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, 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.

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," "target," "may," "could," "would," "will," "should," "can," "can have," the negatives thereof and other similar expressions.

Previous 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 31, 2025 ("2025 Form 10-K") and our other filings with the SEC.

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 31, 2025 ("2025 Form 10-K"), our subsequent Quarterly Reports on Form 10-Q, and our other filings with the SEC.

Previous wording

The following discussion should be read in conjunction with our 2025 Form 10-K and the Condensed Consolidated Financial Statements and notes thereto included in Part I, Item 1 of this Form 10-Q. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years and the associated quarters, months and periods of those fiscal years.

Current wording

The following discussion should be read in conjunction with our 2025 Form 10-K, our subsequent Quarterly Reports on Form 10-Q, the Condensed Consolidated Financial Statements and notes thereto included in Part I, Item 1 of this Form 10-Q, and our other filings with the SEC. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years and the associated quarters, months and periods of those fiscal years.

Previous wording

Shake Shack serves modern, fun and elevated versions of American classics using only premium ingredients. We are known for our made-to-order 100% Angus beef burgers, crispy chicken, hand-spun milkshakes, house-made lemonades, beer, wine, and more. With our fine-dining roots and a commitment to crafting uplifting experiences, Shake Shack has become a cult-brand and created a new category, fine-casual.

Current wording

Shake Shack serves elevated versions of American classics using only the best ingredients. We're known for our delicious made-to-order Angus beef burgers, crinkle cut fries, crispy chicken, hand-spun milkshakes, house-made lemonades, and more. With our high-quality food at a great value, warm hospitality, and a commitment to crafting uplifting experiences, Shake Shack has become a cult-brand with widespread appeal.

Previous wording

Same-Shack sales for the thirteen weeks ended April 1, 2026 increased 4.6% compared to the same period last year, driven by a 3.2% increase in price mix and a 1.4% increase in guest traffic. For the purpose of calculating same-Shack sales for the thirteen weeks ended April 1, 2026, Shack sales for 287 Shacks were included in the comparable Shack base.

Current wording

Same-Shack sales for the thirteen weeks ended July 1, 2026 increased 3.5% compared to the same period last year, driven by a 2.0% increase in guest traffic and a 1.5% increase in price mix. Same-Shack sales for the twenty-six weeks ended July 1, 2026 increased 4.0% compared to the same period last year, driven by a 2.3% increase in price mix and a 1.7% increase in guest traffic. For the purpose of calculating same-Shack sales for the thirteen and twenty-six weeks ended July 1, 2026, Shack sales for 296 Shacks were included in the comparable Shack base.

Previous wording

Average weekly sales were $72,000 for the thirteen weeks ended April 1, 2026, which was flat compared to the same period last year, primarily driven by higher menu prices, partially offset by weather headwinds and menu mix.

Current wording

Average weekly sales were $78,000 for the thirteen weeks ended July 1, 2026, which was flat compared to the same period last year, primarily driven by higher menu prices, partially offset by menu mix. Average weekly sales were $75,000 for the twenty-six weeks ended July 1, 2026, which was flat compared to the same period last year, primarily driven by higher menu prices, partially offset by menu mix.

Previous wording

Digital sales for the thirteen weeks ended April 1, 2026 increased 19.6% to $141.1 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 39.9% of Shack sales during the thirteen weeks ended April 1, 2026.

Current wording

Digital sales for the thirteen weeks ended July 1, 2026 increased 34.3% to $164.5 million compared to the same period last year. Digital sales for the twenty-six weeks ended July 1, 2026 increased 27.1% to $305.6 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 40.8% and 40.3%, respectively, of Shack sales during the thirteen and twenty-six weeks ended July 1, 2026.

Previous wording

The following tables summarize the Shacks opened and closed during the thirteen weeks ended April 1, 2026.

Current wording

The following tables summarize the Shacks opened and closed during the thirteen and twenty-six weeks ended July 1, 2026.

Previous wording

The following table summarizes our results of operations for the thirteen weeks ended April 1, 2026 and March 26, 2025:

Current wording

The following table summarizes our results of operations for the thirteen and twenty-six weeks ended July 1, 2026 and June 25, 2025:

Previous wording

Licensing revenue for the thirteen weeks ended April 1, 2026 increased 14.7% to $12.7 million versus the same period last year. The increase was primarily due to the opening of 38 new licensed Shacks between March 26, 2025 and April 1, 2026, which contributed $1.3 million to Licensing revenue.

Current wording

Licensing revenue for the twenty-six weeks ended July 1, 2026 increased 10.6% to $26.9 million versus the same period last year. The increase was primarily due to the opening of 40 new licensed Shacks between June 25, 2025 and July 1, 2026, which contributed $2.2 million.

Previous wording

As a percentage of Shack sales, the increase in Food and paper costs for the thirteen weeks ended April 1, 2026 was primarily driven by unfavorable menu mix and marketing promotions, partially offset by increased menu prices.

Current wording

As a percentage of Shack sales, the increases in Food and paper costs for the thirteen and twenty-six weeks ended were primarily driven by unfavorable menu mix and increased commodity costs, mainly beef, and marketing promotions, partially offset by increased menu prices.

Previous wording

Labor and related expenses for the thirteen weeks ended April 1, 2026 increased 7.0% to $92.7 million versus the same period last year. The increase was primarily due to the opening of 58 new Company-operated Shacks between March 26, 2025 and April 1, 2026, partially offset by labor efficiencies.

Current wording

Labor and related expenses for the thirteen weeks ended July 1, 2026 increased 15.0% to $101.2 million versus the same period last year. Labor and related expenses for the twenty-six weeks ended July 1, 2026 increased 11.0% to $193.9 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to the opening of 61 new Company-operated Shacks between June 25, 2025 and July 1, 2026, partially offset by labor efficiencies.

Previous wording

As a percentage of Shack sales, the decrease in Labor and related expenses for the thirteen weeks ended April 1, 2026 was primarily due to labor efficiencies and sales leverage partially offset by increased wages.

Current wording

As a percentage of Shack sales, the decreases in Labor and related expenses for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to labor efficiencies and sales leverage, partially offset by increased wages and incremental expenses from the opening of 61 new Company-operated Shacks between June 25, 2025 and July 1, 2026 as we accelerate our pipeline and as these Shacks mature.

Previous wording

As a percentage of Shack sales, the increase in Other operating expenses for the thirteen weeks ended April 1, 2026 was primarily due to increased facilities costs, mainly the timing of repairs and maintenance, and increased travel expenses related to the 17 new Company-operated Shacks opened in the period.

Current wording

As a percentage of Shack sales, the increase in Other operating expenses for the thirteen weeks ended July 1, 2026 was primarily due to increased delivery commissions associated with higher delivery sales and increased facilities costs. As a percentage of Shack sales, the increase in Other operating expenses for the twenty-six weeks ended July 1, 2026 was primarily due to increased facilities cost, mainly the timing of repairs and maintenance, and increased transaction costs associated with higher sales.

Previous wording

As a percentage of Shack sales, the increase in Occupancy and related expenses for the thirteen weeks ended April 1, 2026 was primarily due to higher common area maintenance charges.

Current wording

As a percentage of Shack sales, Occupancy and related expenses were flat for the thirteen weeks ended July 1, 2026. As a percentage of Shack sales, the increase in Occupancy and related expenses for the twenty-six weeks ended July 1, 2026 was primarily driven by higher common area maintenance charges.

Previous wording

As a percentage of Total revenue, the increase in General and administrative expenses for the thirteen weeks ended April 1, 2026 was primarily due to the aforementioned items.

Current wording

General and administrative expenses for the thirteen weeks ended July 1, 2026 increased 18.8% to $48.3 million versus the same period last year. The increase was primarily due to increased investments in marketing initiatives as well as increased legal costs. As a percentage of Total revenue, the increase in General and administrative expenses for the thirteen weeks ended July 1, 2026 was primarily due to the aforementioned items, partially offset by a reduction in performance-based compensation and forfeitures of equity-based compensation.

Previous wording

General and administrative expenses for the thirteen weeks ended April 1, 2026 increased 31.9% to $53.6 million versus the same period last year. The increase was primarily due to increased investments in marketing and technology initiatives as well as increased wages and other team costs to support our Shack growth, partially offset by a decrease in legal costs.

Current wording

General and administrative expenses for the twenty-six weeks ended July 1, 2026 increased 25.4% to $101.9 million versus the same period last year. The increase was primarily due to increased investments in marketing initiatives as well as increased wages and other team costs. As a percentage of Total revenue, the increase in General and administrative expenses for the twenty-six weeks ended July 1, 2026 was primarily due to increased investments in marketing and technology initiatives, partially offset by a reduction in performance-based compensation.

Previous wording

Depreciation and amortization expense for the thirteen weeks ended April 1, 2026 increased 9.7% to $29.1 million versus the same period last year. The increase was primarily due to incremental depreciation of capital expenditures related to the opening of 58 new Company-operated Shacks between March 26, 2025 and April 1, 2026, partially offset by a reduction in depreciation expense due to fully depreciated assets compared to the prior year period.

Current wording

Depreciation and amortization expense for the thirteen weeks ended July 1, 2026 increased 15.7% to $30.7 million versus the same period last year. Depreciation and amortization expense for the twenty-six weeks ended July 1, 2026 increased 12.7% to $59.8 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to incremental depreciation of capital expenditures related to the opening of 61 new Company-operated Shacks between June 25, 2025 and July 1, 2026.

Previous wording

Pre-opening costs for the thirteen weeks ended April 1, 2026 increased 113.5% to $6.9 million versus the same period last year. The increase was primarily due to increased wages and team costs, occupancy costs and travel and entertainment expense to support our larger development pipeline which includes more Shacks opened during the thirteen weeks ended April 1, 2026 and Shacks under construction compared to the same prior year period.

Current wording

Pre-opening costs for the thirteen weeks ended July 1, 2026 increased 34.0% to $6.6 million versus the same period last year. Pre-opening costs for the twenty-six weeks ended July 1, 2026 increased 65.3% to $13.5 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to increased wages and team costs, occupancy costs, and travel and entertainment expense to support our larger development pipeline which includes more Shacks opened during the thirteen and twenty-six weeks ended July 1, 2026 and Shacks under construction compared to the same prior year periods.

Previous wording

Impairments, loss on disposal of assets, and Shack closures primarily consists of the net book value of assets that have been retired which mainly includes 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.

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

Impairments, loss on disposal of assets, and Shack closures for the thirteen weeks ended April 1, 2026 decreased to $0.9 million versus the same period last year. The decrease was primarily due to the absence of expenses related to the closure of nine Company-operated Shacks in fiscal 2024, partially offset by an increase in the cost of abandoned projects.

Current wording

Impairments, loss on disposal of assets, and Shack closures for the thirteen and twenty-six weeks ended July 1, 2026 decreased to $0.4 million and $1.3 million, respectively, versus the same periods last year. The decreases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to the absence of expenses related to the closure of nine Company-operated Shacks in fiscal 2024.

Previous wording

Interest expense generally consists of interest on the current portion of our liabilities under the Tax Receivable Agreement, imputed interest related to our financing equipment leases, amortization of deferred financing costs, interest and fees on our Revolving Credit Facility and amortization of debt issuance costs.

Current wording

Interest expense generally consists of imputed interest related to our financing equipment leases, amortization of deferred financing costs, interest and fees on our Revolving Credit Facility, interest on the current portion of our liabilities under the Tax Receivable Agreement and amortization of debt issuance costs.

Previous wording

Interest expense for the thirteen weeks ended April 1, 2026 decreased 2.7% to $0.5 million versus the same period last year. The decrease was primarily due to a decrease in finance lease charges related to new financing equipment leases with lower lease liability balances.

Current wording

Interest expense for the twenty-six weeks ended July 1, 2026 decreased 0.9% to $1.1 million versus the same period last year. The decrease for the twenty-six weeks ended July 1, 2026 was primarily due to a decrease in finance lease charges related to new financing equipment leases with lower lease liability balances, partially offset by an increase in various sales tax audit assessment charges.

Previous wording

Our effective income tax rates for the thirteen weeks ended April 1, 2026 and March 26, 2025 were 33.0% and 14.0%, respectively. The increase in the effective income tax rate for thirteen weeks ended April 1, 2026 was primarily driven by a decline in the pre-tax income compared to the prior year period, which resulted in discrete tax items having a proportionately greater impact on the effective income tax rate. Additionally, an increase in the Company's ownership interest in SSE Holdings increases its share of the taxable income (loss) of SSE Holdings. Our weighted-average ownership interest in SSE Holdings was 94.3% and 94.2%, respectively, for the thirteen weeks ended April 1, 2026 and March 26, 2025.

Current wording

Our effective income tax rates for the thirteen weeks ended July 1, 2026 and June 25, 2025 were 25.9% and 25.1%, respectively. Our effective income tax rates for the twenty-six weeks ended July 1, 2026 and June 25, 2025 were 25.8% and 23.2%, respectively. The increases in the effective income tax rates for the thirteen and twenty-six weeks ended July 1, 2026 were primarily driven by a decrease in forecasted pre-tax income compared to the prior year, including the effects of nondeductible tax items and a nonrecurring deferred tax adjustment recognized in the prior-year period.

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 April 1, 2026 declined to nil from income of $0.3 million in the same period last year. The decline was primarily due to a decrease in 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 5.7% and 5.8%, respectively for the thirteen weeks ended April 1, 2026 and March 26, 2025.

Current wording

Net income attributable to non-controlling interests for the thirteen and twenty-six weeks ended July 1, 2026 decreased to $1.2 million versus the same periods last year. The decreases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to a decline in net results compared to the same periods last year.

Previous wording

34 |Shake Shack Inc. Form 10-Q 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

34 |Shake Shack Inc. Form 10-Q

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. Reconciliations of Restaurant-level profit to Income (loss) from operations, the most directly comparable GAAP financial measure, were 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 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. Reconciliations of EBITDA and adjusted EBITDA to Net income (loss), the most directly comparable GAAP measure, were 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

(5)Calculated as a percentage of Total revenue, which was $366.7 million and $320.9 million for the thirteen weeks ended April 1, 2026 and March 26, 2025, respectively.

Current wording

(5)Calculated as a percentage of Total revenue, which was $417.6 million and $784.4 million for the thirteen and twenty-six weeks ended July 1, 2026, respectively, and $356.5 million and $677.4 million for the thirteen and twenty-six weeks ended June 25, 2025, 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

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 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 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.

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 (loss) attributable to non-controlling interests.

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

(2)Expenses incurred related to Shack closures during fiscal 2024 and fiscal 2025.

Current wording

(2)Expenses incurred related to Shack closures and impairment charges during fiscal 2024 and fiscal 2025.

Previous wording

(7)Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 89.3% and 21.3% for the thirteen weeks ended April 1, 2026 and March 26, 2025, 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

(7)Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 24.8% and 26.8% for the thirteen and twenty-six weeks ended July 1, 2026, respectively, and 23.6% and 23.1% for the thirteen and twenty-six weeks ended June 25, 2025, 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

Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand, and availability under our Revolving Credit Facility. As of April 1, 2026, we maintained a Cash and cash equivalents balance of $313.7 million. In March 2021, we issued 0% Convertible Senior Notes (“Convertible Notes”), and received $243.8 million of proceeds, net of discounts. Refer to Note 6, Debt, in the accompanying Condensed Consolidated Financial Statements, for additional information relating to our long-term debt.

Current wording

Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand, and availability under our Revolving Credit Facility. As of July 1, 2026, we maintained a Cash and cash equivalents balance of $308.0 million. In March 2021, we issued 0% Convertible Senior Notes (“Convertible Notes”), and received $243.8 million of proceeds, net of discounts. Refer to Note 6, Debt, in the accompanying Condensed Consolidated Financial Statements, for additional information relating to our long-term debt.

Previous wording

Our primary requirements for liquidity are to fund our working capital needs, operating and finance lease obligations, capital expenditures and general corporate needs. Our requirements for working capital are generally not significant because our guests pay for their food and beverage purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payment is due to the supplier of such items. Our ongoing capital expenditures are principally related to opening new Shacks, existing Shack capital investments (both for remodels and maintenance), as well as investments in our corporate technology infrastructure to support our Shack Support Centers, Shake Shack locations, and digital strategy.

Current wording

Our primary requirements for liquidity are to fund our working capital needs, operating and finance lease obligations, capital expenditures and general corporate needs. Our requirements for working capital are generally not significant because our guests pay for their purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payment is due to the supplier of such items. Our ongoing capital expenditures are principally related to opening new Shacks, existing Shack capital investments (both for remodels and maintenance), as well as investments in our corporate technology infrastructure to support our Shack Support Centers, Shake Shack locations, and digital strategy.

Previous wording

In addition, we are obligated to make payments to certain members of SSE Holdings under the Tax Receivable Agreement. As of April 1, 2026, such obligations totaled $246.0 million. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related payments under the Tax Receivable Agreement. Although the amount of any payments that must be made under the Tax Receivable Agreement may be significant, the timing of these payments will vary and will generally be limited to one payment per member per year. The amount of such payments is also limited to the extent we utilize the related deferred tax assets. The payments that we are required to make will generally reduce the amount of overall cash flow that might have otherwise been available to us or to SSE Holdings, but we expect the cash tax savings we will realize from the utilization of the related deferred tax assets to fund the required payments.

Current wording

In addition, we are obligated to make payments to certain members of SSE Holdings under the Tax Receivable Agreement. As of July 1, 2026, such obligations totaled $246.1 million. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related payments under the Tax Receivable Agreement. Although the amount of any payments that must be made under the Tax Receivable Agreement may be significant, the timing of these payments will vary and will generally be limited to one payment per member per year. The amount of such payments is also limited to the extent we utilize the related deferred tax assets. The payments that we are required to make will generally reduce the amount of overall cash flow that might have otherwise been available to us or to SSE Holdings, but we expect the cash tax savings we will realize from the utilization of the related deferred tax assets to fund the required payments.