Shake Shack, Inc. · NYSE:SHAK
Shake Shack — Q4 2020 Earnings Presentation
30 slides from Shake Shack's earnings presentation, Feb 25, 2021
Slide 1: Fourth Quarter Earnings Supplemental
FOURTH QUARTER EARNINGS SUPPLEMENTAL FEBRUARY 25, 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: Full Year 2020 Results
F U L L Y E A R 2 0 2 0 R E S U LT S $523M $779M (27.8%) FY 2020 Total Revenue Shack system-wide sales1 Decrease in FY same-Shack sales2 $71.4M $22.7M Shack-level operating profit3 Adjusted EBITDA4 14.1% of Shack sales 4.3% of Total Revenue 1. “Shack system-wide sales” is an operating measure and co
Slide 4: Q4 2020 Results
Q 4 2 0 2 0 R E S U LT S $158M $238M (17.4%) Q4 Total Revenue Shack system-wide sales1 Decrease in Q4 same-Shack sales3, compared to (31.7%) in Q3 $24.4M $9.2M Shack-level operating profit4 Adjusted EBITDA3 16.0% of Shack sales 5.8% of Total Revenue 1. “Shack system-wide sales” is an operating measu
Slide 5: Business Highlights
BUSINESS HIGHLIGHTS Sequential comp sales Fiscal year to date through third week in Company-operated development improvement continued through February 2021 company owned app and schedule accelerating with 35-40 fiscal January 2021; all regions web channels grew ~300% YoY; over 2 openings planned fo
Slide 6: Average Weekly Sales (AWS) Trend
AV E R A G E W E E K LY S A L E S 1 ( AW S ) T R E N D J A N U A R Y M O M E N T U M C O N T I N U E D ; F E B R U A R Y S A L E S S I G N I F I C A N T LY I M PA C T E D B Y S E V E R E W I N T E R W E AT H E R A C R O S S T H E C O U N T R Y R E S U LT I N G I N R E D U C E D O P E R AT I N G H O
Slide 7: Suburban Recovery Continues to Outpace Urban
S U B U R B A N R E C O V E RY C O N T I N U E S T O O U T PA C E U R B A N S U B U R B AN S H AC K S D E L I V E R E D G R O W T H I N F I S C AL J AN U ARY ; F I S C AL F E B R U ARY WAS N E G AT I V E LY I M PA C T E D B Y S E V E R E W I N T E R W E AT H E R URBAN/SUBURBAN1 SAME-SHACK SALES2 VS
Slide 8: Regional Improvements Continued Through January
R E G I O N A L I M P R O V E M E N T S C O N T I N U E D T H R O U G H J A N U A RY C A L I F O R N I A I M P A C T E D B Y S T AY - A T - H O M E O R D E R S I N F I S C A L J A N U A R Y ; A L L R E G I O N S I M PA C T E D B Y C L O S U R E S D U E T O C H A L L E N G I N G W E AT H E R C O N D
Slide 9: Licensed Recovery Slowed in January
L I C E N S E D R E C O V E RY S L O W E D I N J A N U A RY D U E T O I N C R E A S E D COVID RESTRICTIONS IN THE UK, ASIA & THE MIDDLE EAST B E G I N N I N G T O R E B O U N D I N F E B R U A RY A S A S I A L A P S I N I T I A L C O V I D I M PA C T S 13% Licensed 1 Weekly Sales (9%) (7%) (10%) (10
Slide 10: Digital Sales Mix Continues to Be Strong
D I G I TA L S A L E S 1 M I X C O N T I N U E S T O B E S T R O N G W I T H C O M PA N Y- O W N E D C H A N N E L S U P ~ 3 0 0 % Q T D V S P R I O R Y E A R W I N T E R W E AT H E R L E D T O H I G H E R D E L I V E R Y S A L E S I N Q 4 / E A R LY Q 1 ; C O M PA N Y - O W N E D APP & WEB ACQUIRED
Slide 11: Accelerated Development Plans Underway
A C C E L E R AT E D D E V E L O P M E N T P L A N S U N D E R WAY ; ~ 4 5 % D O M E S T I C C O M PA N Y- O P E R AT E D U N I T G R O W T H P L A N N E D O V E R THE NEXT TWO YEARS Targeting 35-40 openings in fiscal 2021 262-272 and 45-50 openings in fiscal 2022 4 new Shacks opened to date in 2021
Slide 12: Targeting >170 Total Licensed Shacks by End of 2022
TA R G E T I N G > 1 7 0 T O TA L L I C E N S E D S H A C K S B Y E N D O F 2 0 2 2 F O C U S O N A S I A ; E V O LV I N G D E S I G N I N C O R P O R AT E S S H A C K T R A C K C O N V E N I E N C E Targeting 15-20 openings in 2021 163-173 and 20-25 in 2022 across mainland 143-148 China, Mexico and
Slide 13: Licensed Development Targeting ~20 Openings in 2021
L I C E N S E D D E V E L O P M E N T TA R G E T I N G 1 5 - 2 0 O P E N I N G S I N 2 0 2 1 N E W S H A C K S W I L L I N C R E A S I N G LY I N C O R P O R AT E S H A C K T R A C K F E AT U R E S Motor City, Dubai opened Feb 2021 with both curbside and a walk-up window 2020 Strategic Plan Meeting
Slide 14: 2021 Outlook
2021 OUTLOOK G I V E N T H E S U B S TA N T I A L U N C E R TA I N T Y A N D R E S U LT I N G M AT E R I A L E C O N O M I C I M PA C T C A U S E D B Y T H E C O V I D - 1 9 PA N D E M I C , F U L L G U I D A N C E F O R T H E F I S C A L Y E A R E N D I N G DECEMBER 29, 2021 WILL NOT BE PROVIDED •
Slide 15: Shack Track Convenience Being Integrated Into New and Existing Shacks
S H A C K T R A C K C O N V E N I E N C E B E I N G I N T E G R AT E D I N T O B O T H NEW AND EXISTING SHACKS Pre-order digitally and pickup your shack… …inside, contact-free …outside, at a window …in your car, through a drive- up lane SHACKS WILL CONTINUE TO ENHANCE PICKUP 13 SHACK TRACK WALK-UP W
Slide 16: Digital Products Evolving to Support the Guest Experience
D I G I TA L P R O D U C T S E V O LV I N G T O F U R T H E R S U P P O R T A N D ENHANCE THE GUEST EXPERIENCE CURBSIDE PICKUP ENABLED AT ~70 SHACKS TODAY IN-APP DELIVERY IN PLACE MOBILE-FIRST WEB REDESIGN IN H2 2021 FOR NEARLY 50% OF GUESTS CHOOSE CURBSIDE ACROSS MORE THAN 100 SHACKS; ENHANCED USER
Slide 17: LTOs to Drive Engagement
LT O ' S T O D R I V E E N G A G E M E N T I N 2 0 2 1 C O N T I N U E D F O C U S O N E L E VAT E D , M O D E R N , F U N V E R S I O N S O F T H E C L A S S I C S 2020 Strategic Plan Meeting of the Board of Directors | Q4 2019 17 17
Slide 18: Investing in Our Teams to Drive Growth
INVESTING IN OUR TEAMS TO DRIVE GROWTH Culture Salary & Benefits Career Development Awarded 100% score for third year in a row on Human Paid out close to $6M in additional pay to our Shack Launched the Shift Up Education Program to progress Rights Campaign’s Corporate Equality Index, for team member
Slide 19: Stand For Something Good & Our Commitment to ESG
S TA N D F O R S O M E T H I N G G O O D & O U R C O M M I T M E N T T O E S G IN ALL AREAS OF THE BUSINESS INCLUDING MENU AND SOURCING, SUPPORTING OUR TEAM, C O M M U N I T Y E N G A G E M E N T, O P E R A T I O N S A N D C O R P O R A T E G O V E R N A N C E Environmental Social Governance Hormone
Slide 20: Financial Details
FINANCIAL DETAILS 2020 Strategic Plan Meeting Board of theofBoard Directors of Directors Meeting| | Q4 Q1 2019 2020
Slide 21: 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 22: Income Statement
I N C O M E S TAT E M E N T Fiscal Quarter Ended Fiscal Year Ended December 30, 2020 (1) December 25, 2019 December 30, 2020 (1) December 25, 2019 Shack sales $ 152,484 96.8% $ 145,814 96.3% $ 506,339 96.8% $ 574,625 96.7% Licensing revenue 5,026 3.2% 5,621 3.7% 16,528 3.2% 19,894 3.3% TOTAL REVENUE
Slide 23: 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 24: 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 Fiscal Quarter Ended Fiscal Year Ended (1) (dollar amount in thousands) December 30, 2020 December 25, 2019 December 30, 2020 (1) December 25, 2019 Operating income (loss)(2) $ (12,216) $ 488 $ (43,876) $ 25,685 Less: Licensing revenue 5,026 5,621 1
Slide 25: 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 and deprecia
Slide 26: Adjusted EBITDA
ADJUSTED EBITDA Fiscal Quarter Ended Fiscal Year Ended (1) The Company operates on a 52/53 week fiscal year that ends on the last (dollar amounts in thousands) December 30, 2020 (1) December 25, 2019 December 30, 2020 (1) December 25, 2019 Wednesday of the calendar year. Fiscal year 2020 was a 53-we
Slide 27: 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 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 Fiscal Quarter Ended Fiscal Year Ended December 30, 2020 December 30, 2020 Income Tax Income Before Effective Tax Income Tax Income Before Effective (dollar amounts in thousands) Expense Income Taxes Rate Expense Income Taxes Tax
Slide 29: 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 Fiscal Quarter Ended Fiscal Year Ended December 25, 2019 December 25, 2019 Income Tax Income Before Effective Tax Income Tax Income Before Effective (dollar amounts in thousands) Expense Income Taxes Rate Expense Income Taxes Tax
Slide 30: 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 30