Slide 1: Third Quarter 2020 Earnings Supplemental
THIRD QUARTER 2020 EARNINGS SUPPLEMENTAL OCTOBER 29, 2020 Strategic Plan Update Board of Directors Meeting| Q1 2020
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 RWA R D - L O O K I N G S TAT E M E N T S This presentation contains forward-looking Forward-looking statements discuss the Company's current expectations and projections relating to its financial position, results of operations, plans, objectives, statements, with
Slide 3: Q3 2020 Financial Highlights
Q3 2020 FINANCIAL HIGHLIGHTS (31.7%) YoY $130.4M $195.1M Decrease in same-Shack sales1 Total revenue Shack system-wide sales2 Fiscal September improved to (23%) -17% YoY -18% YoY $8.2M 10 $18.7M Adjusted EBITDA3 New domestic Shack-level operating profit4 6.3% of Total Revenue company-operated and li
Slide 4: Business Highlights
BUSINESS HIGHLIGHTS Sales improvement continued Digital sales remained strong at 60% in Development has restarted with a focus through the quarter and into fiscal third quarter, with company's own on expanded formats including drive- October with all regions showing channels (app and web combined) t
Slide 5: Fiscal October Snapshot
F I S C A L O C TO B E R 2 0 2 0 S N A P S H O T (21%) YoY (4%) $62K Decrease in Decrease in suburban same-Shack Average weekly sales same-Shack sales1, showing sales with suburban locations representing sixth month of continued improvement from Q3 recovering faster than urban 2 sequential improveme
Slide 6: Average Weekly Sales Continue Steady Recovery
AV E R A G E W E E K LY S A L E S C O N T I N U E S T E A D Y R E C O V E RY Average weekly sales1 sequentially improved throughout the third quarter and into fiscal October; same-Shack sales also continue to improve significantly. Recovery supported by gradual return of in-Shack sales and high leve
Slide 7: Sales Recovering Across the System with Suburban Shacks at Faster Pace
SALES RECOVERING ACROSS THE SYSTEM WITH S U B U R B A N S H A C K S AT A FA S T E R PA C E Suburban Shacks continue to recover more quickly than their urban counterparts which are more acutely impacted by the pandemic, but both have shown strong improvements in recent months THIRD QUARTER 2020 SAME-
Slide 8: Strong Recovery Continues Regionally from Q2; NYC Remains Drag
S T R O N G R E C O V E RY C O N T I N U E S R E G I O N A L LY F R O M Q2; NYC REMAINS DRAG ON OVERALL PERFORMANCE THIRD QUARTER 2020 SAME-SHACK SALES VS PRIOR YEAR NYC (including Manhattan) -49% Manhattan -60% Northeast -18% Southeast -25% Midwest Prior Year Same-Shack Sales $ -36% Current Year Sa
Slide 9: All Regions Showing Sequential Improvement Compared to Q3
ALL REGIONS SHOWING SEQUENTIAL IMPROVEMENT C O M PA R E D TO Q 3 FISCAL OCTOBER 2020 SAME-SHACK SALES VS PRIOR YEAR NYC (including Manhattan) -40% Manhattan -51% Northeast -8% Southeast -13% Midwest Prior Year Same-Shack Sales $ -23% Current Year Same-Shack Sales $ West -19% The regions of domestic
Slide 10: Licensed Shack Sales Showing Continued Sequential Improvement
LICENSED SHACK SALES SHOWING CONTINUED SEQUENTIAL IMPROVEMENT Licensed Shack Sales showing improvement with markets such as China recovering to above pre-COVID sales levels. Domestic airport & stadium licensed Shacks remain heavily impacted with only 9 of 22 Shacks open as of fiscal October Licensed
Slide 11: Domestic Development Returning to Full Schedule in 2021
D O M E S T I C D E V E L O P M E N T R E T U R N I N G TO F U L L S C H E D U L E I N 2 0 2 1 W I T H 3 5 TO 4 0 O P E N I N G S P L A N N E D Domestic company-operated Shacks (At Fiscal Year End) 216-223 Expecting to open 18 to 20 total new company- 181-183 operated Shacks in 2020 following a Q2/Q
Slide 12: Digital Sales Remains Strong with Over 90% Retention Since Fiscal May
D I G I TA L S A L E S R E M A I N S T R O N G W I T H O V E R 9 0 % R E T E N T I O N S I N C E F I S C A L M AY Digital sales1 continue to represent the majority of total sales through the third quarter and into fiscal October with over 90% retention since May; 1.4M first time app & web purchasers
Slide 13: Digital Innovation Remains Key Component of Ongoing Growth Strategy
D I G I TA L I N N O VAT I O N R E M A I N S K E Y C O M P O N E N T O F O N G O I N G G R O W T H S T R AT E G Y • Digital experience elevation remains a priority with focus on convenience, speed and accessibility • Digital ordering tools becoming a more integrated part of physical Shack design wit
Slide 14: Curbside Pickup Capability Rolled Out in Nearly 70 Shacks
C U R B S I D E P I C K U P C A PA B I L I T Y R O L L E D O U T I N N E A R LY 7 0 S H A C K S A C R O S S T H E C O U N T RY The curbside pickup model was created and Since launch, Shacks offering curbside This model will continue to evolve and executed in less than three months to solve have a th
Slide 15: Shack Track Development Gaining Momentum
SHACK TRACK DEVELOPMENT GAINING MOMENTUM Shack Track provides convenience in digital pre-ordering, combined with a fast and frictionless experience at pickup. The models aid in-Shack social distancing, but also serve guests looking for speed and convenience on the go in a post-COVID environment Thro
Slide 16: Five to Eight Shake Shack Drive-Thrus Planned in Next 24 Months
F I V E TO E I G H T S H A K E S H A C K D R I V E - T H R U S P L A N N E D TO O P E N I N N E X T 2 4 M O N T H S • First drive-thru location planned to open in late 2021. Targeting five to eight drive-thrus over next 24 months • The Shake Shack drive-thru will be a modern version of the tradition
Slide 17: Culinary Innovation
C U L I N A RY I N N O VAT I O N After an initial focus on menu-simplification in response to COVID, a rotating LTO calendar recommenced in the third quarter, with a culinary calendar that includes bold new chicken flavors, further testing of the VeggieShack burger, and planned innovation around bev
Slide 18: Financial Details
FINANCIAL DETAILS Strategic Plan Update Board of Directors Meeting| Q1 2020
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: Income Statement
I N C O M E S TAT E M E N T Thirteen Weeks Ended Thirty-Nine Weeks Ended September 23, 2020 September 25, 2019 September 23, 2020 September 25, 2019 Shack sales $ 126,288 96.8% $ 152,366 96.6% $ 353,855 96.9% $ 428,811 96.8% Licensing revenue 4,113 3.2% 5,396 3.4% 11,502 3.1% 14,273 3.2% TOTAL REVEN
Slide 21: 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 22: 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 Thirty-Nine Weeks Ended (dollar amount in thousands) September 23, 2020 September 25, 2019 September 23, 2020 September 25, 2019 Operating income (loss) $ (6,798) $ 8,164 $ (31,660) $ 25,197 Less: Licensing revenue 4,113 5,396 1
Slide 23: 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 benefit (expense) an
Slide 24: Adjusted EBITDA
ADJUSTED EBITDA Thirteen Weeks Ended Thirty-Nine Weeks Ended (1) Represents amortization of capitalized implementation (dollar amounts in thousands) September 23, 2020 September 25, 2019 September 23, 2020 September 25, 2019 costs related to cloud-based software arrangements Net income (loss) $ (6,1
Slide 25: 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 Thirty-Nine Weeks Ended September 23, 2020 September 23, 2020 Income Tax Income Before Effective Tax Income Tax Income Before Effective (dollar amounts in thousands) Expense Income Taxes Rate Expense Income Ta
Slide 26: 2019 Adjusted Pro Forma Effective Tax Rate
2 0 1 9 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 Thirty-Nine Weeks Ended September 25, 2019 September 25, 2019 Income Tax Income Before Effective Tax Income Tax Income Before Effective (dollar amounts in thousands) Expense Income Taxes Rate Expense Income Ta
Slide 27: 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 646-747-8776 kclark@shakeshack.com Strategic Plan Update Board of Directors Meeting| Q1 2020 27