Shake Shack, Inc. · NYSE:SHAK
Shake Shack — Q1 2021 Earnings Presentation
29 slides from Shake Shack's earnings presentation, May 6, 2021
Slide 1: First Quarter Earnings Supplemental
FIRST QUARTER EARNINGS SUPPLEMENTAL MAY 6, 2021 2020 Strategic Plan Meeting of the Board of Directors | Q4 2019 1
Slide 2: Cautionary Note on Forward-Looking Statements
C A U T I O N A RY N O T E O N F O R WA R D - L O O K I N G S TAT E M E N T S This presentation contains forward-looking statements, expressions. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. Some of the factors which could cause results to
Slide 3: Q1 2021 Results
Q 1 2 0 2 1 R E S U LT S $155M $228M +5.7% Q1 Total Revenue Shack system-wide sales1 Increase in Q1 same-Shack sales versus 20202 +8.5% YoY +3% YoY (14.8%) decrease in Q1 same- Shack sales versus 20193 $22.6M $7.1M Shack-level operating profit4 Adjusted EBITDA5 15.0% of Shack sales 4.6% of Total Rev
Slide 4: Business Highlights
BUSINESS HIGHLIGHTS Average weekly sales First quarter Company owned app 16-18 Company-operated Shacks to improvement exiting Q1, and and web channels grew ~230% open through Q2 with 35-40 fiscal April 2021 at $69K; major YoY despite lapping COVID planned in total for 2021, focusing urban markets re
Slide 5: Fiscal April 2021 Snapshot
FISCAL APRIL 2021 SNAPSHOT $69K +86% (15%) Increase in fiscal April same- Fiscal April average weekly sales, Shack sales versus 20201 decrease in fiscal April same- up from $64K in Q1 Shack sales versus 20192 ~90% 15 Retention of digital sales in fiscal Company-operated Shacks April versus highs in
Slide 6: Average Weekly Sales (AWS)
AV E R A G E W E E K LY S A L E S 1 ( AW S ) AW S C O N T I N U E D T O I N C R E A S E I N M A R C H T O $ 6 8 K A N D A P R I L T O $ 6 9 K 171% Q1 AWS $64K Q4 AWS $62K Q3 AWS $58K AWS Total YoY Shack Q2 AWS $45K Sales Growth (Decline) 39% (3%) (1%) (5%) (6%) (11%) (10%) (23%) (20%) (6%) (32%) (32
Slide 7: Suburban Shacks Continue to Lead Recovery
S U B U R B A N S H A C K S C O N T I N U E T O L E A D R E C O V E RY S U B U R B A N S A M E - S H A C K S A L E S F L AT T O 2 0 1 9 L E V E L S , W H I L E U R B A N M A R K E T S R E M A I N M AT E R I A L LY I M PA C T E D URBAN/SUBURBAN1 SAME-SHACK SALES2 VS PRIOR YEAR AND 20193 Second Quarte
Slide 8: Regional Performance Driven by Suburban Density
REGIONAL PERFORMANCE DRIVEN BY SUBURBAN DENSITY S O U T H E A S T R E G I O N , H E A V Y S U B U R B A N F O O T P R I N T, A B O V E 2 0 1 9 L E V E L S W I T H N Y C , M A N H AT T A N C O N T I N U I N G T O L A G A S B U S I N E S S T R A F F I C , T O U R I S M S L O W T O R E T U R N REGIONAL
Slide 9: ~90% Retention of Digital Sales in Fiscal April
~ 9 0 % R E T E N T I O N 1 O F D I G I TA L S A L E S 2 I N F I S C A L A P R I L A S I N - S H A C K S A L E S G R A D U A L LY R E T U R N C O M PA N Y- O W N E D A P P & W E B C H A N N E L S A C Q U I R E D 2 . 4 M I L L I O N N E W P U R C H A S E R S S I N C E M A R C H 2 0 2 0 ; Q 1 2 0 2 1
Slide 10: Digital Focus on New Programs and Enhanced User Experience
D I G I TA L F O C U S O N N E W P R O G R A M S A N D E N H A N C E D U S E R EXPERIENCE F U L LY L A U N C H E D S H A C K A P P D E L I V E R Y I N F I R S T Q U A R T E R Shack App Delivery rolled out nationwide in March through partnership with Uber Eats Upcoming web redesign will feature enhan
Slide 11: 16-18 Shacks Planned to Open in First Half of 2021
16-18 SHACKS PLANNED TO OPEN IN FIRST HALF OF 2021 FIRST INDIANAPOLIS SHACK OPENED WITH DRIVE-UP SHACK TRACK WINDOW; 2021 SHACK C L A S S O P E N I N G W I T H S T R O N G S A L E S AT $ 7 9 K AW S I N Q 1 Pull right up to the Shack Track Take out at the Shack Guests line up for the drive-up window
Slide 12: New Formats to Enhance Ease of Pickup
N E W F O R M AT S T O E N H A N C E E A S E O F P I C K U P C L A S S O F 2 0 2 1 L E A D I N G W I T H S H A C K T R A C K D I G I TA L C O N V E N I E N C E : I N C L U D I N G WA L K - U P WINDOWS, DRIVE-UP WINDOWS, CURBSIDE AND ENHANCED INTERIOR PICKUP Shacks designed to enhance In 2021, approx
Slide 13: Licensed Business Improved Throughout First Quarter
LICENSED BUSINESS IMPROVED THROUGHOUT FIRST QUARTER I M P R O V I N G P E R F O R M A N C E A C R O S S I N T E R N AT I O N A L A N D D O M E S T I C S H A C K S D R I V E N B Y N E W OPENINGS, RESTRICTIONS BEING LIFTED AND INCREASED AIRPORT TRAFFIC 233% Licensed Weekly Sales 1 20% 13% Total year-o
Slide 14: 8 Licensed Shacks Opened YTD, 15-20 Targeted in 2021
8 L I C E N S E D S H A C K S O P E N E D Y T D , 1 5 - 2 0 TA R G E T E D I N 2 0 2 1 NEW MARKET GROWTH IN MACAO ALONG WITH ADDITIONAL OPENINGS IN KOREA, MAINLAND C H I N A , S I N G A P O R E A N D M I D D L E E A S T ; S H E N Z H E N E X P E C T E D T O O P E N L AT E R T H I S Y E A R 2020 Stra
Slide 15: Culinary Collabs Featuring Diverse Local Chefs
C U L I N A RY C O L L A B S F E AT U R I N G D I V E R S E L O C A L C H E F S T H E N O W S E R V I N G S E R I E S F O C U S E S O N S U P P O R T I N G T H E R E S TA U R A N T I N D U S T R Y W I T H A P O R T I O N O F N E T P R O C E E D S G O I N G T O N O N - P R O F I T S T H AT B E N E F
Slide 16: Annual Stand for Something Good Report: ESG Efforts Published
A N N U A L S TA N D F O R S O M E T H I N G G O O D R E P O R T: E S G EFFORTS PUBLISHED A H I G H - L E V E L O V E R V I E W O F S H A K E S H A C K ’ S D O M E S T I C , C O M PA N Y- O W N E D O P E R AT I O N S I N 2 0 2 0 A N D N E W O R U P C O M I N G R E S P O N S I B L E B U S I N E S S I
Slide 17: 2021 Outlook
2021 OUTLOOK Q2 2021 Guidance Q2 and full year 2021 guidance is derived from recent trends and does not assume Total revenue $174M to $183M material changes to the current operating environment, inclusive of any potential Shack sales $170M to $178M further COVID impacts Licensed revenue $4M to $5M S
Slide 18: Financial Details
FINANCIAL DETAILS 2020 Strategic Plan Meeting Board of the ofBoard Directors of Directors Meeting| | Q1 Q4 2020 2019
Slide 19: Definitions
DEFINITIONS “Adjusted EBITDA,” a non-GAAP measure”, is defined as EBITDA (as defined below), "Shack-level operating profit," a non-GAAP measure, is defined as Shack sales less excluding equity-based compensation expense, deferred lease costs, impairment and loss Shack-level operating expenses includ
Slide 20: 2021 Methodology for Same-Shack Sales Calculation
2 0 2 1 M E T H O D O L O G Y F O R S A M E - S H A C K S A L E S C A L C U L AT I O N Notes Fiscal Calendar Comparisons Reason for Shifted Weeks: Given the 53rd fiscal week in 2020 the comparison periods for 2021 Same-Shack Sales have been shifted one week forward in both 2019 & 2020 to ensure comp
Slide 21: Income Statement
I N C O M E S TAT E M E N T Thirteen Weeks Ended March 31, 2021 March 25, 2020 Shack sales $ 150,668 97.0% $ 138,048 96.4% Licensing revenue 4,614 3.0% 5,122 3.6% TOTAL REVENUE 155,282 100.0% 143,170 100.0% Shack-level operating expenses(1): (1) As a percentage of Shack sales. Food and paper costs 4
Slide 22: Shack-Level Operating Profit Definitions
S H A C K - L E V E L O P E R AT I N G P R O F I T D E F I N I T I O N S Shack-Level Operating Profit Limitations of the Usefulness of this Measure Shack-level operating profit is defined as Shack sales less Shack-level operating Shack-level operating profit and Shack-level operating profit margin m
Slide 23: Shack-Level Operating Profit
S H A C K - L E V E L O P E R AT I N G P R O F I T Thirteen Weeks Ended (dollar amount in thousands) March 31, 2021 March 25, 2020 Operating loss $ (10,021) $ (787) Less: Licensing revenue 4,614 5,122 Add: General and administrative expenses 19,565 16,191 Depreciation and amortization expense 13,726
Slide 24: Adjusted EBITDA Definitions
ADJUSTED EBITDA DEFINITIONS EBITDA and Adjusted EBITDA Limitations of the Usefulness of These Measures EBITDA is defined as Net income (loss) before interest expense (net of interest EBITDA and adjusted EBITDA may differ from similarly titled measures used by income), Income tax expense (benefit) an
Slide 25: Adjusted EBITDA
ADJUSTED EBITDA Thirteen Weeks Ended (dollar amounts in thousands) March 31, 2021 March 25, 2020 (1) Represents amortization of capitalized implementation costs related to cloud-based Net income (loss) $ 575 $ (1,079) software arrangements that are included within General and administrative Deprecia
Slide 26: Adjusted Pro Forma Effective Tax Rate Definitions
A D J U S T E D P R O F O R M A E F F E C T I V E TA X R AT E D E F I N I T I O N S Adjusted Pro Forma Effective Tax Rate Limitations of the Usefulness of this Measure Adjusted pro forma effective tax rate represents the effective tax rate assuming the Adjusted pro forma effective tax rate may diffe
Slide 27: 2021 Adjusted Pro Forma Effective Tax Rate
2 0 2 1 A D J U S T E D P R O F O R M A E F F E C T I V E TA X R AT E Thirteen Weeks Ended March 31, 2021 Income Tax Income (Loss) Expense Before Income Effective Tax (dollar amounts in thousands) (Benefit) Taxes Rate As reported $ (11,080) $ (10,505) 105.5% Non-GAAP adjustments (before tax): Debt o
Slide 28: 2020 Adjusted Pro Forma Effective Tax Rate
2 0 2 0 A D J U S T E D P R O F O R M A E F F E C T I V E TA X R AT E Thirteen Weeks Ended March 25, 2020 Income Tax Income (Loss) Expense Before Income Effective Tax (dollar amounts in thousands) (Benefit) Taxes Rate As reported $ 87 $ (992) -8.8% Non-GAAP adjustments (before tax): Executive transi
Slide 29: Contact Information
C O N TA C T I N F O R M AT I O N INVESTOR CONTACT Melissa Calandruccio, ICR Michelle Michalski, ICR (844) Shack-04 (844-742-2504) investor@shakeshack.com MEDIA CONTACT Kristyn Clark, Shake Shack kclark@shakeshack.com 2020 Strategic Plan Meeting of the Board of Directors | Q4 2019