Shake Shack, Inc. · NYSE:SHAK
Shake Shack — Q2 2019 Earnings Presentation
20 slides from Shake Shack's earnings presentation, Aug 5, 2019
Slide 1: Second Quarter 2019 Supplemental Earnings Slides
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Slide 2: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation contains 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 res
Slide 3: Q2 2019 financial highlights
Q2 2019 financial highlights +3.6% $152.7M $225.9M Growth in Total Revenue Shack System-wide Same-Shack +31% YoY Sales2 Sales1 +33% YoY $4.3M $25.9M 19 $36.2M Average Adjusted New Domestic Shack-Level Unit Volume3 EBITDA4 Company-Operated Operating Profit4 +18% YoY and Licensed Shacks +14% YoY opene
Slide 4: Business highlights
Business highlights International expansion continues to be Digital innovation focuses on expanded Sequential improvement in Shack-level strong with new market openings in the access to Shake Shack with profitability through supply chain initiatives for Philippines and Singapore during Q2, integrate
Slide 5: Strategic digital innovation
Strategic digital innovation APP WEB KIOSK PICK-UP DELIVERY Guest faves at Group ordering; Convenience & visually Improve the in-person Shack delivered, their fingertips; no account, merchandized menu experience and guest whenever the curated exclusives no problem flow in front of house craving stri
Slide 6: Launching national delivery partnership with Grubhub
Launching national delivery partnership with Grubhub OPPORTUNITY EXECUTION Partnership reflects our commitment to Relentless focus on providing both convenience cultivating a connected community through our and excellence in experience through our digital digital products offering ✓ Drives exposure
Slide 7: Fiscal year 2019 guidance
Fiscal year 2019 guidance These forward-looking projections are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different. Factors that might cause such differences include, but are not limited to, those discussed in Part I
Slide 8: Team member spotlight
Team member spotlight When did you realize that Shack was the place for you? “When I was a guest waiting in line at the Madison Square Park Shack in 2009. I joined the Shake Shack family shortly after my experience and started as a line cook. I’ve had the opportunity to grow and progress over the ye
Slide 9: Appendix Including GAAP & Non-GAAP Measures
Appendix Including GAAP & Non-GAAP Measures 9
Slide 10: Shack-level operating profit excluding prior year benefits
Shack-level operating profit excluding prior year benefits Shack-level operating profit margin for Q2 2019 was 24.4% compared to the prior year quarter of 27.2%, excluding benefits in Q2 2018 Q2 2018 Q2 2018 Q2 2018 Q2 2019 as reported benefits adjusted as reported Food and paper costs 30 bps 28.1%
Slide 11: Impact of new accounting standard
Impact of new accounting standard Balance Sheet changes Balance Sheet impact from the adoption of the new Right-of-use asset & lease liabilities lease accounting standard • Net increase to total assets of $218 million Landlord funded assets & deemed landlord financing liabilities • Net increase to t
Slide 12: Definitions
Definitions “Adjusted EBITDA,” a non-GAAP measure, is defined as EBITDA (as defined above), excluding equity-based compensation expense, deferred lease costs, losses on the disposal of property and equipment, as well as certain non-recurring items that the Company does not believe directly reflect i
Slide 13: Income statement
Income statement Thirteen Weeks Ended Twenty-Six Weeks Ended (in thousands) June 26, 2019 June 27, 2018 June 26, 2019 June 27, 2018 Shack sales $ 147,876 96.8% $ 112,898 97.1% $ 276,445 96.9% $ 208,987 97.0% Licensing revenue 4,837 3.2% 3,384 2.9% 8,877 3.1% 6,411 3.0% TOTAL REVENUE 152,713 100.0% 1
Slide 14: Shack-level operating profit definitions
Shack-level operating profit definitions Shack-Level Operating Profit Shack-level operating profit 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. How This Measure
Slide 15: Shack-level operating profit
Shack-level operating profit Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) June 26, 2019 June 27, 2018 June 26, 2019 June 27, 2018 Operating income $ 11,871 $ 13,018 $ 17,033 $ 19,532 Less: Licensing revenue 4,837 3,384 8,877 6,411 Add: General and administrative expenses
Slide 16: Adjusted EBITDA definitions
Adjusted EBITDA definitions EBITDA and Adjusted EBITDA EBITDA is defined as net income before interest expense (net of interest income), income tax expense and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA (as defined above) excluding equity-based compensation expense,
Slide 17: Adjusted EBITDA
Adjusted EBITDA Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) June 26, 2019 June 27, 2018 June 26, 2019 June 27, 2018 Net income $ 11,171 $ 10,571 $ 14,778 $ 15,550 Depreciation expense 9,799 6,968 18,765 13,466 Interest expense, net 97 613 169 1,171 Income tax expense 1,
Slide 18: Adjusted pro forma effective tax rate
Adjusted pro forma effective tax rate Thirteen Weeks Ended Thirteen Weeks Ended Twenty-Six Weeks Ended March 27, 2019 June 26, 2019 June 26, 2019 Income Tax Income Before Income Tax Income Before Income Tax Income Before (dollar amounts in thousands) Expense Income Taxes Effective Tax Rate Expense I
Slide 19: Adjusted pro forma effective tax rate
Adjusted pro forma effective tax rate Thirteen Weeks Ended Thirteen Weeks Ended Thirteen Weeks Ended Thirteen Weeks Ended Fiscal Year Ended March 28, 2018 June 27, 2018 September 26, 2018 December 26, 2018 December 26, 2018 Income Tax Income Before Effective Tax Income Tax Income Before Effective Ta
Slide 20: Investor Contact / Media Contact
Investor Contact: Melissa Calandruccio, ICR Michelle Michalski, ICR (844) Shack-04 (844-742-2504) investor@shakeshack.com Media Contact: Kristyn Clark, Shake Shack 646-747-8776 kclark@shakeshack.com 20