Shake Shack Inc

Previous wording

Same-Shack sales for the thirteen weeks ended June 26, 2024 increased 4.0% compared to the same period last year, driven by a 4.8% increase in price mix partially offset by a 0.8% decline in guest traffic. Same-Shack sales for the twenty-six weeks ended June 26, 2024 increased 2.8% compared to the same period last year, driven by a 4.2% increase in price mix partially offset by a 1.4% decline in guest traffic. For the purpose of calculating same-Shack sales for the thirteen and twenty-six weeks ended June 26, 2024, Shack sales for 228 Shacks were included in the comparable Shack base.

Current wording

Same-Shack sales for the thirteen weeks ended September 25, 2024 increased 4.4% compared to the same period last year, driven by a 4.1% increase in price mix and a 0.3% increase in guest traffic. Same-Shack sales for the thirty-nine weeks ended September 25, 2024 increased 3.4% compared to the same period last year, driven by a 4.2% increase in price mix partially offset by a 0.8% decline in guest traffic. For the purpose of calculating same-Shack sales for the thirteen and thirty-nine weeks ended September 25, 2024, Shack sales for 227 Shacks were included in the comparable Shack base.

Previous wording

Average weekly sales were $77,000 and $75,000, respectively, for the thirteen and twenty-six weeks ended June 26, 2024, which were flat compared to the same periods last year, primarily driven by higher menu prices, partially offset by a decline in guest traffic and menu mix.

Current wording

Average weekly sales were $76,000 for the thirteen weeks ended September 25, 2024, compared to $74,000 for the same period last year, primarily driven by higher menu prices, partially offset by menu mix. Average weekly sales were $75,000 for the thirty-nine weeks ended September 25, 2024, which was flat compared to the same period last year, primarily driven by higher menu prices, partially offset by a decline in guest traffic and menu mix.

Previous wording

System-wide sales for the thirteen weeks ended June 26, 2024 increased 13.5% to $483.7 million compared to the same period last year. System-wide sales for the twenty-six weeks ended June 26, 2024 increased 12.9% to $927.0 million compared to the same period last year.

Current wording

System-wide sales for the thirteen weeks ended September 25, 2024 increased 12.8% to $495.1 million compared to the same period last year. System-wide sales for the thirty-nine weeks ended September 25, 2024 increased 12.9% to $1,422.1 million compared to the same period last year.

Previous wording

Digital sales for the thirteen weeks ended June 26, 2024 increased 20.9% to $105.1 million compared to the same period last year. Digital sales for the twenty-six weeks ended June 26, 2024 increased 18.1% to $208.3 million compared to the same period last year. Digital sales includes orders placed on the Shake Shack app, website and third-party delivery platforms, which represented 34.4% and 35.5%, respectively, of Shack sales during the thirteen and twenty-six weeks ended June 26, 2024.

Current wording

Digital sales for the thirteen weeks ended September 25, 2024 increased 25.4% to $104.3 million compared to the same period last year. Digital sales for the thirty-nine weeks ended September 25, 2024 increased 20.4% to $312.6 million compared to the same period last year. Digital sales includes orders placed on the Shake Shack app, website and third-party delivery platforms, which represented 34.2% and 35.1%, respectively, of Shack sales during the thirteen and thirty-nine weeks ended September 25, 2024.

Previous wording

During the thirteen weeks ended June 26, 2024, we opened 12 new Company-operated Shacks and 11 new licensed Shacks. There was one permanent licensed Shack closure in the second quarter of 2024.

Current wording

During the thirteen weeks ended September 25, 2024, we opened eight new Company-operated Shacks and nine new licensed Shacks. There were nine permanent Company-operated Shack closures and three permanent licensed Shack closures in the third quarter of 2024.

Previous wording

As of June 26, 2024, there were 547 Shacks in operation system-wide, of which 311 were Company-operated Shacks and 236 were licensed Shacks.

Current wording

As of September 25, 2024, there were 552 Shacks in operation system-wide, of which 310 were Company-operated Shacks and 242 were licensed Shacks.

Previous wording

The following table summarizes our results of operations for the thirteen and twenty-six weeks ended June 26, 2024 and June 28, 2023:

Current wording

The following table summarizes our results of operations for the thirteen and thirty-nine weeks ended September 25, 2024 and September 27, 2023:

Previous wording

Shack sales for the twenty-six weeks ended June 26, 2024 increased 15.8% to $586.0 million versus the same period last year. The increase was primarily due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024, which contributed $57.0 million, as well as increased menu prices, which contributed $22.0 million.

Current wording

Shack sales for the thirty-nine weeks ended September 25, 2024 increased 15.5% to $890.9 million versus the same period last year. The increase was primarily due to the opening of 39 new Company-operated Shacks between September 27, 2023 and September 25, 2024, which contributed $72.0 million, as well as increased menu prices, which contributed $47.0 million.

Previous wording

Licensing revenue for the thirteen weeks ended June 26, 2024 increased 10.2% to $11.0 million versus the same period last year. Licensing revenue for the twenty-six weeks ended June 26, 2024 increased 10.2% to $21.0 million versus the same period last year. The increases in Licensing revenue for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to the opening of 35 net new licensed Shacks between June 28, 2023 and June 26, 2024, which contributed $1.3 million and $2.4 million, respectively, as well as higher sales at existing domestic licensed Shacks, partially offset by a decline in sales in China.

Current wording

Licensing revenue for the thirteen weeks ended September 25, 2024 increased 7.1% to $12.0 million versus the same period last year. Licensing revenue for the thirty-nine weeks ended September 25, 2024 increased 9.1% to $33.0 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily due to the opening of 27 net new licensed Shacks between September 27, 2023 and September 25, 2024, which contributed $1.0 million and $1.9 million, respectively, as well as higher sales at existing domestic licensed Shacks.

Previous wording

Food and paper costs for the thirteen weeks ended June 26, 2024 increased 12.2% to $85.1 million versus the same period last year. Food and paper costs for the twenty-six weeks ended June 26, 2024 increased 12.0% to $165.3 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024, which contributed approximately $9.4 million and $17.3 million, respectively.

Current wording

Food and paper costs for the thirteen weeks ended September 25, 2024 increased 11.5% to $86.1 million versus the same period last year. Food and paper costs for the thirty-nine weeks ended September 25, 2024 increased 11.8% to $251.4 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily due to the opening of 39 new Company-operated Shacks between September 27, 2023 and September 25, 2024, which contributed approximately $9.3 million and $21.2 million, respectively.

Previous wording

As a percentage of Shack sales, the decreases in Food and paper costs for the thirteen and twenty-six weeks ended June 26, 2024 were primarily driven by menu price increases partially offset by increases in certain commodity costs, mainly beef and increases in marketing promotions.

Current wording

As a percentage of Shack sales, the decreases in Food and paper costs for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily driven by increased menu prices partially offset by increases in marketing promotions and certain commodity costs, mainly beef and fries.

Previous wording

Labor and related expenses for the thirteen weeks ended June 26, 2024 increased 15.2% to $86.6 million versus the same period last year. Labor and related expenses for the twenty-six weeks ended June 26, 2024 increased 12.5% to $168.1 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024.

Current wording

Labor and related expenses for the thirteen weeks ended September 25, 2024 increased 12.2% to $85.5 million versus the same period last year. Labor and related expenses for the thirty-nine weeks ended September 25, 2024 increased 12.4% to $253.6 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily due to the opening of 39 new Company-operated Shacks between September 27, 2023 and September 25, 2024, which contributed $9.9 million and $23.2 million.

Previous wording

As a percentage of Shack sales, the decreases in Labor and related expenses for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to labor efficiencies and sales leverage partially offset by increased wages and incremental expenses from the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024.

Current wording

As a percentage of Shack sales, the decreases in Labor and related expenses for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily due to labor efficiencies and sales leverage partially offset by increased wages and incremental expenses from the opening of 39 new Company-operated Shacks between September 27, 2023 and September 25, 2024.

Previous wording

Other operating expenses for the thirteen weeks ended June 26, 2024 increased 21.7% to $44.0 million versus the same period last year. Other operating expenses for the twenty-six weeks ended June 26, 2024 increased 20.8% to $85.8 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended June 26, 2024 were primarily driven by increased transaction costs associated with higher sales and higher facilities costs, mainly professional services and utilities, due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024 as well as increased marketing spend.

Current wording

Other operating expenses for the thirteen weeks ended September 25, 2024 increased 22.1% to $45.6 million versus the same period last year. Other operating expenses for the thirty-nine weeks ended September 25, 2024 increased 21.2% to $131.4 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily driven by increased transaction costs associated with higher sales, and higher facilities costs, mainly repair and maintenance and utilities as well as increased marketing spend.

Previous wording

As a percentage of Shack sales, the increases in Other operating expenses for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to increases in marketing spend and delivery commissions associated with higher delivery sales.

Current wording

As a percentage of Shack sales, the increases in Other operating expenses for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily due to increases in delivery commissions associated with higher delivery sales and increases in marketing spend.

Previous wording

Occupancy and related expenses for the thirteen weeks ended June 26, 2024 increased 17.3% to $23.2 million versus the same period last year. Occupancy and related expenses for the twenty-six weeks ended June 26, 2024 increased 18.3% to $45.4 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024.

Current wording

Occupancy and related expenses for the thirteen weeks ended September 25, 2024 increased 16.3% to $23.6 million versus the same period last year. Occupancy and related expenses for the thirty-nine weeks ended September 25, 2024 increased 17.6% to $69.0 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily due to the opening of 39 new Company-operated Shacks between September 27, 2023 and September 25, 2024.

Previous wording

As a percentage of Shack sales, Occupancy and related expenses was flat for the thirteen weeks ended June 26, 2024 primarily driven by higher base rent offset by sales leverage. As a percentage of Shack sales, the increase in Occupancy and related expenses for the twenty-six weeks ended June 26, 2024 was primarily due to higher base rent and variable rent.

Current wording

As a percentage of Shack sales, Occupancy and related expenses was flat for the thirteen weeks ended September 25, 2024 primarily driven by higher base rent offset by sales leverage. As a percentage of Shack sales, the increase in Occupancy and related expenses for the thirty-nine weeks ended September 25, 2024 was primarily due to higher base rent and occupancy taxes.

Previous wording

General and administrative expenses for the thirteen weeks ended June 26, 2024 increased 15.4% to $36.3 million versus the same period last year. General and administrative expenses for the twenty-six weeks ended June 26, 2024 increased 15.1% to $72.3 million versus the same period last year. The increase in General and administrative expenses for the thirteen weeks ended June 26, 2024 was primarily due to increased investments in marketing as well as increases in wages and other team costs to support our Shack growth. The increase in General and administrative expenses for the twenty-six weeks ended June 26, 2024 was primarily due to the aforementioned items as well as costs related to the prior restatement of prior periods included in the fiscal 2023 Form 10-K and investments in technology initiatives.

Current wording

General and administrative expenses for the thirteen weeks ended September 25, 2024 increased 15.4% to $35.7 million versus the same period last year. The increase was primarily due to increases in wages and other team costs to support our Shack growth, increased investments in marketing as well as professional fees related to non-recurring matters.

Previous wording

As a percentage of Total revenue, the decreases in General and administrative expenses for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to sales leverage partially offset by the aforementioned items.

Current wording

As a percentage of Total revenue, the increase in General and administrative expenses for the thirteen weeks ended September 25, 2024 was primarily due to the aforementioned items partially offset by sales leverage. As a percentage of Total revenue, General and administrative expenses was flat for the thirty-nine weeks ended September 25, 2024 primarily due to sales leverage partially offset by the aforementioned items.

Previous wording

Depreciation and amortization expense for the thirteen weeks ended June 26, 2024 increased 14.6% to $25.5 million versus the same period last year. Depreciation and amortization expense for the twenty-six weeks ended June 26, 2024 increased 16.9% to $50.9 million versus the same period last year. The increases in Depreciation and amortization expense for the thirteen and twenty-six weeks ended June 26, 2024 were predominantly due to incremental depreciation of capital expenditures related to the opening of 41 new Company-operated Shacks and technology projects placed into service between June 28, 2023 and June 26, 2024.

Current wording

Depreciation and amortization expense for the thirteen weeks ended September 25, 2024 increased 11.2% to $25.7 million versus the same period last year. The increase was primarily due to incremental depreciation of capital expenditures related to the opening of 39 new Company-operated Shacks between September 27, 2023 and September 25, 2024.

Previous wording

Pre-opening costs for the thirteen weeks ended June 26, 2024 decreased 28.0% to $4.0 million versus the same period last year. Pre-opening costs for the twenty-six weeks ended June 26, 2024 decreased 25.9% to $6.8 million versus the same period last year. The decreases in Pre-opening costs for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to reductions in wages and team costs as we standardize the training process for unopened Shacks.

Current wording

Pre-opening costs for the thirteen weeks ended September 25, 2024 decreased 26.3% to $3.7 million versus the same period last year. Pre-opening costs for the thirty-nine weeks ended September 25, 2024 decreased 26.1% to $10.4 million versus the same period last year. The decreases for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily due to reductions in wages and team costs as we standardize the training process for unopened Shacks as well as reductions in legal costs compared to the prior year period.

Previous wording

Impairment and loss on disposal of assets primarily consists of impairment charges related to our long-lived assets, which includes property and equipment, as well as operating and finance lease assets. Additionally, Impairment and loss on disposal of assets includes the net book value of assets that have been retired which primarily consists of furniture, equipment and fixtures that were replaced in the normal course of business.

Current wording

Impairments, loss on disposal of assets, and Shack closures primarily consists of the net book value of assets that have been retired which primarily consists of furniture, equipment and fixtures that were replaced in the normal course of business; impairment charges related to our long-lived assets, which includes property and equipment, as well as operating and finance lease assets; and miscellaneous Shack closure expenses, including employee-related costs, cleaning, and sign removal costs.

Previous wording

Other income, net for the thirteen weeks ended June 26, 2024 increased to $3.3 million from $3.2 million. Other income, net for the twenty-six weeks ended June 26, 2024 increased to $6.5 million from $6.1 million. The increases in Other income, net for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to an increase in interest income from investments.

Current wording

Other income, net for the thirteen weeks ended September 25, 2024 increased to $3.5 million from $3.4 million. Other income, net for the thirty-nine weeks ended September 25, 2024 increased to $10.0 million from $9.5 million. The increases for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily due to increases in income from investments.

Previous wording

Interest expense for the thirteen weeks ended June 26, 2024 increased 30.1% to $0.5 million versus the same period last year. Interest expense for the twenty-six weeks ended June 26, 2024 increased 28.1% to $1.0 million versus the same period last year. The increases in Interest expense for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to increased finance lease charges from the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024.

Current wording

Interest expense for the thirteen weeks ended September 25, 2024 increased 15.0% to $0.5 million versus the same period last year. The increase for the thirteen weeks ended September 25, 2024 was primarily due to increased finance lease charges from the opening of 39 new Company-operated Shacks between September 27, 2023 and September 25, 2024 as well as an increase in various sales tax audit assessment charges.

Previous wording

We are the sole managing member of SSE Holdings and, as a result, consolidate the financial results of SSE Holdings. SSE Holdings is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, SSE Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by SSE Holdings is passed through to and included in the taxable income or loss of its members, including us, on a pro rata basis. We are subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of SSE Holdings, as well as any stand-alone income or loss generated by us. We are also subject to withholding taxes in foreign jurisdictions.

Current wording

We are the sole managing member of SSE Holdings and, as a result, consolidate the financial results of SSE Holdings. SSE Holdings is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, SSE Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by SSE Holdings is passed through to and included in the taxable income or loss of its members, including us, on a pro rata basis.

Previous wording

Our effective income tax rates for the thirteen weeks ended June 26, 2024 and June 28, 2023 were 23.4% and 4.6%, respectively. Our effective income tax rates for the twenty-six weeks ended June 26, 2024 and June 28, 2023 were 22.7% and 17.8%, respectively. The increases were primarily driven by increases in pre-tax income compared to the same periods last year. The Company's ownership interest in SSE Holdings is directly related to its share of the taxable income of SSE Holdings. Our weighted average ownership interest in SSE Holdings was 93.7% and 93.3%, respectively, for the thirteen weeks ended June 26, 2024 and June 28, 2023, and 93.5% and 93.3%, respectively, for the twenty-six weeks ended June 26, 2024 and June 28, 2023. These increases in the Company's ownership interest in SSE Holdings LLC increased its share of the taxable income of SSE Holdings.

Current wording

Our effective income tax rates for the thirteen weeks ended September 25, 2024 and September 27, 2023 were 25.9% and 6.1%, respectively. The increase was primarily driven by a decline in pre-tax income and consistent non-deductible expenses, which together contributed to the higher effective rate. Our effective income tax rates for the thirty-nine weeks ended September 25, 2024 and September 27, 2023 were (13.9)% and 11.3%, respectively. The decrease was primarily driven by a decline in pre-tax income (loss) and higher tax credits applied against our estimated income tax liability, leading to a year-to-date tax benefit. The Company's ownership interest in SSE Holdings is directly related to its share of the taxable income of SSE Holdings. Our weighted average ownership interest in SSE Holdings was 94.2% and 93.3%, respectively, for the thirteen weeks ended September 25, 2024 and September 27, 2023, and 93.7% and 93.3%, respectively, for the thirty-nine weeks ended September 25, 2024 and September 27, 2023. These increases in the Company's ownership interest in SSE Holdings LLC increased its share of the taxable income (loss) of SSE Holdings.

Previous wording

We are the sole managing member of SSE Holdings and have the sole voting power in, and control the management of, SSE Holdings. Accordingly, we consolidate the financial results of SSE Holdings and report a non-controlling interest on our Condensed Consolidated Statements of Income, representing the portion of net income attributable to the other members of SSE Holdings. The Third Amended and Restated Limited Liability Company Agreement of SSE Holdings provides that holders of LLC Interests may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one-for-one basis. In connection with any redemption or exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in SSE Holdings. The weighted average ownership percentages for the applicable reporting periods are used to attribute net income and other comprehensive income to Shake Shack Inc. and the non-controlling interest holders.

Current wording

We are the sole managing member of SSE Holdings and have the sole voting power in, and control the management of, SSE Holdings. Accordingly, we consolidate the financial results of SSE Holdings and report a non-controlling interest on our Condensed Consolidated Statements of Income (Loss), representing the portion of net income (loss) attributable to the other members of SSE Holdings. The Third Amended and Restated Limited Liability Company Agreement of SSE Holdings provides that holders of LLC Interests may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one-for-one basis. In connection with any redemption or exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in SSE Holdings. The weighted average ownership percentages for the applicable reporting periods are used to attribute net income (loss) and other comprehensive income (loss) to Shake Shack Inc. and the non-controlling interest holders.

Previous wording

Net income attributable to non-controlling interests for the thirteen weeks ended June 26, 2024 increased to $0.7 million from $0.3 million in the same period last year. Net income attributable to non-controlling interests for the twenty-six weeks ended June 26, 2024 increased to $0.9 million from $0.2 million in the same period last year. The increases in Net income attributable to non-controlling interests for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to increases in net results compared to the same periods last year, partially offset by a decrease in the non-controlling interest holders' weighted average ownership, which was 6.3% and 6.5%, respectively, for the thirteen and twenty-six weeks ended June 26, 2024 and 6.7% for the thirteen and twenty-six weeks ended June 28, 2023.

Current wording

Net income (loss) attributable to non-controlling interests for the thirteen weeks ended September 25, 2024 declined to a loss of $0.9 million from income of $0.5 million in the same period last year. Net income (loss) attributable to non-controlling interests for the thirty-nine weeks ended September 25, 2024 declined to nil from $0.7 million in the same period last year. The declines in Net income (loss) attributable to non-controlling interests for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily due to decreases in net results compared to the same periods last year, partially offset by a decrease in the non-controlling interest holders' weighted average ownership, which was 5.8% and 6.3%, respectively, for the thirteen and thirty-nine weeks ended September 25, 2024 and 6.7% for the thirteen and thirty-nine weeks ended September 27, 2023.

Previous wording

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 our Shacks. Therefore, this measure may not provide a complete understanding of the operating results of our Company as a whole and Restaurant-level profit and Restaurant-level profit margin should be reviewed in conjunction with our GAAP financial results. A reconciliation of Restaurant-level profit to Income from operations, the most directly comparable GAAP financial measure, is as follows.

Current wording

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 our Shacks. Therefore, this measure may not provide a complete understanding of the operating results of our Company as a whole and Restaurant-level profit and Restaurant-level profit margin should be reviewed in conjunction with our GAAP financial results. A reconciliation of Restaurant-level profit to Income (loss) from operations, the most directly comparable GAAP financial measure, is as follows.

Previous wording

EBITDA is defined as Net income before Interest expense (net of interest income), Income tax expense and Depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA (as defined above) excluding equity-based compensation expense, Impairment and loss on disposal of assets, amortization of cloud-based software implementation costs, as well as certain non-recurring items that we do not believe directly reflect our core operations and may not be indicative of our recurring business operations.

Current wording

EBITDA is defined as Net income (loss) before Interest expense (net of interest income), Income tax expense (benefit) and Depreciation and amortization expense. Adjusted EBITDA 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 we do not believe directly reflect our core operations and may not be indicative of our recurring business operations.

Previous wording

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 our performance and should be reviewed in conjunction with our GAAP financial measures. A reconciliation of EBITDA and adjusted EBITDA to Net income, the most directly comparable GAAP measure, is as follows.

Current wording

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 our performance and should be reviewed in conjunction with our GAAP financial measures. A reconciliation of EBITDA and adjusted EBITDA to Net income (loss), the most directly comparable GAAP measure, is as follows.

Previous wording

(5)Calculated as a percentage of Total revenue, which was $316.5 million and $607.0 million for the thirteen and twenty-six weeks ended June 26, 2024, respectively, and $271.8 million and $525.1 million for the thirteen and twenty-six weeks ended June 28, 2023, respectively.

Current wording

(5)Calculated as a percentage of Total revenue, which was $316.9 million and $923.9 million for the thirteen and thirty-nine weeks ended September 25, 2024, respectively, and $276.2 million and $801.3 million for the thirteen and thirty-nine weeks ended September 27, 2023, respectively.

Previous wording

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 we do not believe are directly related to our core operations and may not be indicative of our 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.

Current wording

Adjusted pro forma net income represents Net income (loss) 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 we do not believe are directly related to our core operations and may not be indicative of our 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.

Previous wording

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 we believe are useful measures to evaluate our performance period over period and relative to our competitors. By assuming the full exchange of all outstanding LLC Interests, we believe 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 our ownership of SSE Holdings, which are unrelated to our operating performance, and excludes items that are non-recurring or may not be indicative of our ongoing operating performance.

Current wording

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 we believe are useful measures to evaluate our performance period over period and relative to our competitors. By assuming the full exchange of all outstanding LLC Interests, we believe 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 (loss) attributable to Shake Shack Inc. driven by increases in our ownership of SSE Holdings, which are unrelated to our operating performance, and excludes items that are non-recurring or may not be indicative of our ongoing operating performance.

Previous wording

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 our performance, they do not account for the earnings attributable to the non-controlling interest holders and therefore do 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 our GAAP financial results. A

Current wording

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 (loss) and earnings (loss) per share, as determined under GAAP. While these measures are useful in evaluating our performance, they do not account for the earnings attributable to the non-controlling interest holders and therefore do not provide a complete understanding of the Net income (loss) 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 our GAAP financial results. A reconciliation of adjusted pro forma net income to Net income (loss) 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.

Previous wording

38 |Shake Shack Inc. Form 10-Q 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.

Current wording

38 |Shake Shack Inc. Form 10-Q

Previous wording

(2)Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.

Current wording

(3)Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.

Previous wording

(4)Expenses incurred for professional fees related to non-recurring matters.

Current wording

(5)Expenses incurred for professional fees related to non-recurring matters.

Previous wording

(5)Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 24.1% and 18.4% for the thirteen and twenty-six weeks ended June 26, 2024, respectively, and 14.9% and 25.1% for the thirteen and twenty-six weeks ended June 28, 2023, 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.

Current wording

(6)Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 20.4% and 19.2% for the thirteen and thirty-nine weeks ended September 25, 2024, respectively, and 15.1% and 20.5% for the thirteen and thirty-nine weeks ended September 27, 2023, 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.

Previous wording

(6)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.

Current wording

(7)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.