Financial Data and Key Metrics Changes - Total revenue increased by 15.9% year over year to $367.4 million, driven by strong new shack openings and growth in the comp shack base [25][26] - Adjusted EBITDA grew by 18.2% year over year to $54.1 million, representing 14.7% of total revenue [33] - Net income attributable to Shake Shack Inc. was $12.5 million, or $0.30 per diluted share [33] Business Line Data and Key Metrics Changes - Company-operated shack sales increased by 15.7% year over year to $352.8 million [25] - Licensing revenue grew by 21.1% year over year to approximately $14.6 million, with license sales up by 15% to $218.7 million [25][26] - Average weekly sales rose by 2.6% year over year to $78,000 [26] Market Data and Key Metrics Changes - Positive same-shack sales growth was recorded for the 19th consecutive quarter, with a 4.9% increase in same-shack sales [25][26] - Traffic grew by 1.3% in the quarter, with positive comps in nearly all regions, although macro pressures were noted in New York Metro and Washington, D.C. [26][27] Company Strategy and Development Direction - The company is focused on building a resilient long-term business through strategic investments and operational improvements [3][4] - Plans to open 55 to 60 new shacks in 2026, with a strong pipeline of new openings [20][25] - Emphasis on culinary innovation and enhancing the guest experience through improved operational practices and supply chain strategies [12][15][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic pressures but expressed confidence in the company's ability to navigate challenges and continue growth [24][39] - The company is committed to maintaining quality while diversifying suppliers to mitigate risks associated with beef inflation [13][41] - Future expectations include a low single-digit net impact on food and paper costs despite anticipated mid-teens beef inflation [31][41] Other Important Information - The company has seen improvements in guest satisfaction metrics, including speed of service, which decreased from approximately seven minutes in 2023 to about five minutes and 50 seconds [11][55] - Significant investments in marketing and media are planned to drive traffic and sales, with a focus on balancing premium offerings with value [61][70] Q&A Session Summary Question: Can you elaborate on supply chain initiatives as a driver of margin expansion? - Management confirmed that there will be no product modifications and emphasized the commitment to maintaining quality standards with new suppliers [40] - Expected cost savings from supply chain strategies are anticipated to grow into next year, with a moderation of food and paper costs as a percentage of sales [41][42] Question: What are the pressures on younger consumers and spending trends? - Management noted pressures on lower-income consumers and younger populations, leading to a shift towards value offerings [43][44] - The company has seen significant growth in app traffic and sales by leveraging in-app value platforms [45][46] Question: How does the company plan to balance premium and value offerings? - Management stated that pricing power exists, and the focus will be on keeping core menu prices low while allowing for premium innovations to drive check growth [69][70]