Shake Shack, Inc. · NYSE:SHAK
Shake Shack — Q3 2021 Earnings Presentation
28 slides from Shake Shack's earnings presentation, Nov 4, 2021
Slide 1: Third Quarter Earnings Supplemental
THIRD QUARTER EARNINGS SUPPLEMENTAL NOVEMBER 4, 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, "will," "should," "can," "can have," "likely," the negatives thereof and other similar expressions. All forward-looking statements are expressly qualified in their ent
Slide 3: Q3 2021 Results
Q 3 2 0 2 1 R E S U LT S Total Revenue: Shack system-wide sales1: Same-Shack Sales versus 20202,3: $193.9M $298.6M +24.8% +48.7% YoY +53.1% YoY (7.3%) SSS versus 2019 Shack-level operating profit4: Adjusted EBITDA5: $29.6M $15.8M 15.8% of Shack sales 8.2% of Total Revenue 1. “Shack system-wide sales
Slide 4: Business Highlights
BUSINESS HIGHLIGHTS 3Q Sales Outpaced Seasonality SSS vs 2019 Improved: Profitability Pressures: Despite COVID and Weather: SSS for Q3 down ~7% vs Realized 330 bps of impact COVID and weather impacts triggered 2019, an improvement from to Shack-level operating ~100 days of closures that amounted Q2
Slide 5: Fiscal October 2021 Snapshot
FISCAL OCTOBER 2021 SNAPSHOT S A L E S O U T PA C E D S E A S O N A L I T Y A N D N E A R LY C L O S E D T H E G A P T O 2 0 1 9 Continued Sales Strength: SSS vs 2019 Improvement: SSS vs 2020 Recovery: $70K (1%) 18% Fiscal October Average Weekly Fiscal October SSS versus Increase in fiscal October 2
Slide 6: AWS Outpaced Historical Seasonality
AW S O U T PA C E D H I S T O R I C A L S E A S O N A L I T Y O C T O B E R AV E R A G E W E E K LY S A L E S R O S E M o M Q3’21 AWS $72K $85K $84K $84K AWS $79K 2019 AWS $75K $74K $74K $73K $72K $69K $70K $64K $62K $58K $45K Total YoY Shack (39%) (17%) (3%) 9% 103% 62% 50% 37% 34% Sales Growth / (
Slide 7: Q3 SSS Improvement Led by Broad-Based Recovery
Q 3 S S S I M P R O V E M E N T L E D B Y B R O A D B A S E D R E C O V E RY SUBURBAN SSS GREW EVEN AS MORE GUESTS RETURNED TO URBAN SHACKS URBAN/SUBURBAN1 SAME-SHACK SALES VS PRIOR YEAR AND 20192 Second Third Fourth First Second Fiscal Fiscal Fiscal Fiscal Quarter Quarter Quarter Quarter Quarter Ju
Slide 8: Suburban Leading Development Across Diverse Formats
SUBURBAN LEADING DEVELOPMENT ACROSS DIVERSE F O R M AT S ; 4 5 - 5 0 C O M PA N Y- O P E R AT E D S H A C K S I N 2 0 2 2 F R E E S TA N D I N G B U I L D I N G S | SHOPPING CENTERS | REGIONAL MALLS | OUTLET MALLS Oak Lawn, IL - Freestanding with Suburban Square, PA – Outdoor Shack Track Drive Up Sh
Slide 9: SSS Performance Varied Across Regions
S S S P E R F O R M A N C E VA R I E D A C R O S S R E G I O N S N Y C A N D M A N H AT T A N D R O V E S I G N I F I C A N T I M P R O V E M E N T ; S O U T H E A S T S AW G R E AT E R C O V I D & W E AT H E R P R E S S U R E S I N Q 3 REGIONAL1 SAME-SHACK SALES 2 VS PRIOR YEAR3 Second Third Fourth
Slide 10: Digital Sales Retention Holds
D I G I TA L S A L E S R E T E N T I O N H O L D S AT ~ 8 0 % 1 , 2 A D D E D ~ 1 4 % N E W P U R C H A S E R S I 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 Q o Q ; 3 . 2 M T O TA L P U R C H A S E R S A C Q U I R E D S I N C E M A R C H 2 0 2 0 In-Shack Sales $ Q3 Digital Mix 42% Digit
Slide 11: Digital Hospitality Meets Guests Online and In-Shack
D I G I TA L H O S P I TA L I T Y M E E T S G U E S T S O N L I N E A N D I N - S H A C K OFFERING A TRUE OMNICHANNEL GUEST EXPERIENCE W E B S I T E R E D E S I G N | D I G I TA L & K I O S K | A P P - O N LY LT O L A U N C H Shacks with kiosks generate 75% of sales through kiosk and other digital c
Slide 12: Class of 2021 Features New, Convenient Formats
C L A S S O F 2 0 2 1 F E AT U R E S N E W, C O N V E N I E N T F O R M AT S SHACK TRACK DRIVE UP WINDOWS | FIRST DRIVE THRU COMING DECEMBER 2021 Shack Track Drive Up Drive Thru Rendering Window at Oak Lawn, IL 2020 Strategic Plan Meeting of the Board of Directors | Q4 2019 12
Slide 13: Total Licensed Sales Rose YoY
TO TA L L I C E N S E D S A L E S R O S E 6 1 % Y O Y BENEFITED FROM STRONG NEW OPENINGS AND EASING COVID RESTRICTIONS $111.6M $100.4M Total Licensed Sales 1 $79.1M $77.6M $69.2M $35.0M Total YoY Licensed Sales (55%) (20%) (11%) (6%) 187% 61% Growth / (Decline) Second Quarter Third Quarter Fourth Qu
Slide 14: Licensed Business Brings Shake Shack Worldwide
LICENSED BUSINESS BRINGS SHAKE SHACK WORLDWIDE OPENED 21 SHACKS THROUGH FISCAL OCTOBER, WITH ~25 EXPECTED FY 2021; DEVELOPMENT PLANS WILL INCREASE PRESENCE ACROSS NEW AND EXISTING MARKETS First Shack opened in Hangzhou, China First Shack opened in Monterrey, Mexico 2020 Strategic Plan Meeting of the
Slide 15: Breakthrough Brand Moments in LTO Marketing
B R E A K T H R O U G H B R A N D M O M E N T S I N LT O M A R K E T I N G C U L I N A R Y M A R K E T I N G C A M PA I G N S E N G A G E C U S T O M E R S W I T H C O L L A B O R AT I O N S AND LIMITED TIME OFFERS 2020 Strategic Plan Meeting of the Board of Directors | Q4 2019 15
Slide 16: Margin Pressure to Continue for Foreseeable Future
MARGIN PRESSURE TO CONTINUE FOR FORESEEABLE FUTURE L A B O R I N V E S T M E N T S A N D S U P P LY C H A I N I N F L AT I O N L I K E LY T O P E R S I S T I N T O 2 0 2 2 Impacts include ~200 bps from planned wage and retention bonus increases and ~130 bps from chicken and beef inflation. 16% High
Slide 17: 2021 Outlook
2021 OUTLOOK Q4 2021 Guidance Total revenue $193.5M to $200M Fiscal fourth quarter and fiscal year Shack sales $187M to $193M 2021 guidance is derived from recent Licensed revenue $6.5M to $7.0M trends and does not assume material changes to the current operating Same-Shack sales versus 2020 + mid t
Slide 18: Financial Details
FINANCIAL DETAILS 2020 Strategic Plan Meeting Board of the ofBoard Directors of Directors Meeting| | Q1 Q4 2020 2019
Slide 19: 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 20: Income Statement
I N C O M E S TAT E M E N T Thirteen Weeks Ended Thirty-Nine Weeks Ended September 29, 2021 September 23, 2020 September 29, 2021 September 23, 2020 Shack sales $ 186,972 96.4 % $ 126,288 96.8 % $ 519,110 96.7 % $ 353,855 96.9 % (1) As a percentage of Shack sales. Licensing revenue 6,923 3.6 % 4,113
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 operating results that are directly impacted by the Shacks and exclude items that may Shack-level operating profit is defined as Shack sales less Shack-level operating not be indicative of, or are u
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 amounts in thousands) September 29 ,2021 September 23, 2020 September 29, 2021 September 23, 2020 Loss from Operations $ (2,646) $ (6,798) $ (9,360) $ (31,660) Less: Licensing revenue 6,923 4,113
Slide 23: Adjusted EBITDA Definitions
ADJUSTED EBITDA DEFINITIONS EBITDA and Adjusted EBITDA How These Measures Are Useful EBITDA is defined as Net income (loss) before interest expense (net of interest When used in conjunction with GAAP financial measures, EBITDA and adjusted income), Income tax expense (benefit) and Depreciation and a
Slide 24: Adjusted EBITDA
ADJUSTED EBITDA Thirteen Weeks Ended Thirty-Nine Weeks Ended (dollar amounts in thousands) September 29, 2021 September 23, 2020 September 29, 2021 September 23, 2020 Net income (loss) $ (2,402) $ (6,110) $ 238 $ (25,220) (1) Represents amortization of capitalized implementation costs related to clo
Slide 25: 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 26: 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 Fiscal Year Ended September 29, 2021 September 29, 2021 Income Tax Income (Loss) Expense Before Income Effective Tax Income Tax Income Before Effective (dollar amounts in thousands) (Benefit) Taxes Rate Expens
Slide 27: 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 Fiscal Year Ended September 23, 2020 September 23, 2020 Income Tax Income (Loss) Expense Before Income Effective Tax Income Tax Income Before Effective (dollar amounts in thousands) (Benefit) Taxes Rate Expens
Slide 28: 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