Financial Data and Key Metrics Changes - Total revenue in Q2 2021 was $187.5 million, up 104% year-over-year, marking the highest revenue quarter ever for the company [9][20] - Shack sales were $181.5 million, reflecting a year-over-year growth of 102.7% [20] - Shack level margin improved to 19.2% in Q2, a 420 basis-point increase from the first quarter [10][30] Business Line Data and Key Metrics Changes - Same Shack sales increased by 52.7% year-over-year in Q2, with traffic growing 61.5% year-over-year [22][27] - Digital sales accounted for 47% of Shack sales in Q2, with a retention rate of approximately 80% [27][28] - The company opened 20 domestic company-operated Shacks in 2021 and plans to open 15 to 18 more by year-end [11][12] Market Data and Key Metrics Changes - Urban markets showed signs of recovery, with same Shack sales down only 9% compared to July 2019 levels [9][24] - The Southeast region, particularly Texas, reported same Shack sales above 2019 levels, indicating strong market performance [26] - Licensed business saw a strong uptick in sales, with weekly sales performance increasing from $6.6 million in April to $8.7 million in July [13][14] Company Strategy and Development Direction - The company is focusing on the evolution of Shack formats through physical and digital transformation to enhance guest experience [10] - Plans to open drive-thru locations and Shack Track walk-up windows are part of the strategic investment in new formats [11][12] - The company is committed to investing $10 million in team members for wage increases and leadership development [7][19] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the ongoing COVID situation but is encouraged by the current momentum in sales recovery [9][39] - The company expects to see continued growth in both urban and suburban markets, with a focus on digital sales and new Shack openings [29][30] - Management believes that investments in team members and innovation will position the company for stronger recovery and growth [39][40] Other Important Information - The company plans to raise menu prices by 3% to 3.5% in Q4 to counter inflationary pressures [33] - G&A expenses for 2021 are slightly raised to between $86 million and $88 million to support growth initiatives [36] - The balance sheet remains strong, ending the quarter with $420.2 million in cash and marketable securities [38] Q&A Session Summary Question: Importance of maintaining positive sales gap for new Shacks - Management acknowledges the importance of maintaining the positive sales gap and highlights the mix of suburban and urban locations contributing to strong performance [42][43] Question: Details on the $10 million investment in team members - Management confirms that a significant portion of the investment will be loaded in the back half of the year, focusing on wage increases and retention bonuses [45][46] Question: Managing elevated construction costs - Management emphasizes the long-term vision for building Shacks and the importance of investing in new formats despite current cost pressures [48][50] Question: Recovery rates of new unit classes - Management indicates that it is too early to provide reliable comparisons for recovery rates of new unit classes due to COVID impacts [65][66]

Financial Data and Key Metrics Changes - Total revenue for Q1 2021 was $155.3 million, an increase of 8.5% year-on-year, with Shack sales at $150.7 million, growing 9.1% year-on-year [8][23] - Average weekly sales improved to $64,000 compared to $62,000 in Q4 2020, with March average weekly sales at $68,000 and $69,000 in fiscal April [8][24] - Shack-level margin was 15% for Q1, improving to just under 19% by the end of March [9][31] Business Line Data and Key Metrics Changes - Same-Shack sales increased by 5.7% in Q1 and surged by 86% in fiscal April compared to 2020 [9][25] - Average weekly sales for the 2021 class of Shacks opened was over $79,000, significantly higher than the system average [12] - The company opened 10 domestic company-operated Shacks in Q1 and plans to open between 35 and 40 new Shacks in 2021 [10][11] Market Data and Key Metrics Changes - Suburban Shacks showed a nearly flat performance compared to 2019, while urban Shacks were down 25% in March and 27% in April compared to 2019 [27][28] - Internationally, the company opened two new Shacks in the Middle East and six additional openings in Asia during Q1 [13][15] - The UK Shacks began reopening as lockdown restrictions eased, and Shacks in China experienced strong sales [15] Company Strategy and Development Direction - The company is focused on opening and operating new Shacks while enhancing digital transformation and guest experience [10] - Plans to test drive-throughs with potential for up to eight locations by 2022, indicating a shift towards more convenient service options [12] - The company aims to expand its license operations significantly, targeting 15 to 20 new license Shacks in 2021 and 20 to 25 in 2022 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovery trends as COVID restrictions ease, with a focus on rebuilding in-Shack sales [7][28] - The company anticipates total revenue for Q2 to be between $174 million and $183 million, with same-Shack sales expected to increase in the mid-40s to 50% range [29] - Management acknowledged challenges in urban markets, particularly in high-volume areas, but remains confident in the overall recovery trajectory [28][70] Other Important Information - The company launched a new limited-time menu and is focusing on enhancing its beverage offerings, which have seen increased sales [19][20] - The company published its annual Stand For Something Good report, outlining ESG priorities and diversity goals [21] - Tara Comonte, the President and CFO, announced her departure, with a search for her replacement underway [38][39] Q&A Session Summary Question: Store openings and comp base normalization - Management noted that new Shacks opened at an average of $79,000 weekly, indicating strong performance despite pandemic challenges [43][44] Question: Labor environment and hiring challenges - Management acknowledged staffing challenges but reported no material impact on operations, emphasizing their commitment to investing in team members [49][50] Question: Urban Shack performance and sales deceleration - Management explained that slight deceleration in urban sales is due to a small comp base and specific Shack closures impacting overall performance [51][52] Question: Q2 comp guidance and average weekly sales - Management refrained from breaking down guidance further, citing high uncertainty in the current operating environment [58] Question: Confidence in growth and site openings - Management expressed confidence in site availability and brand strength, while also noting potential cost inflation in construction materials [76][77]

Shake Shack, Inc. (NYSE:SHAK) Q4 2020 Earnings Conference Call February 25, 2021 5:00 PM ET Company Participants Rik Powell - SVP, Finance Randall Garutti - CEO & Director Tara Comonte - President & CFO Conference Call Participants Lauren Silberman - Crédit Suisse Jared Garber - Goldman Sachs Group Michael Tamas - Oppenheimer John Glass - Morgan Stanley John Ivankoe - JPMorgan Chase & Co. Christopher O'Cull - Stifel, Nicolaus & Company Jeffrey Bernstein - Barclays Bank Andrew Charles - Cowen and Company Bri ...