Net income attributable to Shake Shack Inc. was $17.1 million or $0.41 per diluted share, with adjusted pro forma net income at $19.5 million or $0.44 per fully exchanged and diluted share [37] Business Line Data and Key Metrics Changes - Company-operated Shack sales grew 12.4% year-over-year to $343.2 million, with 13 new Shack openings [30] - The license business saw revenue growth of 20.2% year-over-year to $13.3 million, with sales up approximately 16% to $206.7 million [30] - Restaurant level profit reached $82.2 million, or 23.9% of Shack sales, a 190 basis point improvement year-over-year [33] Market Data and Key Metrics Changes - Average weekly sales were $78,000, with 1.8% same Shack sales growth, improving to 3.2% in July [31][16] - Traffic was down 70 basis points, but trends improved each month of the quarter, with positive traffic exiting the quarter [31] - Culinary innovation contributed approximately one percentage point of growth to same Shack sales, driven by summer barbecue and merchandising improvements [32] Company Strategy and Development Direction - The company is focused on three strategic priorities: driving same Shack sales, expanding globally, and improving profitability [8] - Plans to open 45 to 50 company-operated Shacks in 2025, marking the largest class in company history [22] - The introduction of a culinary calendar with four main platforms per year aims to enhance marketing and product offerings [61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in raising adjusted EBITDA guidance for the full year, despite ongoing industry headwinds [7] - The company is optimistic about its ability to navigate inflationary pressures and maintain strong cash flow [38] - Future growth is expected to be supported by a robust pipeline of culinary innovations and increased marketing investments [42] Other Important Information - The company raised over $100,000 to support communities affected by floods in Texas and North Carolina [6] - Shake Shack is now served on Delta flights across 13 domestic airports, receiving positive guest feedback [25] - The company is on track to reduce build costs by at least 10% this year despite global supply chain uncertainties [24] Q&A Session Summary Question: Can you elaborate on the incremental efficiencies seen in labor productivity? - Management highlighted improvements in recruiting, retention, and speed of service, attributing success to a new labor model and strong leadership [49][51] Question: What are the implications of the new culinary calendar on advertising and marketing? - The company plans to create awareness at the top of the funnel for limited-time offers and has built an 18-month culinary innovation calendar [61][65] Question: How will the marketing and culinary innovations be margin accretive? - Management indicated that new premium-priced items and operational efficiencies will help mitigate commodity inflation and drive margin growth [77][79] Question: How is the company managing the balance between product innovation and operational efficiency? - The company conducts operational tests on new menu items to ensure they do not disrupt productivity and service quality [104]

Financial Performance Summary [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Shake Shack reported strong Q2 2025 growth, with total revenue up **12.6%** to **$356.5 million** and net income rising to **$18.5 million** Second Quarter 2025 Financial Highlights (in millions USD, except EPS and %) | Financial Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $356.5 | $316.5 (implied) | +12.6% | | System-wide Sales | $549.9 | $483.6 (implied) | +13.7% | | Same-Shack Sales | - | - | +1.8% | | Operating Income | $22.4 | $10.8 | +107.4% | | Restaurant-level Profit | $82.2 | $67.1 (from recon) | +22.5% | | Net Income | $18.5 | $10.4 | +77.9% | | Adjusted EBITDA | $58.9 | $47.2 | +24.8% | | Diluted EPS | $0.41 | $0.23 | +78.3% | | Adj. Pro Forma Diluted EPS | $0.44 | $0.27 | +63.0% | - The company expanded its presence by opening **13** new Company-operated Shacks, including two with drive-thrus, and **9** new licensed Shacks during the quarter[5](index=5&type=chunk) Consolidated Financial Statements [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to **$1.78 billion** as of June 25, 2025, primarily due to property and equipment, with total liabilities at **$1.26 billion** and total equity at **$519.1 million** Condensed Consolidated Balance Sheets (in thousands USD) | Balance Sheet Item | June 25, 2025 | December 25, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $336,804 | $320,714 | | Total current assets | $390,843 | $368,216 | | **Total Assets** | **$1,775,033** | **$1,696,971** | | Total current liabilities | $204,050 | $187,313 | | **Total Liabilities** | **$1,255,969** | **$1,203,345** | | **Total Equity** | **$519,064** | **$493,626** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Total revenue for Q2 2025 increased to **$356.5 million**, with income from operations more than doubling to **$22.4 million** and net income attributable to Shake Shack Inc. reaching **$17.1 million** Condensed Consolidated Statements of Income (Q2, in thousands USD) | Income Statement | 2025 | 2024 | | :--- | :--- | :--- | | Shack Sales | $343,224 | $305,480 | | Licensing Revenue | $13,242 | $11,016 | | **Total Revenue** | **$356,466** | **$316,496** | | Income from Operations | $22,374 | $10,782 | | Net Income | $18,483 | $10,382 | | Net Income Attributable to Shake Shack Inc. | $17,148 | $9,668 | | Diluted EPS | $0.41 | $0.23 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities for the first 26 weeks of 2025 was **$96.2 million**, with **$67.4 million** used in investing and **$12.7 million** in financing, leading to a **$16.1 million** cash increase Condensed Consolidated Statements of Cash Flows (26 Weeks Ended, in thousands USD) | Cash Flow | June 25, 2025 | June 26, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $96,220 | $84,210 | | Net Cash (Used in) Provided by Investing Activities | ($67,438) | $428 | | Net Cash Used in Financing Activities | ($12,689) | ($7,452) | | **Increase in Cash and Cash Equivalents** | **$16,090** | **$77,185** | Non-GAAP Financial Measures and Reconciliations [Restaurant-Level Profit](index=6&type=section&id=Restaurant-Level%20Profit) Restaurant-level profit increased to **$82.2 million** in Q2 2025, with the margin improving to **23.9%** of Shack sales, indicating enhanced individual restaurant profitability - Restaurant-level profit is a non-GAAP measure defined as Shack sales less Shack-level operating expenses (Food and paper, Labor, Other operating, and Occupancy expenses) used to evaluate the performance and profitability of its Shacks[22](index=22&type=chunk)[23](index=23&type=chunk) Restaurant-Level Profit (Q2, in thousands USD) | Restaurant-Level Profit | 2025 | 2024 | | :--- | :--- | :--- | | Income from operations | $22,374 | $10,782 | | **Restaurant-level profit** | **$82,184** | **$67,079** | | Shack sales | $343,224 | $305,480 | | **Restaurant-level profit margin** | **23.9%** | **22.0%** | [EBITDA and Adjusted EBITDA](index=9&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 rose to **$58.9 million**, a **24.8%** increase, with the margin expanding to **16.5%**, reflecting improved operating leverage and profitability - Adjusted EBITDA is a non-GAAP measure that excludes items like equity-based compensation, impairments, and other non-recurring costs from EBITDA to facilitate comparisons of historical performance[29](index=29&type=chunk)[30](index=30&type=chunk) Adjusted EBITDA Reconciliation (Q2, in thousands USD) | Adjusted EBITDA Reconciliation | 2025 | 2024 | | :--- | :--- | :--- | | Net income | $18,483 | $10,382 | | EBITDA | $51,721 | $39,446 | | **Adjusted EBITDA** | **$58,900** | **$47,209** | | **Adjusted EBITDA margin** | **16.5%** | **14.9%** | [Adjusted Pro Forma Net Income](index=11&type=section&id=Adjusted%20Pro%20Forma%20Net%20Income) Adjusted pro forma net income for Q2 2025 was **$19.5 million**, or **$0.44** per diluted share, highlighting strong underlying earnings growth after adjustments - Adjusted pro forma net income is a non-GAAP measure assuming full exchange of LLC interests for Class A common stock, adjusted for non-recurring items to evaluate performance over time and against competitors[37](index=37&type=chunk)[38](index=38&type=chunk) Adjusted Pro Forma Net Income (Q2, in thousands USD) | Adjusted Pro Forma Net Income | 2025 | 2024 | | :--- | :--- | :--- | | Net income attributable to Shake Shack Inc. | $17,148 | $9,668 | | **Adjusted pro forma net income** | **$19,476** | **$12,146** | | **Adjusted pro forma EPS — diluted** | **$0.44** | **$0.27** | Company Overview and Definitions [About Shake Shack](index=2&type=section&id=About%20Shake%20Shack) Shake Shack is a global brand known for its high-quality American classic menu, expanding to over **600** system-wide locations since its 2004 inception - Shake Shack's menu features made-to-order Angus beef burgers, crispy chicken, hand-spun milkshakes, and house-made lemonades[6](index=6&type=chunk) - The company has grown to over **600** locations system-wide, with a presence in **34** U.S. States and international markets such as London, Hong Kong, Shanghai, and Mexico City[6](index=6&type=chunk) [Key Definitions](index=2&type=section&id=Key%20Definitions) This section defines key operating and financial metrics, including Shack sales, System-wide sales, and Same-Shack sales, crucial for understanding company performance - **Shack sales:** Aggregate sales of food, beverages, and merchandise at Company-operated Shacks, excluding licensed locations[8](index=8&type=chunk) - **System-wide sales:** An operating measure consisting of sales from both Company-operated and licensed Shacks[9](index=9&type=chunk) - **Same-Shack sales:** Represents sales for Company-operated Shacks that have been open for **24** full fiscal months or longer[10](index=10&type=chunk)

Core Insights - Shake Shack Inc. (SHAK) is set to report its second-quarter fiscal 2025 results on July 31, with expectations of strong earnings growth and revenue increase compared to the previous year [1][9]. Estimate Revisions - The Zacks Consensus Estimate for fiscal Q2 earnings per share (EPS) is 37 cents, reflecting a 37% increase from 27 cents in the same quarter last year [2]. - Revenue expectations are pegged at $353.8 million, indicating an 11.8% rise from the prior year's figure [2][4]. Factors Influencing Quarterly Results - The company's performance is anticipated to benefit from strategic growth initiatives, including culinary innovation, restaurant efficiency, and enhanced digital and drive-thru capabilities [3]. - New unit development and licensing expansion are expected to contribute positively to system-wide sales [4]. - A robust innovation pipeline, including the Summer Barbecue LTO platform and the Dubai Chocolate Pistachio Shake, is likely to drive customer engagement [5]. Margin Expectations - The fiscal second-quarter restaurant-level margin is projected to be between 23% and 23.5%, representing a year-over-year expansion of 100-150 basis points due to effective cost management [6]. Challenges - Traffic softness in urban markets such as New York City and Los Angeles, along with weather-related disruptions, may have negatively impacted same-Shack sales early in the quarter [7]. - Increased marketing and general & administrative expenses related to digital initiatives, along with inflation in food and paper costs, could pressure margins [7]. Earnings Prediction Model - The current model indicates that Shake Shack may not achieve an earnings beat this quarter, as it has an Earnings ESP of -3.79% and a Zacks Rank of 3 [8][10].

Danny Meyer made a name for himself running upscale NYC restaurants, but it was a hot dog stand he opened in 2001 to raise funds for a public park that led to Shake Shack. (Photo: Todd Williamson via Getty Images for Airbnb)https://t.co/nLzGsxBQ61 https://t.co/f4LXdQigu7 ...

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell even higher, with the expectation that established trends will continue [1][2]. Company Analysis: Shake Shack (SHAK) - Shake Shack currently holds a Momentum Style Score of A, indicating strong momentum characteristics [3]. - The company has a Zacks Rank of 2 (Buy), which is associated with a historical outperformance when combined with a Style Score of A or B [4]. - Over the past week, SHAK shares increased by 2.51%, while the Zacks Retail - Restaurants industry rose by 2.58% [6]. - In a longer timeframe, SHAK shares have appreciated by 68.29% over the past quarter and 65.84% over the last year, significantly outperforming the S&P 500, which increased by 17.01% and 13.4% respectively [7]. - The average 20-day trading volume for SHAK is 1,092,164 shares, indicating a bullish trend when combined with rising stock prices [8]. Earnings Outlook - In the last two months, four earnings estimates for SHAK have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $1.33 to $1.34 [10]. - For the next fiscal year, four estimates have also moved higher without any downward revisions [10]. Conclusion - Given the strong momentum indicators and positive earnings outlook, Shake Shack is positioned as a promising investment opportunity with a Momentum Score of A and a Zacks Rank of 2 (Buy) [12].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Shake Shack (SHAK) - Shake Shack currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating a favorable outlook for the stock [2][3] - The stock has shown significant price performance, with a 7.52% increase over the past week and a 9.3% increase over the past month, outperforming the Zacks Retail - Restaurants industry [5] - Over the last quarter, Shake Shack shares have risen 64.38%, and 57.22% over the past year, significantly outperforming the S&P 500, which increased by 7.91% and 13.53% respectively [6] Trading Volume - The average 20-day trading volume for Shake Shack is 1,223,675 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, 11 earnings estimates for Shake Shack have been revised upwards, while only 1 has been revised downwards, leading to an increase in the consensus estimate from $1.26 to $1.34 [9] - For the next fiscal year, 12 estimates have moved upwards with no downward revisions, indicating a positive earnings outlook [9] Conclusion - Given the strong momentum indicators and positive earnings revisions, Shake Shack is positioned as a promising investment opportunity with a Momentum Score of B and a Zacks Rank of 2 (Buy) [11]

Group 1 - Groupon is one of 209 individual stocks in the Retail-Wholesale sector, which is currently ranked 11 in the Zacks Sector Rank [2] - Groupon has a Zacks Rank of 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - The Zacks Consensus Estimate for Groupon's full-year earnings has increased by 269.6% in the past quarter, reflecting improved analyst sentiment [3] Group 2 - Year-to-date, Groupon's stock has increased by approximately 204%, significantly outperforming the Retail-Wholesale sector's average return of 1.4% [4] - Another outperforming stock in the Retail-Wholesale sector is Shake Shack, which has returned 4.4% year-to-date [4] - Groupon belongs to the Internet - Commerce industry, which includes 38 companies and is currently ranked 96 in the Zacks Industry Rank, with an average gain of 1.8% this year [5] Group 3 - Shake Shack is part of the Retail - Restaurants industry, which consists of 39 stocks and is ranked 150, with a year-to-date decline of -0.4% [6] - Both Groupon and Shake Shack are showing solid performance, making them noteworthy for investors interested in Retail-Wholesale stocks [6]

Industry Overview - The restaurant industry has faced disappointment over the past three months, with industry stocks collectively slipping 2%, while the S&P 500 advanced 5.5% [1] - High costs and sluggish foot traffic continue to pressure margins and momentum within the industry [1] Traffic and Pricing Challenges - A rapid increase in menu prices is the primary reason behind the erosion of customer traffic, leading to challenges in maintaining customer counts as consumers express frustration with rising prices [2] Standout Performers - Despite the overall industry decline, Cracker Barrel Old Country Store, Inc. (CBRL) has increased by 46.2%, Shake Shack Inc. (SHAK) by 41.7%, and Wingstop Inc. (WING) by 62.6% over the same period, driven by brand loyalty, strategic innovation, and investor optimism [3] Company-Specific Insights Cracker Barrel - Cracker Barrel is benefiting from menu innovation, digital initiatives, and strategic remodels, with a 1% increase in comparable-store restaurant sales in the fiscal third quarter, marking the fourth consecutive quarter of positive growth [8] - Earnings estimates for fiscal 2025 and 2026 have risen by 9.9% and 8.4% to $3.10 and $3.48 per share, respectively, indicating strong momentum [9] Shake Shack - Shake Shack's growth is driven by enhanced operations, menu innovation, and store openings, with plans to open 45-50 company-operated Shacks this year [11] - Earnings estimates for 2025 and 2026 have been revised upward by 6.3% and 9.6% to $1.34 and $1.71 per share, respectively [12] Wingstop - Wingstop is experiencing growth from expansion efforts and a new kitchen operating platform, with international expansion becoming a significant growth driver [14] - Earnings estimates for 2025 and 2026 have seen upward revisions of 6.8% and 5% to $3.90 and $5.03 per share, respectively [16] Summary of Opportunities - Cracker Barrel, Shake Shack, and Wingstop are demonstrating strong brand execution and strategic innovation, trading above their 50-day moving averages, indicating solid technical strength [17] - Rising earnings estimates and clear growth strategies position these stocks as compelling opportunities despite a challenging macroeconomic backdrop [18]

Core Viewpoint - Shake Shack (SHAK) has received an upgrade to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, influencing their buying and selling actions, which in turn affects stock prices [4]. Shake Shack's Earnings Outlook - The recent upgrade for Shake Shack reflects an improvement in the company's underlying business, which is expected to drive stock appreciation [5]. - Analysts have raised their earnings estimates for Shake Shack, with the Zacks Consensus Estimate increasing by 3.2% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Shake Shack's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10].