Shake Shack(SHAK)2025-05-01 20:05Sales Performance - Same-Shack sales for the thirteen weeks ended March 26, 2025 increased by 0.2% year-over-year, driven by a 4.8% increase in price mix, offset by a 4.6% decline in guest traffic [102]. - Average weekly sales were $72,000 for the thirteen weeks ended March 26, 2025, a decrease from $73,000 in the same period last year, primarily due to a decline in guest traffic [103]. - System-wide sales for the thirteen weeks ended March 26, 2025 increased by 10.4% to $489.4 million compared to the same period last year [103]. - Digital sales increased by 14.3% to $118.0 million, representing 38.1% of Shack sales during the thirteen weeks ended March 26, 2025 [104]. - Shack sales for the thirteen weeks ended March 26, 2025 increased by 10.4% to $309.8 million, primarily due to the opening of 43 new Company-operated Shacks [109]. - Licensing revenue for the thirteen weeks ended March 26, 2025 increased by 11.1% to $11.1 million, attributed to the opening of 30 net new licensed Shacks [112]. Expenses and Costs - Food and paper costs increased by 7.2% to $86.0 million, primarily due to the opening of new Shacks, despite a decrease in the percentage of Shack sales to 27.8% [114]. - Labor and related expenses increased by 6.3% to $86.7 million, influenced by the opening of new Shacks, with a decrease in the percentage of Shack sales to 28.0% [117]. - Other operating expenses increased by 15.3% to $48.3 million for the thirteen weeks ended March 26, 2025, compared to the same period last year, primarily due to higher transaction costs and increased marketing spend [121]. - Occupancy and related expenses rose by 11.0% to $24.6 million, attributed to the opening of 43 new Company-operated Shacks, contributing approximately $2.7 million [124]. - General and administrative expenses increased by 13.1% to $40.6 million, driven by higher marketing investments and increased wages to support Shack growth [128]. - Depreciation and amortization expense grew by 4.3% to $26.5 million, mainly due to incremental depreciation from the opening of new Shacks [131]. - Pre-opening costs increased by 16.9% to $3.2 million, primarily due to higher legal costs associated with accelerating development pipelines [134]. - Impairments, loss on disposal of assets, and Shack closures surged by 291.1% to $2.1 million, largely due to expenses related to the closure of nine Company-operated Shacks [136]. Income and Profitability - The net income attributable to Shake Shack Inc. for the thirteen weeks ended March 26, 2025 was $4.245 million, compared to $2.040 million in the same period last year [107]. - Total revenue for the thirteen weeks ended March 26, 2025, was $320.9 million, an increase from $290.5 million for the same period in 2024, representing a growth of 10.4% [150]. - Restaurant-level profit for the same period was $64.2 million, up from $54.7 million in 2024, reflecting a year-over-year increase of 17.1% [150]. - Restaurant-level profit margin improved to 20.7% compared to 19.5% in the prior year, indicating enhanced operational efficiency [150]. - Net income for the thirteen weeks ended March 26, 2025, was $4.5 million, compared to $2.2 million in 2024, marking a significant increase of 103.6% [155]. - Adjusted EBITDA for the period was $40.7 million, up from $35.9 million in 2024, which is an increase of 13.5% [155]. Cash Flow and Financial Position - Cash and cash equivalents at the end of the period stood at $312.9 million, a decrease from $320.7 million at the beginning of the period [172]. - Net cash provided by operating activities was $31.2 million, slightly up from $30.7 million in the previous year [172]. - The company reported net cash used in investing activities of $29.4 million, compared to a net cash provided of $11.3 million in 2024 [172]. - The adjusted pro forma earnings per fully exchanged share for the period was $0.14, compared to $0.13 in 2024, reflecting a growth of 7.7% [161]. - Net cash used in financing activities increased to $9.7 million from $6.4 million, primarily due to higher withholding taxes related to net settled equity awards [175]. Debt and Obligations - The company issued $250.0 million in 0% Convertible Senior Notes due 2028, which can be converted into cash, shares of Class A common stock, or a combination thereof [176]. - The Revolving Credit Facility allows borrowings up to $50.0 million, with the potential to increase by an additional $100.0 million, maturing in March 2026 [177]. - As of March 26, 2025, there were no amounts outstanding under the Revolving Credit Facility, which requires compliance with maximum net lease adjusted leverage and minimum fixed charge coverage ratios [178][180]. - Material contractual obligations include operating and finance lease obligations, long-term debt, and purchase obligations, with most due within the next 12 months [181][183]. Market Risks - The company has not experienced material changes in exposure to market risks as described in the previous annual report [186].