On this page of StockholderLetter.com we present the latest annual shareholder letter from Shake Shack Inc. — ticker symbol SHAK. Reading current and past SHAK letters to shareholders can bring important insights into the investment thesis.
2023 Annual Report
F U L L Y E A R 2 0 2 3 R E S U LT S Collaboration with artist P7 Peerapong Limtammarong for the EmSphere Shack in Thailand Total Revenue $1,087.5M $1,702.1M FY 2023 Total Revenue Shack System-wide Sales1 + 20.8% growth year-overyear + 23.5% growth year-overyear +20.8% growth year-over-year $1,088M $900M $740M $595M $459M $523M GAAP Profitability Metrics: $5.9M $21.0M Operating Income Net Income 2018 2019 2020 $131.8M Shack-level Operating Profit2 Adjusted EBITDA3 19.9% of Shack Sales 12.1% of Total Revenue + 36.8% growth year-overyear + 81.3% growth year-overyear 2. 3. 2023 +23.5% growth year-over-year $1,702M $1,378M $1,123M $895M $672M 2018 1. 2022 Shack System-wide Sales Non-GAAP Profitability Metrics: $208.2M 2021 2019 $779M 2020 2021 2022 2023 Shack system-wide sales is an operating measure and consists of sales from the Company's domestic Company-operated Shacks, domestic licensed Shacks and international licensed Shacks. The Company does not recognize the sales from licensed Shacks as revenue. Of these amounts, revenue is limited to Shack sales from domestic Company-operated Shacks and licensing revenue based on a percentage of sales from domestic and international licensed Shacks. "Shack-level operating profit," a non-GAAP measure, is defined as Shack sales less Shack-level operating expenses including food and paper costs, labor and related expenses, other operating expenses and occupancy and related expenses. A reconciliation to the most directly comparable financial measure presented in accordance with GAAP is set forth in the Non-GAAP Financial Measures section within Item 7 of the Form 10-K for the fiscal year ended December 27, 2023. Adjusted EBITDA, a non-GAAP measure, is defined as EBITDA excluding equity-based compensation expense, impairment and loss on disposal of assets, amortization of cloud-based software implementation costs, as well as certain nonrecurring items that the Company does not believe directly reflect its core operations and may not be indicative of the Company's recurring business operations. A reconciliation to the most directly comparable financial measure presented in accordance with GAAP is set forth in the Non-GAAP Financial Measures section within Item 7 of the Form 10-K for the fiscal year ended December 27, 2023. 2
2023 BUSINESS HIGHLIGHTS Average Weekly Sales ( AWS )1 AWS Total YoY Shack Sales Growth (Decline) $75 $70 $65 $60 22% 24% $73K Full Year 2022 17% 21% 20% 21% $73K $77K $74K $76K $75K First Quarter 2023 Second Quarter 2023 Third Quarter 2023 Fourth Quarter 2023 Full Year 2023 $55 $50 AWS 120% AWS grew 2.4% in 2023 versus 100% 2022. Higher menu prices and strong 80% growth of in-Shack traffic including the 60% expansion of our kiosk strategy supported 40% our continued growth. 20% 0% -20% Same-Shack Sales % Fourth Quarter 2022 Largely driven by in-Shack dining, same-Shack sales (SSS) grew 4.4% in 2023 versus 2022. We retrofitted nearly all of our Shacks with kiosk ordering capabilities, which resulted in at least a high single-digit check lift and was a tailwind to sales. Kiosk was our highest margin channel in 2023. The year ended on a high note with positive traffic. First Quarter 2023 Second Quarter 2023 Third Quarter 2023 Fourth Quarter 2023 10% 7% 6% 6% 5% 5% (1%) 4% 3% 2% 2.8% 1.4% 1.4% (1%) (4%) Total SSS % Traffic % Price/Mix % System-wide Shack Count +18.8% Domestic Company-operated 518 Domestic licensed International licensed 436 369 275 208 126 184 149 33 39 90 22 106 22 295 163 218 254 124 183 2018 2019 2020 2021 2022 2023 72 12 1. 311 25 System-wide Shack Count grew 18.8% in 2023 versus 2022. We opened 41 new Company-operated Shacks in a variety of formats including drive-thru. We opened 44 new licensed Shacks with our partners, including locations in Bahamas and Thailand. Average Weekly Sales ( AWS ) is calculated by dividing total Shack sales by the number of operating weeks for all Shacks in operation during the period. For Shacks that are not open for the entire period, fractional adjustments are made to the number of operating weeks such that it corresponds to the period of associated sales. 3
W E S TA N D FOR SOMETHING GOOD This year, we will be sharing our progress and what's ahead in our 2023 Stand For Something Good Summary. It will be made available at investor.shakeshack.com in the Corporate Governance section. We will share our status against our commitments, from social impact to environmental responsibility and governance. In creating this summary, we will engage stakeholders, collect impact data, work with our leadership team to ensure alignment, highlight suppliers focus on quality ingredients, and identify areas for progress in the future.
2 0 2 4 S T R AT E G I C P R I O R I T I E S Deliver a Consistent Guest Experience Consistency, speed of service, and standardization of the guest experience across all channels is paramount to hospitality in 2024. Grow Sales and Strengthen our Brand Awareness Driving traffic through increased marketing, culinary initiatives and scaling our brand awareness. Make Shake Shack Even More Profitable in 2024 We are working to improve Shack profitability by driving sales, optimizing labor, off-premise profitability, tactical menu pricing, and supply chain initiatives. We plan to target further leverage in G&A while still making targeted investments in advertising. Improve How We Build and Open Shacks Focus on accelerating development pipelines and bringing down our elevated build and pre-opening costs. Develop and Reward High Performing Teams Our teams are at the center of all we do, and we will continue to invest in them. 5
 • shareholder letter icon 4/25/2024 Letter Continued (Full PDF)
 • stockholder letter icon 5/19/2023 SHAK Stockholder Letter
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 • Benford's Law Stocks icon SHAK Benford's Law Stock Score = 92


SHAK Shareholder/Stockholder Letter Transcript:

2023 Annual Report

F U L L Y E A R 2 0 2 3 R E S U LT S
Collaboration with artist P7
Peerapong Limtammarong for the
EmSphere Shack in Thailand
Total Revenue
$1,087.5M
$1,702.1M
FY 2023 Total Revenue
Shack System-wide Sales1
+ 20.8% growth year-overyear
+ 23.5% growth year-overyear
+20.8% growth year-over-year
$1,088M
$900M
$740M
$595M
$459M
$523M
GAAP Profitability Metrics:
$5.9M
$21.0M
Operating Income
Net Income
2018
2019
2020
$131.8M
Shack-level Operating Profit2
Adjusted EBITDA3
19.9% of Shack Sales
12.1% of Total Revenue
+ 36.8% growth year-overyear
+ 81.3% growth year-overyear
2.
3.
2023
+23.5% growth year-over-year
$1,702M
$1,378M
$1,123M
$895M
$672M
2018
1.
2022
Shack System-wide Sales
Non-GAAP Profitability Metrics:
$208.2M
2021
2019
$779M
2020
2021
2022
2023
   Shack system-wide sales    is an operating measure and consists of sales from the Company's domestic Company-operated Shacks, domestic licensed Shacks and international licensed Shacks. The Company does not recognize the sales from
licensed Shacks as revenue. Of these amounts, revenue is limited to Shack sales from domestic Company-operated Shacks and licensing revenue based on a percentage of sales from domestic and international licensed Shacks.
"Shack-level operating profit," a non-GAAP measure, is defined as Shack sales less Shack-level operating expenses including food and paper costs, labor and related expenses, other operating expenses and occupancy and related expenses.
A reconciliation to the most directly comparable financial measure presented in accordance with GAAP is set forth in the Non-GAAP Financial Measures section within Item 7 of the Form 10-K for the fiscal year ended December 27, 2023.
   Adjusted EBITDA,    a non-GAAP measure, is defined as EBITDA excluding equity-based compensation expense, impairment and loss on disposal of assets, amortization of cloud-based software implementation costs, as well as certain nonrecurring items that the Company does not believe directly reflect its core operations and may not be indicative of the Company's recurring business operations. A reconciliation to the most directly comparable financial measure presented in
accordance with GAAP is set forth in the Non-GAAP Financial Measures section within Item 7 of the Form 10-K for the fiscal year ended December 27, 2023.
2

2023 BUSINESS HIGHLIGHTS
Average Weekly Sales (   AWS   )1
AWS
Total YoY Shack Sales Growth (Decline)
$75
$70
$65
$60
22%
24%
$73K
Full
Year
2022
17%
21%
20%
21%
$73K
$77K
$74K
$76K
$75K
First
Quarter
2023
Second
Quarter
2023
Third
Quarter
2023
Fourth
Quarter
2023
Full
Year
2023
$55
$50
AWS
120% AWS grew 2.4% in 2023 versus
100% 2022. Higher menu prices and strong
80% growth of in-Shack traffic including the
60% expansion of our kiosk strategy supported
40% our continued growth.
20%
0%
-20%
Same-Shack Sales %
Fourth
Quarter
2022
Largely driven by in-Shack dining,
same-Shack sales (SSS) grew 4.4% in
2023 versus 2022. We retrofitted nearly
all of our Shacks with kiosk ordering
capabilities, which resulted in at least a high
single-digit check lift and was a tailwind to
sales. Kiosk was our highest margin channel
in 2023. The year ended on a high note with
positive traffic.
First
Quarter
2023
Second
Quarter
2023
Third
Quarter
2023
Fourth
Quarter
2023
10%
7%
6%
6%
5%
5%
(1%)
4%
3%
2%
2.8%
1.4%
1.4%
(1%)
(4%)
Total SSS %
Traffic %
Price/Mix %
System-wide Shack Count
+18.8%
Domestic Company-operated
518
Domestic licensed
International licensed
436
369
275
208
126
184
149
33
39
90
22
106
22
295
163
218
254
124
183
2018
2019
2020
2021
2022
2023
72
12
1.
311
25
System-wide Shack Count grew
18.8% in 2023 versus 2022. We
opened 41 new Company-operated Shacks
in a variety of formats including drive-thru.
We opened 44 new licensed Shacks with
our partners, including locations in Bahamas
and Thailand.
Average Weekly Sales (   AWS   ) is calculated by dividing total Shack sales by the number of operating weeks for all Shacks in operation during the period. For Shacks that are not open for the entire period, fractional
adjustments are made to the number of operating weeks such that it corresponds to the period of associated sales.
3

W E S TA N D
FOR
SOMETHING
GOOD
This year, we will be sharing our
progress and what's ahead in our
2023 Stand For Something
Good Summary. It will be made
available at investor.shakeshack.com
in the Corporate Governance
section. We will share our status
against our commitments, from social
impact to environmental responsibility
and governance. In creating this
summary, we will engage
stakeholders, collect impact data,
work with our leadership team to
ensure alignment, highlight suppliers   
focus on quality ingredients, and
identify areas for progress in the
future.

2 0 2 4 S T R AT E G I C P R I O R I T I E S
Deliver a Consistent Guest
Experience
Consistency, speed of service, and standardization
of the guest experience across all channels is
paramount to hospitality in 2024.
Grow Sales and Strengthen our
Brand Awareness
Driving traffic through increased marketing,
culinary initiatives and scaling our brand
awareness.
Make Shake Shack Even More
Profitable in 2024
We are working to improve Shack profitability
by driving sales, optimizing labor, off-premise
profitability, tactical menu pricing, and supply
chain initiatives.
We plan to target further leverage in G&A
while still making targeted investments in
advertising.
Improve How We Build and
Open Shacks
Focus on accelerating development
pipelines and bringing down our elevated
build and pre-opening costs.
Develop and Reward High
Performing Teams
Our teams are at the center of all we do,
and we will continue to invest in them.
5



shareholder letter icon 4/25/2024 Letter Continued (Full PDF)
 

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