Shake Shack Inc

Previous wording

This section and other parts of this Quarterly Report on Form 10-Q ("Form 10-Q") contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"), which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical fact are forward-looking statements including, but not limited to, statements about the Company's growth, strategic plan, and liquidity. Forward-looking statements discuss our current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim," "anticipate," "believe," "estimate," "expect," "forecast," "future," "intend," "likely," "outlook," "potential," "project," "projection," "plan," "seek," "may," "could," "would," "will," "should," "can," "can have," the negatives thereof and other similar expressions.

Current wording

This section and other parts of this Quarterly Report on Form 10-Q ("Form 10-Q") contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical fact are forward-looking statements including, but not limited to, statements about our growth, including our long-term growth goals, strategic priorities and initiatives, and liquidity. Forward-looking statements discuss our current expectations, targets and projections relating to our financial position, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim," "anticipate," "believe," "estimate," "expect," "forecast," "future," "intend," "likely," "outlook," "potential," "preliminary," "project," "projection," "plan," "seek," "targets," "may," "could," "would," "will," "should," "can," "can have," the negatives thereof and other similar expressions.

Previous wording

All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this Form 10-Q in the context of the risks and uncertainties disclosed in our Annual Report on Form 10-K for the fiscal year ended December 27, 2023 ("2023 Form 10-K").

Current wording

Forward-looking statements reflect our current views with respect to future events and are based on certain assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from trends, plans, or expectations set forth in the forward-looking statement, as set forth in this Form 10-Q. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this Form 10-Q in the context of the risks and uncertainties disclosed in our Annual Report on Form 10-K for the fiscal year ended December 25, 2024 ("2024 Form 10-K") and our other filings with the SEC.

Previous wording

The forward-looking statements included in this Form 10-Q are made only as of the date hereof. We undertake no obligation to publicly update any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.

Current wording

The forward-looking statements included in this Form 10-Q are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.

Previous wording

Our mission is to Stand For Something Good in all aspects of our business, including the talented team we hire and train, the premium ingredients making up our menu, our community engagement and the design of our Shacks. Stand For Something Good is a call to action for all of our stakeholders — our team, guests, communities, suppliers and investors — and we actively invite them all to share in this philosophy with us. This commitment drives our integration into the local communities in which we operate and fosters a deep and lasting connection with our guests.

Current wording

Our purpose is to Stand For Something Good in all aspects of our business. Stand For Something Good is a call to action for all of our stakeholders — our team, guests, communities, suppliers and investors — and we actively invite them all to share in this philosophy with us. This commitment drives our integration into the local communities in which we operate and fosters a deep and lasting connection with our guests. We are committed to a positive social impact, creating an equitable and inclusive workplace and community and focusing on environmental sustainability.

Previous 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.

Current wording

Same-Shack sales for the thirteen weeks ended March 26, 2025 increased 0.2% compared to the same period last year, driven by a 4.8% increase in price mix, partially offset by a 4.6% decline in guest traffic. The decline in guest traffic was primarily related to weather, the LA wildfires, and broader macroeconomic pressures. For the purpose of calculating same-Shack sales for the thirteen weeks ended March 26, 2025, Shack sales for 250 Shacks were included in the comparable Shack base.

Previous 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.

Current wording

Average weekly sales were $72,000 for the thirteen weeks ended March 26, 2025, compared to $73,000 for the same period last year, primarily driven by a decline in guest traffic, partially offset by higher menu prices and the closure of nine underperforming Company-operated Shacks in the third quarter of fiscal 2024.

Previous 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.

Current wording

Digital sales for the thirteen weeks ended March 26, 2025 increased 14.3% to $118.0 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 38.1% of Shack sales during the thirteen weeks ended March 26, 2025.

Previous 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.

Current wording

During the thirteen weeks ended March 26, 2025, we opened four new Company-operated Shacks and seven new licensed Shacks. There was one permanent licensed Shack closure in the first quarter of 2025.

Previous 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.

Current wording

As of March 26, 2025, there were 589 Shacks in operation system wide, of which 333 were Company-operated Shacks and 256 were licensed Shacks.

Previous wording

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

Current wording

The following table summarizes our results of operations for the thirteen weeks ended March 26, 2025 and March 27, 2024:

Previous 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.

Current wording

Shack sales for the thirteen weeks ended March 26, 2025 increased 10.4% to $309.8 million versus the same period last year. The increase was primarily due to the opening of 43 new Company-operated Shacks between March 27, 2024 and March 26, 2025 which contributed $36.0 million as well as increased menu prices, partially offset by a decline in guest traffic and the impact from the closure of nine Company-operated Shacks in fiscal 2024.

Previous wording

Food and paper costs include the direct costs associated with food, beverage and packaging of our menu items. The components of Food and paper costs are variable by nature, change with sales volume, impacted by menu mix, channel mix and fluctuations in commodity costs, as well as geographic scale and proximity.

Current wording

Food and paper costs include the direct costs associated with food, beverage and packaging of our menu items. The components of Food and paper costs are variable by nature, change with sales volume, and are impacted by menu mix, channel mix and fluctuations in commodity costs, as well as geographic scale and proximity.

Previous 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.

Current wording

Food and paper costs for the thirteen weeks ended March 26, 2025 increased 7.2% to $86.0 million versus the same period last year. The increase was primarily due to the opening of 43 new Company-operated Shacks between March 27, 2024 and March 26, 2025, which contributed approximately $10.1 million, partially offset by the closure of nine Company-operated Shacks in fiscal 2024.

Previous 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.

Current wording

As a percentage of Shack sales, the decrease in Food and paper costs for the thirteen weeks ended March 26, 2025 was primarily driven by increased menu prices partially offset by increased commodity costs, specifically beef.

Previous 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.

Current wording

As a percentage of Shack sales, the decrease in Labor and related expenses for the thirteen weeks ended March 26, 2025 was primarily due to labor efficiencies partially offset by increased wages and incremental expenses from the opening of 43 new Company-operated Shacks between March 27, 2024 and March 26, 2025.

Previous 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.

Current wording

Other operating expenses for the thirteen weeks ended March 26, 2025 increased 15.3% to $48.3 million versus the same period last year. The increase was primarily driven by increased transaction costs associated with higher sales, increased marketing spend, as well as higher facilities costs, mainly professional services.

Previous 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.

Current wording

As a percentage of Shack sales, the increase in Other operating expenses for the thirteen weeks ended March 26, 2025 was primarily due to increased marketing spend and delivery commissions associated with higher delivery sales.

Previous 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.

Current wording

As a percentage of Shack sales, Occupancy and related expenses was flat for the thirteen weeks ended March 26, 2025.

Previous 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.

Current wording

General and administrative expenses for the thirteen weeks ended March 26, 2025 increased 13.1% to $40.6 million versus the same period last year. The increase was primarily due to increased investments in marketing as well as increased wages and other team costs to support our Shack growth and strategic initiatives, partially offset by the absence of costs associated with the restatement of prior periods included in the fiscal 2023 Form 10-K and professional fees related to non-recurring matters.

Previous 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.

Current wording

As a percentage of Total revenue, the increase in General and administrative expenses for the thirteen weeks ended March 26, 2025 was primarily due to the aforementioned items and higher legal expenses compared to the prior year period, as well as sales deleverage.

Previous 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.

Current wording

Depreciation and amortization expense for the thirteen weeks ended March 26, 2025 increased 4.3% to $26.5 million versus the same period last year. The increase was primarily due to incremental depreciation of capital expenditures related to the opening of 43 new Company-operated Shacks between March 27, 2024 and March 26, 2025, partially offset by a reduction in depreciation expense due to fully depreciated technology projects and assets compared to the prior year period.

Previous wording

Pre-opening costs consist primarily of occupancy, manager and team member wages, cookware, travel and lodging costs for our opening training team and other supporting team members, marketing expenses, legal fees and inventory costs incurred prior to the opening of a Shack. All such costs incurred prior to the opening of a Company-operated Shack are expensed in the period in which the expense was incurred. Pre-opening costs can fluctuate significantly from period to period, based on the number and timing of Company-operated Shack openings and the specific pre-opening costs incurred for each Company-operated Shack. Additionally, Company-operated Shack openings in new geographic markets may initially experience higher pre-opening costs than our established geographic markets, such as the New York City metropolitan area, where we have greater economies of scale and incur lower travel and lodging costs for our training team.

Current wording

Pre-opening costs consist primarily of occupancy, manager and team member wages, cookware, travel and lodging costs for our opening training team and other supporting team members, marketing expenses, legal fees and inventory costs incurred prior to the opening of a Company-operated Shack. All such costs incurred prior to the opening of a Company-operated Shack are expensed in the period in which the expense was incurred. Pre-opening costs can fluctuate significantly from period to period, based on the number and timing of Company-operated Shack openings and the specific pre-opening costs incurred for each Company-operated Shack. Additionally, Company-operated Shack openings in new geographic markets may initially experience higher pre-opening costs than our established geographic markets, such as the New York City metropolitan area, where we have greater economies of scale and incur lower travel and lodging costs for our training team.

Previous wording

Impairments, loss on disposal of assets, and Shack closures for the thirteen and thirty-nine weeks ended September 25, 2024 increased to $29.1 million and $30.7 million, respectively. The increases for the thirteen and thirty-nine weeks ended September 25, 2024 were primarily due to expenses related to the closure of nine Company-operated Shacks in August 2024.

Current wording

Impairments, loss on disposal of assets, and Shack closures for the thirteen weeks ended March 26, 2025 increased to $2.1 million versus the same period last year. The increase was primarily due to expenses related to the closure of nine Company-operated Shacks in fiscal 2024.

Previous wording

Interest expense for the thirty-nine weeks ended September 25, 2024 increased 23.5% to $1.5 million versus the same period last year. The increase for the thirty-nine 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.

Current wording

Interest expense for the thirteen weeks ended March 26, 2025 increased 10.8% to $0.6 million versus the same period last year. The increase was primarily due to increased finance lease charges from the opening of 43 new Company-operated Shacks between March 27, 2024 and March 26, 2025.

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.

Current wording

We are the sole managing member of SSE Holdings, and as a result, consolidate the financial results of SSE Holdings. For U.S. federal and certain state and local tax purposes, SSE Holdings is classified as a partnership. Consequently, 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. As a result, the Company is subject to U.S. federal income taxes, along with applicable state and local taxes on its allocable share of any taxable income or loss of SSE Holdings. Additionally, the Company is taxed on any standalone income or loss generated by Shake Shack, Inc. The Company is also subject to withholding taxes in certain foreign jurisdictions.

Previous 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.

Current wording

Our effective income tax rates for the thirteen weeks ended March 26, 2025 and March 27, 2024 were 14.0% and 19.0%, respectively. The decrease was primarily attributable to an increase in pre-tax income and the recognition of a windfall benefit related to equity-based compensation in the current quarter. Additionally, an increase in the Company's ownership interest in SSE Holdings increases 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 March 26, 2025 and March 27, 2024.

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 (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.

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, 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.

Previous 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.

Current wording

Net income attributable to non-controlling interests for the thirteen weeks ended March 26, 2025 increased to $0.3 million from $0.2 million in the same period last year. The increase was primarily due to increased net results compared to the same period last year, partially offset by a decrease in the non-controlling interest holders' weighted average ownership, which was 5.8% and 6.7%, respectively for the thirteen weeks ended March 26, 2025 and March 27, 2024.

Previous wording

Restaurant-level profit, formerly referred to as Shack-level operating profit, is defined as Shack sales less Shack-level operating expenses which include Food and paper costs, Labor and related expenses, Other operating expenses and Occupancy and related expenses.

Current wording

Restaurant-level profit is defined as Shack sales less Shack-level operating expenses which include Food and paper costs, Labor and related expenses, Other operating expenses and Occupancy and related expenses.

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 (loss) 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 from operations, the most directly comparable GAAP financial measure, is as follows.

Previous 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.

Current 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 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 (loss), 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, the most directly comparable GAAP measure, is as follows.

Previous wording

(3)Expenses incurred to establish accruals related to the settlements of legal matters.

Current wording

(2)Expenses incurred to establish accruals related to the settlements of legal matters.

Previous wording

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

Current wording

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

Previous 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.

Current wording

(4)Calculated as a percentage of Total revenue, which was $320.9 million and $290.5 million for the thirteen weeks ended March 26, 2025 and March 27, 2024, respectively.

Previous 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.

Current 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.

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 (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.

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 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 (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.

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 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

Previous wording

(1)Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of the non-controlling interest and recognition of the net income attributable to non-controlling interests. Refer to Note 11, Earnings (Loss) per Share, in the accompanying Condensed Consolidated Financial Statements, for additional information.

Current wording

(1)Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of the non-controlling interest and recognition of the net income attributable to non-controlling interests.

Previous 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.

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 21.3% and 2.8% for the thirteen weeks ended March 26, 2025 and March 27, 2024, 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.