What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-02 compared with 2024-05-03 · 221 added, 184 removed, 284 unchanged (59% of the section changed)

7 unchanged sentences

You should evaluate all forward-looking statements made in this Form 10-Q in the context of the risks and uncertainties disclosed in our Annual Report on Form 10-K for the fiscal year ended December 27, 2023 ("2023 Form 10-K").

26 | Shake Shack Inc.

The forward-looking statements included in this Form 10-Q are made only as of the date hereof.

17 unchanged sentences

The Company does not recognize the sales from licensed Shacks as revenue.

Of these amounts, revenue is limited to licensing

Of these amounts, revenue is limited to licensing revenue based on a percentage of sales from licensed Shacks, as well as certain up-front fees, such as territory fees and opening fees.

Key Operating Metrics

Same-Shack sales for the thirteen weeks ended June 26, 2024 increased 4.0% compared to the same period last year, driven by a 4.8% increase in price mix partially offset by a 0.8% decline in guest traffic.

Same-Shack sales for the twenty-six weeks ended June 26, 2024 increased 2.8% compared to the same period last year, driven by a 4.2% increase in price mix partially offset by a 1.4% decline in guest traffic.

For the purpose of calculating same-Shack sales for the thirteen and twenty-six weeks ended June 26, 2024, Shack sales for 228 Shacks were included in the comparable Shack base.

Average weekly sales were $77,000 and $75,000, respectively, for the thirteen and twenty-six weeks ended June 26, 2024, which were flat compared to the same periods last year, primarily driven by higher menu prices, partially offset by a decline in guest traffic and menu mix.

System-wide sales for the thirteen weeks ended June 26, 2024 increased 13.5% to $483.7 million compared to the same period last year.

System-wide sales for the twenty-six weeks ended June 26, 2024 increased 12.9% to $927.0 million compared to the same period last year.

Digital sales for the thirteen weeks ended June 26, 2024 increased 20.9% to $105.1 million compared to the same period last year.

Digital sales for the twenty-six weeks ended June 26, 2024 increased 18.1% to $208.3 million compared to the same

Shake Shack Inc.

Form 10-Q | 27

revenue based on a percentage of sales from licensed Shacks, as well as certain up-front fees, such as territory fees and opening fees.

Key Operating Metrics

Same-Shack sales for the thirteen weeks ended March 27, 2024 increased 1.6% compared to the same period last year, driven by a 3.7% increase in price mix partially offset by a 2.1% decrease in guest traffic.

For the purpose of calculating same-Shack sales for the thirteen weeks ended March 27, 2024, Shack sales for 224 Shacks were included in the comparable Shack base.

Average weekly sales were $73,000 for the thirteen weeks ended March 27, 2024, which was flat compared to the same period last year, primarily driven by higher menu prices, partially offset by a decline in guest traffic.

System-wide sales for the thirteen weeks ended March 27, 2024 increased 12.3% to $443.3 million compared to the same period last year.

Digital sales for the thirteen weeks ended March 27, 2024 increased 15.3% to $103.2 million compared to the same period last year.

Digital sales includes orders placed on the Shake Shack app, website and third-party delivery platforms, which represented 36.8% of Shack sales during the thirteen weeks ended March 27, 2024.

period last year.

Digital sales includes orders placed on the Shake Shack app, website and third-party delivery platforms, which represented 34.4% and 35.5%, respectively, of Shack sales during the thirteen and twenty-six weeks ended June 26, 2024.

Development Highlights

During the thirteen weeks ended March 27, 2024, we opened four new Company-operated Shacks and four new licensed Shacks.

There was one permanent licensed Shack closure in the first quarter of 2024.

The following table presents the Shacks opened during the thirteen weeks ended March 27, 2024:

During the thirteen weeks ended June 26, 2024, we opened 12 new Company-operated Shacks and 11 new licensed Shacks.

There was one permanent licensed Shack closure in the second quarter of 2024.

The following table presents the Shacks opened during the thirteen weeks ended June 26, 2024:

Location Type Opening Date

Nanjing, China — Nanjing IFC Licensed 1/3/2024

North Brunswick Township, NJ — North Brunswick Company-operated 1/10/2024

Seoul, Korea — Yeouido Licensed 1/12/2024

Vienna, VA — Pike 7 Company-operated 2/20/2024

Tel Aviv, Israel — Dizengoff Licensed 2/27/2024

Santa Rosa, CA — Montgomery Village Company-operated 2/28/2024

Bloomingdale, IL — Bloomingdale Company-operated 3/7/2024

Muharraq, Bahrain — Marassi Galleria Mall Licensed 3/14/2024

As of March 27, 2024, there were 525 Shacks in operation system-wide, of which 299 were Company-operated Shacks and 226 were licensed Shacks.

New York, NY — Penn Station Company-operated 3/28/2024

Dubai, UAE — Mirdif City Centre Licensed 4/5/2024

Scottsdale, AZ — Salt River Company-operated 4/10/2024

Kuala Lumpur, Malaysia — The Exchange TRX Licensed 4/10/2024

Tokyo, Japan — Joule Shibuya Licensed 4/13/2024

Newington, CT — Newington Company-operated 4/24/2024

Deerfield, IL — Deerfield Company-operated 4/25/2024

Foshan, China — Lingnan Tiandi Licensed 4/29/2024

Costa Mesa, CA — Costa Mesa Company-operated 5/8/2024

Shanghai, China — Kerry Parkside Licensed 5/11/2024

Pittsburgh, PA — The Terminal Company-operated 5/19/2024

Stamford, CT — Stamford Company-operated 5/22/2024

Wellesley, MA — Wellesley Company-operated 5/29/2024

Midlothian, VA — Midlothian Company-operated 5/29/2024

Secaucus, NJ — Secaucus Company-operated 6/9/2024

London, United Kingdom — St.

Pancras Station Licensed 6/11/2024

Pasay, Philippines — NAIA Terminal 3 Licensed 6/11/2024

Mexico City, Mexico — Interlomas Licensed 6/12/2024

Toronto, Canada — Yonge and Dundas Licensed 6/13/2024

Seoul, South Korea — Dogok Licensed 6/14/2024

Bellevue, WA — Bellevue Square Company-operated 6/17/2024

Freehold, NJ — Freehold Company-operated 6/23/2024

Sloatsburg, NY — Ramapo Travel Plaza Licensed 6/26/2024

As of June 26, 2024, there were 547 Shacks in operation system-wide, of which 311 were Company-operated Shacks and 236 were licensed Shacks.

28 | Shake Shack Inc.

RESULTS OF OPERATIONS

The following table summarizes our results of operations for the thirteen weeks ended March 27, 2024 and March 29, 2023:

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

The following table summarizes our results of operations for the thirteen and twenty-six weeks ended June 26, 2024 and June 28, 2023:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Shack sales $ 305,480 96.5 % $ 261,810 96.3 % $ 586,032 96.5 % $ 506,064 96.4 %

4 unchanged sentences

Labor and related expenses

86,614 28.4 % 75,158 28.7 % 168,123 28.7 % 149,422 29.5 %

Other operating expenses 43,953 14.4 % 36,109 13.8 % 85,809 14.6 % 71,045 14.0 %

1 unchanged sentence

General and administrative expenses

36,313 11.5 % 31,476 11.6 % 72,257 11.9 % 62,787 12.0 %

Depreciation and amortization expense 25,496 8.1 % 22,252 8.2 % 50,937 8.4 % 43,574 8.3 %

2 unchanged sentences

TOTAL EXPENSES 305,714 96.6 % 267,057 98.3 % 596,184 98.2 % 523,524 99.7 %

INCOME (LOSS) FROM OPERATIONS 34 — % (3,189) (1.3) %

INCOME FROM OPERATIONS 10,782 3.4 % 4,748 1.7 % 10,816 1.8 % 1,559 0.3 %

Other income, net 3,300 1.0 % 3,227 1.2 % 6,506 1.1 % 6,064 1.2 %

Interest expense (527) (0.2) % (405) (0.1) % (1,035) (0.2) % (808) (0.2) %

INCOME (LOSS) BEFORE INCOME TAXES 2,732 0.9 % (755) (0.3) %

INCOME BEFORE INCOME TAXES 13,555 4.3 % 7,570 2.8 % 16,287 2.7 % 6,815 1.3 %

Income tax expense 3,173 1.0 % 347 0.1 % 3,691 0.6 % 1,214 0.2 %

NET INCOME (LOSS) 2,214 0.8 % (1,622) (0.6) %

Net income (loss) attributable to non-controlling interests 174 0.1 % (88) — %

NET INCOME (LOSS) ATTRIBUTABLE TO SHAKE SHACK INC.

NET INCOME 10,382 3.3 % 7,223 2.7 % 12,596 2.1 % 5,601 1.1 %

Net income attributable to non-controlling interests 714 0.2 % 275 0.1 % 888 0.1 % 187 — %

NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC.

$ 9,668 3.1 % $ 6,948 2.6 % $ 11,708 1.9 % $ 5,414 1.0 %

2 unchanged sentences

Shack sales in any period are directly influenced by the number of operating weeks in such period and the total number of open Shacks.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Shack sales $ 305,480 $ 261,810 $ 586,032 $ 506,064

Percentage of Total revenue 96.5 % 96.3 % 96.5 % 96.4 %

96.6 % 96.4 %

Dollar change compared to prior year $ 43,670 $ 79,968

Percentage change compared to prior year 16.7 % 15.8 %

Shack sales for the thirteen weeks ended March 27, 2024 increased 14.9% to $280.6 million versus the same period last year.

The increase was primarily due to the opening of 39 new Company-operated Shacks between March 29, 2023 and March 27, 2024 which contributed $34.5 million and an increase in menu prices partially offset by a decline in guest traffic.

Shack sales for the thirteen weeks ended June 26, 2024 increased 16.7% to $305.5 million versus the same period last year.

The increase was primarily due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024, which contributed $32.1 million, as well as increased menu prices, which contributed $18.3 million, partially offset by menu mix, mainly related to strategic investments in marketing.

Shake Shack Inc.

Form 10-Q | 29

Shack sales for the twenty-six weeks ended June 26, 2024 increased 15.8% to $586.0 million versus the same period last year.

The increase was primarily due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024, which contributed $57.0 million, as well as increased menu prices, which contributed $22.0 million.

Licensing Revenue

Licensing revenue is comprised of license fees and opening and territory fees for certain licensed Shacks.

Licensing revenue is comprised of license fees and opening fees and territory fees for certain licensed Shacks.

License fees are calculated as a percentage of sales and territory fees are payments for the exclusive right to develop Shacks in a specific geographic area.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Licensing revenue $ 11,016 $ 9,995 $ 20,968 $ 19,019

2 unchanged sentences

Percentage change compared to prior year 10.2 % 10.2 %

Licensing revenue for the thirteen weeks ended March 27, 2024 increased 10.3% to $10.0 million versus the same period last year.

The increase was primarily due to the opening of 37 net new licensed Shacks between March 29, 2023 and March 27, 2024 which contributed $1.6 million to Licensing revenue, partially offset by a decline in sales at existing licensed Shacks, primarily in China and the Middle East.

Licensing revenue for the thirteen weeks ended June 26, 2024 increased 10.2% to $11.0 million versus the same period last year.

Licensing revenue for the twenty-six weeks ended June 26, 2024 increased 10.2% to $21.0 million versus the same period last year.

The increases in Licensing revenue for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to the opening of 35 net new licensed Shacks between June 28, 2023 and June 26, 2024, which contributed $1.3 million and $2.4 million, respectively, as well as higher sales at existing domestic licensed Shacks, partially offset by a decline in sales in China.

Food and Paper Costs

1 unchanged sentence

The components of Food and paper costs are variable by nature, change with sales volume, impacted by menu mix, channel mix and fluctuations in commodity costs, as well as geographic scale and proximity.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Food and paper costs $ 85,053 $ 75,800 $ 165,306 $ 147,572

2 unchanged sentences

Percentage change compared to prior year 12.2 % 12.0 %

Food and paper costs for the thirteen weeks ended March 27, 2024 increased 11.8% to $80.3 million versus the same period last year.

The increase was primarily due to the opening of 39 new Company-operated Shacks between March 29, 2023 and March 27, 2024, which contributed approximately $9.0 million.

As a percentage of Shack sales, the decrease in Food and paper costs for the thirteen weeks ended March 27, 2024 was primarily driven by menu price increases partially offset by the increases in commodities costs, mainly beef and fries and increases in marketing promotions.

Food and paper costs for the thirteen weeks ended June 26, 2024 increased 12.2% to $85.1 million versus the same period last year.

Food and paper costs for the twenty-six weeks ended June 26, 2024 increased 12.0% to $165.3 million versus the same period last year.

The increases for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024, which contributed approximately $9.4 million and $17.3 million, respectively.

As a percentage of Shack sales, the decreases in Food and paper costs for the thirteen and twenty-six weeks ended June 26, 2024 were primarily driven by menu price increases partially offset by increases in certain commodity costs, mainly beef and increases in marketing promotions.

30 | Shake Shack Inc.

Labor and Related Expenses

2 unchanged sentences

Factors that influence labor costs include minimum wage and payroll tax legislation, health care costs, size and location of the Shack and the performance of our Company-operated Shacks.

28 | Shake Shack Inc.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Labor and related expenses $ 86,614 $ 75,158 $ 168,123 $ 149,422

2 unchanged sentences

Percentage change compared to prior year 15.2 % 12.5 %

Labor and related expenses for the thirteen weeks ended March 27, 2024 increased 9.8% to $81.5 million versus the same period last year.

The increase was primarily due to the opening of 39 new Company-operated Shacks between March 29, 2023 and March 27, 2024.

As a percentage of Shack sales, the decrease in Labor and related expenses for the thirteen weeks ended March 27, 2024 was primarily due to labor efficiencies partially offset by additional expenses from the opening of 39 new Company-operated Shacks between March 29, 2023 and March 27, 2024.

Labor and related expenses for the thirteen weeks ended June 26, 2024 increased 15.2% to $86.6 million versus the same period last year.

Labor and related expenses for the twenty-six weeks ended June 26, 2024 increased 12.5% to $168.1 million versus the same period last year.

The increases for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024.

As a percentage of Shack sales, the decreases in Labor and related expenses for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to labor efficiencies and sales leverage partially offset by increased wages and incremental expenses from the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024.

Other Operating Expenses

Other operating expenses consist of delivery commissions, Shack-level marketing expenses, repairs and maintenance, utilities and other operating expenses incidental to operating our Company-operated Shacks, such as non-perishable supplies, credit card fees and property insurance.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Other operating expenses $ 43,953 $ 36,109 $ 85,809 $ 71,045

2 unchanged sentences

Percentage change compared to prior year 21.7 % 20.8 %

Other operating expenses for the thirteen weeks ended March 27, 2024 increased 19.8% to $41.9 million versus the same period last year.

The increase was primarily driven by higher facilities costs, mainly professional services, due to the opening of 39 new Company-operated Shacks between March 29, 2023 and March 27, 2024, as well as increases in transaction fees associated with higher sales and marketing costs.

As a percentage of Shack sales, the increase in Other operating expenses for the thirteen weeks ended March 27, 2024 was primarily due to increases in delivery commissions associated with higher delivery sales and marketing spend, partially offset by lower utility costs.

Other operating expenses for the thirteen weeks ended June 26, 2024 increased 21.7% to $44.0 million versus the same period last year.

Other operating expenses for the twenty-six weeks ended June 26, 2024 increased 20.8% to $85.8 million versus the same period last year.

The increases for the thirteen and twenty-six weeks ended June 26, 2024 were primarily driven by increased transaction costs associated with higher sales and higher facilities costs, mainly professional services and utilities, due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024 as well as increased marketing spend.

As a percentage of Shack sales, the increases in Other operating expenses for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to increases in marketing spend and delivery commissions associated with higher delivery sales.

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Form 10-Q | 31

Occupancy and Related Expenses

Occupancy and related expenses consist of Shack-level occupancy expenses (including rent, common area expenses and certain local taxes), and exclude occupancy expenses associated with unopened Shacks, which are recorded separately in Pre-opening costs.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Occupancy and related expenses $ 23,226 $ 19,801 $ 45,414 $ 38,384

2 unchanged sentences

Percentage change compared to prior year 17.3 % 18.3 %

Shake Shack Inc.

Form 10-Q | 29

Occupancy and related expenses for the thirteen weeks ended March 27, 2024 increased 19.4% to $22.2 million versus the same period last year.

The increase was primarily due to the opening of 39 new Company-operated Shacks between March 29, 2023 and March 27, 2024.

As a percentage of Shack sales, the increase in Occupancy and related expenses for the thirteen weeks ended March 27, 2024 were primarily due to higher variable rent and occupancy taxes.

Occupancy and related expenses for the thirteen weeks ended June 26, 2024 increased 17.3% to $23.2 million versus the same period last year.

Occupancy and related expenses for the twenty-six weeks ended June 26, 2024 increased 18.3% to $45.4 million versus the same period last year.

The increases for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024.

As a percentage of Shack sales, Occupancy and related expenses was flat for the thirteen weeks ended June 26, 2024 primarily driven by higher base rent offset by sales leverage.

As a percentage of Shack sales, the increase in Occupancy and related expenses for the twenty-six weeks ended June 26, 2024 was primarily due to higher base rent and variable rent.

General and Administrative Expenses

General and administrative expenses consist of costs associated with corporate and administrative functions that support Shack development and operations, as well as equity-based compensation expense.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

General and administrative expenses $ 36,313 $ 31,476 $ 72,257 $ 62,787

2 unchanged sentences

Percentage change compared to prior year 15.4 % 15.1 %

General and administrative expenses for the thirteen weeks ended March 27, 2024 increased 14.8% to $35.9 million versus the same period last year.

The increase was primarily due to increases in wages and other team costs to support our Shack growth, costs related to the restatement of prior periods included in the fiscal 2023 Form 10-K, professional fees related to non-recurring matters, as well as investments in marketing and technology initiatives, partially offset by the absence of one-time legal settlements compared to the prior year period.

As a percentage of Total revenue, General and administrative expenses was flat at 12.4% for the thirteen weeks ended March 27, 2024 and March 29, 2023, which was primarily due to sales leverage partially offset by the aforementioned items.

General and administrative expenses for the thirteen weeks ended June 26, 2024 increased 15.4% to $36.3 million versus the same period last year.

General and administrative expenses for the twenty-six weeks ended June 26, 2024 increased 15.1% to $72.3 million versus the same period last year.

The increase in General and administrative expenses for the thirteen weeks ended June 26, 2024 was primarily due to increased investments in marketing as well as increases in wages and other team costs to support our Shack growth.

The increase in General and administrative expenses for the twenty-six weeks ended June 26, 2024 was primarily due to the aforementioned items as well as costs related to the prior restatement of prior periods included in the fiscal 2023 Form 10-K and investments in technology initiatives.

As a percentage of Total revenue, the decreases in General and administrative expenses for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to sales leverage partially offset by the aforementioned items.

32 | Shake Shack Inc.

Depreciation and Amortization Expense

Depreciation and amortization expense primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Depreciation and amortization expense $ 25,496 $ 22,252 $ 50,937 $ 43,574

2 unchanged sentences

Percentage change compared to prior year 14.6 % 16.9 %

Depreciation and amortization expense for the thirteen weeks ended March 27, 2024 increased 19.3% to $25.4 million versus the same period last year.

The increase was predominantly due to incremental depreciation of capital expenditures related to the opening of 39 new Company-operated Shacks and technology projects placed into service between March 29, 2023 and March 27, 2024.

Depreciation and amortization expense for the thirteen weeks ended June 26, 2024 increased 14.6% to $25.5 million versus the same period last year.

Depreciation and amortization expense for the twenty-six weeks ended June 26, 2024 increased 16.9% to $50.9 million versus the same period last year.

The increases in Depreciation and amortization expense for the thirteen and twenty-six weeks ended June 26, 2024 were predominantly due to incremental depreciation of capital expenditures related to the opening of 41 new Company-operated Shacks and technology projects placed into service between June 28, 2023 and June 26, 2024.

Pre-Opening Costs

2 unchanged sentences

Pre-opening costs can fluctuate significantly from period to period, based on the number and timing of Company-operated Shack openings and the specific pre-opening costs incurred for each Company-operated Shack.

Additionally, Company-operated Shack openings in new geographic markets may initially experience higher pre-opening costs

30 | Shake Shack Inc.

than our established geographic markets, such as the New York City metropolitan area, where we have greater economies of scale and incur lower travel and lodging costs for our training team.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Additionally, Company-operated Shack openings in new geographic markets may initially experience higher pre-opening costs than our established geographic markets, such as the New York City metropolitan area, where we have greater economies of scale and incur lower travel and lodging costs for our training team.

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Pre-opening costs $ 4,014 $ 5,577 $ 6,767 $ 9,134

2 unchanged sentences

Percentage change compared to prior year (28.0) % (25.9) %

Pre-opening costs for the thirteen weeks ended March 27, 2024 decreased 22.6% to $2.8 million versus the same period last year.

The decrease was primarily due to a reduction in wages and team costs as we standardize the training process for unopened Shacks partially offset by an increase in legal costs.

Pre-opening costs for the thirteen weeks ended June 26, 2024 decreased 28.0% to $4.0 million versus the same period last year.

Pre-opening costs for the twenty-six weeks ended June 26, 2024 decreased 25.9% to $6.8 million versus the same period last year.

The decreases in Pre-opening costs for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to reductions in wages and team costs as we standardize the training process for unopened Shacks.

Impairment and Loss on Disposal of Assets

1 unchanged sentence

Additionally, Impairment and loss on disposal of assets includes the net book value of assets that have been retired which primarily consists of furniture, equipment and fixtures that were replaced in the normal course of business.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Shake Shack Inc.

Form 10-Q | 33

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Impairment and loss on disposal of assets $ 1,045 $ 884 $ 1,571 $ 1,606

2 unchanged sentences

Percentage change compared to prior year 18.2 % (2.2) %

Impairment and loss on disposal of assets for the thirteen weeks ended March 27, 2024 decreased 27.1% to $0.5 million versus the same period last year.

The decrease was primarily due to a decrease in abandoned construction projects partially offset by an increase in costs to replace certain equipment.

Impairment and loss on disposal of assets for the thirteen weeks ended June 26, 2024 increased 18.2% to $1.0 million versus the same period last year.

The increase was primarily due to an increase in abandoned construction projects, partially offset by decreases in costs of disposed assets at our Shacks and home office.

Impairment and loss on disposal of assets for the twenty-six weeks ended June 26, 2024 decreased 2.2% to $1.6 million versus the same period last year.

The decrease was primarily due to decreases in costs of disposed assets at our home office and at our Shacks, partially offset by an increase in the cost of abandoned projects.

Other Income, Net

Other income, net consists primarily of interest income, adjustments to liabilities under the Tax Receivable Agreement, dividend income and net unrealized and realized gains and losses from marketable securities.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Other income, net $ 3,300 $ 3,227 $ 6,506 $ 6,064

2 unchanged sentences

Percentage change compared to prior year 2.3 % 7.3 %

Other income, net for the thirteen weeks ended March 27, 2024 increased from $2.8 million to $3.2 million versus the same period last year.

The increase was primarily due to an increase in interest income related to investments in marketable securities.

Shake Shack Inc.

Form 10-Q | 31

Other income, net for the thirteen weeks ended June 26, 2024 increased to $3.3 million from $3.2 million.

Other income, net for the twenty-six weeks ended June 26, 2024 increased to $6.5 million from $6.1 million.

The increases in Other income, net for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to an increase in interest income from investments.

Interest Expense

Interest expense generally consists of interest on the current portion of our liabilities under the Tax Receivable Agreement, imputed interest related to our financing equipment leases, amortization of deferred financing costs, interest and fees on our Revolving Credit Facility and amortization of debt issuance costs.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Interest expense $ (527) $ (405) $ (1,035) $ (808)

2 unchanged sentences

Percentage change compared to prior year 30.1 % 28.1 %

Interest expense for the thirteen weeks ended March 27, 2024 increased 26.1% to $0.5 million versus the same period last year.

The increase was primarily due to increased finance lease charges from the opening of 39 new Company-operated Shacks between March 29, 2023 and March 27, 2024.

Interest expense for the thirteen weeks ended June 26, 2024 increased 30.1% to $0.5 million versus the same period last year.

Interest expense for the twenty-six weeks ended June 26, 2024 increased 28.1% to $1.0 million versus the same period last year.

The increases in Interest expense for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to increased finance lease charges from the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024.

34 | Shake Shack Inc.

Income Tax Expense

8 unchanged sentences

We are also subject to withholding taxes in foreign jurisdictions.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Income tax expense $ 3,173 $ 347 $ 3,691 $ 1,214

2 unchanged sentences

Percentage change compared to prior year 814.4 % 204.0 %

Our effective income tax rates for the thirteen weeks ended March 27, 2024 and March 29, 2023 were 19.0% and (114.8)%, respectively.

The increase was primarily driven by the change in pre-tax income for the period compared to a pre-tax loss for the same period last year and the impact of discrete items which had a disproportionate effect on the minimal pre-tax loss in the prior year.

Additionally, an increase in the Company's ownership interest in SSE Holdings increases its share of the taxable income (loss) of SSE Holdings.

Our weighted-average ownership interest in SSE Holdings was 93.3% and 93.2%, respectively, for the thirteen weeks ended March 27, 2024 and March 29, 2023.

Net Income (Loss) Attributable to Non-controlling Interests

Our effective income tax rates for the thirteen weeks ended June 26, 2024 and June 28, 2023 were 23.4% and 4.6%, respectively.

Our effective income tax rates for the twenty-six weeks ended June 26, 2024 and June 28, 2023 were 22.7% and 17.8%, respectively.

The increases were primarily driven by increases in pre-tax income compared to the same periods last year.

The Company's ownership interest in SSE Holdings is directly related to its share of the taxable income of SSE Holdings.

Our weighted average ownership interest in SSE Holdings was 93.7% and 93.3%, respectively, for the thirteen weeks ended June 26, 2024 and June 28, 2023, and 93.5% and 93.3%, respectively, for the twenty-six weeks ended June 26, 2024 and June 28, 2023.

These increases in the Company's ownership interest in SSE Holdings LLC increased its share of the taxable income of SSE Holdings.

Net Income Attributable to Non-Controlling Interests

We are the sole managing member of SSE Holdings and have the sole voting power in, and control the management of, SSE Holdings.

Accordingly, we consolidate the financial results of SSE Holdings and report a non-controlling interest on our Condensed Consolidated Statements of Income (Loss), representing the portion of net income (loss) attributable to the other members of SSE Holdings.

Accordingly, we consolidate the financial results of SSE Holdings and report a non-controlling interest on our Condensed Consolidated Statements of Income, representing the portion of net income attributable to the other members of SSE Holdings.

The Third Amended and Restated Limited Liability Company Agreement of SSE Holdings provides that holders of LLC Interests may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one-for-one basis.

In connection with any redemption or exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in SSE Holdings.

The weighted average ownership percentages for the applicable reporting periods are used to attribute net income (loss) and other comprehensive income (loss) to Shake Shack Inc.

The weighted average ownership percentages for the applicable reporting periods are used to attribute net income and other comprehensive income to Shake Shack Inc.

and the non-controlling interest holders.

32 | Shake Shack Inc.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Net income (loss) attributable to non-controlling interests $ 174 $ (88)

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Net income attributable to non-controlling interests $ 714 $ 275 $ 888 $ 187

Percentage of Total revenue 0.2 % 0.1 % 0.1 % — %

Net income (loss) attributable to non-controlling interests for the thirteen weeks ended March 27, 2024 improved to income of $0.2 million from a loss of $0.1 million in the same period last year.

The improvement for the thirteen weeks ended March 27, 2024 was primarily due to improved net results compared to the same period last year, partially offset by a decrease in the non-controlling interest holders' weighted average ownership, which was 6.7% and 6.8%, respectively for the thirteen weeks ended March 27, 2024 and March 29, 2023.

Net income attributable to non-controlling interests for the thirteen weeks ended June 26, 2024 increased to $0.7 million from $0.3 million in the same period last year.

Net income attributable to non-controlling interests for the twenty-six weeks ended June 26, 2024 increased to $0.9 million from $0.2 million in the same period last year.

The increases in Net income attributable to non-controlling interests for the thirteen and twenty-six weeks ended June 26, 2024 were primarily due to increases in net results compared to the same periods last year, partially offset by a decrease in the non-controlling interest holders' weighted average ownership, which was 6.3% and 6.5%, respectively, for the thirteen and twenty-six weeks ended June 26, 2024 and 6.7% for the thirteen and twenty-six weeks ended June 28, 2023.

Shake Shack Inc.

Form 10-Q | 35

NON-GAAP FINANCIAL MEASURES

To supplement the Condensed Consolidated Financial Statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we use the following non-GAAP financial measures:

Restaurant-level profit, Restaurant-level profit margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share (collectively the "non-GAAP financial measures").

Restaurant-level profit, Restaurant-level profit margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share (collectively the "non-GAAP financial measures").

Restaurant-Level Profit

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Therefore, this measure may not provide a complete understanding of the operating results of our Company as a whole and Restaurant-level profit and Restaurant-level profit margin should be reviewed in conjunction with our GAAP financial results.

A reconciliation of Restaurant-level profit to Income (loss) from operations, the most directly comparable GAAP financial measure, is as follows.

A reconciliation of Restaurant-level profit to Income from operations, the most directly comparable GAAP financial measure, is as follows.

36 | Shake Shack Inc.

Form 10-Q | 33

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Income (loss) from operations $ 34 $ (3,189)

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Income from operations $ 10,782 $ 4,748 $ 10,816 $ 1,559

Licensing revenue 11,016 9,995 20,968 19,019

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Impairment and loss on disposal of assets 1,045 884 1,571 1,606

Employee benefit charges (1)

Restaurant-level profit $ 67,079 $ 54,942 $ 121,825 $ 99,641

$ 54,746 $ 44,699

Total revenue $ 316,496 $ 271,805 $ 607,000 $ 525,083

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22.0 % 21.0 % 20.8 % 19.7 %

(1) Expenses related to California healthcare charges for fiscal 2020 through 2023 which do not represent fiscal 2024 Labor and related expenses.

(2) As a percentage of Shack sales.

EBITDA and Adjusted EBITDA

EBITDA is defined as Net income (loss) before Interest expense (net of interest income), Income tax expense and Depreciation and amortization expense.

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, Impairment and loss on disposal of assets, amortization of cloud-based software implementation costs, as well as certain non-recurring items that we do not believe directly reflect our core operations and may not be indicative of our recurring business operations.

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Therefore, these measures may not provide a complete understanding of our performance and should be reviewed in conjunction with our GAAP financial measures.

A reconciliation of EBITDA and adjusted EBITDA to Net income (loss), the most directly comparable GAAP measure, is as follows.

A reconciliation of EBITDA and adjusted EBITDA to Net income, the most directly comparable GAAP measure, is as follows.

Shake Shack Inc.

Thirteen Weeks Ended

(dollar amounts in thousands) March 27

2024 March 29

Net income (loss) $ 2,214 $ (1,622)

Form 10-Q | 37

Thirteen Weeks Ended Twenty-Six Weeks Ended

(dollar amounts in thousands) June 26

Net income $ 10,382 $ 7,223 $ 12,596 $ 5,601

Depreciation and amortization expense 25,496 22,252 50,937 43,574

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Impairment and loss on disposal of assets 1,045 884 1,571 1,606

Legal settlements (1)

CEO transition costs 479 —

Restatement costs (1)

208 — 1,599 —

CEO transition costs 109 — 588 —

Employee benefit charges (2)

Legal settlements (3)

1,687 1,693 2,870 2,321

Adjusted EBITDA $ 47,209 $ 37,050 $ 83,094 $ 64,615

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14.9 % 13.6 % 13.7 % 12.3 %

(1) Expenses incurred to establish accruals related to the settlements of legal matters.

(1) Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.

(2) Expenses related to California healthcare charges for fiscal 2020 through 2023 which do not represent fiscal 2024 Labor and related expenses.

(3) Expenses incurred to establish accruals related to the settlements of legal matters.

(4) Expenses incurred for professional fees related to non-recurring matters.

(4) Calculated as a percentage of Total revenue, which was $290.5 million and $253.3 million for the thirteen weeks ended March 27, 2024 and March 29, 2023, respectively.

Adjusted Pro Forma Net Income (Loss) and Adjusted Pro Forma Earnings (Loss) Per Fully Exchanged and Diluted Share

Adjusted pro forma net income (loss) represents Net income (loss) attributable to Shake Shack Inc.

(5) Calculated as a percentage of Total revenue, which was $316.5 million and $607.0 million for the thirteen and twenty-six weeks ended June 26, 2024, respectively, and $271.8 million and $525.1 million for the thirteen and twenty-six weeks ended June 28, 2023, respectively.

Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share

Adjusted pro forma net income represents Net income attributable to Shake Shack Inc.

assuming the full exchange of all outstanding SSE Holdings, LLC membership interests ("LLC Interests") for shares of Class A common stock, adjusted for certain non-recurring items that we do not believe are directly related to our core operations and may not be indicative of our recurring business operations.

Adjusted pro forma earnings (loss) per fully exchanged and diluted share is calculated by dividing adjusted pro forma net income (loss) by the weighted average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC Interests, after giving effect to the dilutive effect of outstanding equity-based awards.

Adjusted pro forma earnings per fully exchanged and diluted share is calculated by dividing adjusted pro forma net income by the weighted average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC Interests, after giving effect to the dilutive effect of outstanding equity-based awards.

How These Measures Are Useful

When used in conjunction with GAAP financial measures, adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share are supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to our competitors.

By assuming the full exchange of all outstanding LLC Interests, we believe these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income (loss) attributable to Shake Shack Inc.

When used in conjunction with GAAP financial measures, adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share are supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to our competitors.

driven by increases in our ownership of SSE Holdings, which are unrelated to our operating performance, and excludes items that are non-recurring or may not be indicative of our ongoing operating performance.

Limitations of the Usefulness of These Measures

Adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share may differ from similarly titled measures used by other companies due to different methods of calculation.

Presentation of adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share should not be considered alternatives to Net income (loss) and earnings (loss) per share, as determined under GAAP.

While these measures are useful in

Adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share may differ from similarly titled measures used by other companies due to different methods of calculation.

Presentation of adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share should not be considered alternatives to Net income and earnings per share, as determined under GAAP.

While these measures are useful in evaluating our performance, they do not account for the earnings attributable to the non-controlling interest holders and therefore do not provide a complete understanding of the Net income attributable to Shake Shack Inc.

Adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share should be evaluated in conjunction with our GAAP financial results.

38 | Shake Shack Inc.

Form 10-Q | 35

evaluating our performance, they do not account for the earnings attributable to the non-controlling interest holders and therefore do not provide a complete understanding of the Net income (loss) attributable to Shake Shack Inc.

Adjusted pro forma net income (loss) and adjusted pro forma earnings (loss) per fully exchanged and diluted share should be evaluated in conjunction with our GAAP financial results.

A reconciliation of adjusted pro forma net income (loss) to Net income (loss) attributable to Shake Shack Inc., the most directly comparable GAAP measure, and the computation of adjusted pro forma earnings (loss) per fully exchanged and diluted share are set forth below.

Thirteen Weeks Ended

(in thousands, except per share amounts) March 27

2024 March 29

Net income (loss) attributable to Shake Shack Inc $ 2,040 $ (1,534)

Reallocation of Net income (loss) attributable to non-controlling interests from the assumed exchange of LLC Interests (1)

Legal settlements — 1,004

reconciliation of adjusted pro forma net income to Net income attributable to Shake Shack Inc., the most directly comparable GAAP measure, and the computation of adjusted pro forma earnings per fully exchanged and diluted share are set forth below.

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands, except per share amounts) June 26

Net income attributable to Shake Shack Inc.

$ 9,668 $ 6,948 $ 11,708 $ 5,414

Reallocation of Net income attributable to non-controlling interests from the assumed exchange of LLC Interests (1)

714 275 888 187

Restatement costs (2)

208 — 1,599 —

CEO transition costs 109 — 588 —

Employee benefit charges (3)

Legal settlements — — — 1,004

1,687 1,693 2,870 2,321

Tax impact of above adjustments (5)

Adjusted pro forma net income (loss) $ 5,623 $ (290)

(685) (1,036) (329) (1,336)

Adjusted pro forma net income $ 12,146 $ 7,880 $ 17,769 $ 7,590

Weighted average shares of Class A common stock outstanding—diluted 41,480 43,886 41,369 43,837

Assumed exchange of LLC Interests for shares of Class A common stock (1)

2,693 — 2,761 —

Adjusted pro forma fully exchanged weighted average shares of Class A common stock outstanding—diluted 44,173 43,886 44,130 43,837

Adjusted pro forma earnings (loss) per fully exchanged share—diluted $ 0.13 $ (0.01)

Thirteen Weeks Ended

2024 March 29

Earnings (loss) per share of Class A common stock—diluted $ 0.05 $ (0.04)

Adjusted pro forma earnings per fully exchanged share—diluted $ 0.27 $ 0.18 $ 0.40 $ 0.17

Thirteen Weeks Ended Twenty-Six Weeks Ended

Earnings per share of Class A common stock—diluted $ 0.23 $ 0.16 $ 0.28 $ 0.13

Assumed exchange of LLC Interests for shares of Class A common stock (1)

0.01 — 0.01 —

Non-GAAP adjustments (6)

Adjusted pro forma earnings (loss) per fully exchanged share—diluted $ 0.13 $ (0.01)

(1) Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of the non-controlling interest and recognition of the net income (loss) attributable to non-controlling interests.

0.03 0.02 0.11 0.04

Adjusted pro forma earnings per fully exchanged share—diluted $ 0.27 $ 0.18 $ 0.40 $ 0.17

Refer to Note 11, Earnings (Loss) per Share, in the accompanying Condensed Consolidated Financial Statements , for additional information.

(2) Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.

(3) Expenses related to California healthcare charges for fiscal 2020 through 2023 which do not represent fiscal 2024 Labor and related expenses.

(4) Expenses incurred for professional fees related to non-recurring matters.

(4) Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 2.8% and 133.1% for the thirteen weeks ended March 27, 2024 and March 29, 2023, respectively.

(5) Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 24.1% and 18.4% for the thirteen and twenty-six weeks ended June 26, 2024, respectively, and 14.9% and 25.1% for the thirteen and twenty-six weeks ended June 28, 2023, respectively.

Amounts include provisions for U.S.

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(6) Represents the per share impact of non-GAAP adjustments for each period.

Refer to the reconciliation of Adjusted pro forma net income (loss) above for additional information.

Refer to the reconciliation of Adjusted pro forma net income above, for additional information.

Shake Shack Inc.

Form 10-Q | 39

LIQUIDITY AND CAPITAL RESOURCES

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Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand, short-term investments and availability under our Revolving Credit Facility.

As of March 27, 2024, we maintained a Cash and cash equivalents balance of $260.2 million and a short-term investments balance of $24.6 million within Marketable securities.

As of June 26, 2024, we maintained a Cash and cash equivalents balance of $301.8 million and a short-term investments balance of $2.6 million in Marketable securities.

In March 2021, we issued 0% Convertible Senior Notes (“Convertible Notes”), and received $243.8 million of proceeds, net of discounts.

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In addition, we are obligated to make payments to certain members of SSE Holdings under the Tax Receivable Agreement.

As of March 27, 2024, such obligations totaled $236.7 million.

As of June 26, 2024, such obligations totaled $246.9 million.

Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws.

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The payments that we are required to make will generally reduce the amount of overall cash flow that might have otherwise been available to us or to SSE Holdings, but we expect the cash tax savings we will realize from the utilization of the related deferred tax assets to fund the required payments.

We believe our existing cash and cash equivalents balances and cash from operations will be sufficient to fund our operating and finance lease obligations, capital expenditures, Tax Receivable Agreement obligations and working capital needs for at least the next 12 months and the foreseeable future.

Summary of Cash Flows

The following table presents a summary of our cash flows from operating, investing and financing activities.

Thirteen Weeks Ended

(in thousands) March 27

2024 March 29

Twenty-Six Weeks Ended

(in thousands) June 26

Net cash provided by operating activities $ 84,210 $ 62,191

Net cash provided by investing activities 11,307 46,462

Net cash provided by (used in) investing activities 428 (85,415)

Net cash used in financing activities (7,452) (3,596)

Effect of exchange rate changes on cash and cash equivalents

Net increase in Cash and cash equivalents 35,550 62,909

Net increase (decrease) in Cash and cash equivalents 77,185 (26,824)

Cash and cash equivalents at beginning of period 224,653 230,521

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40 | Shake Shack Inc.

Form 10-Q | 37

Operating Activities

For the thirteen weeks ended March 27, 2024, net cash provided by operating activities was $30.7 million compared to $19.8 million for the thirteen weeks ended March 29, 2023, an increase of $10.8 million.

For the twenty-six weeks ended June 26, 2024, net cash provided by operating activities was $84.2 million compared to $62.2 million for the twenty-six weeks ended June 28, 2023, an increase of $22.0 million.

The increase was primarily driven by a $17.3 million improvement in net results after excluding non-cash charges as well as changes in working capital of $4.7 million.

The changes in working capital included an increase in liabilities related to general business operations as well as the timing and payments related to accruals and legal settlements, partially offset by a decrease in liabilities related to bonus arrangements.

The changes in working capital included an increase in liabilities related to marketing promotions and a change in the timing and payments related to accruals, partially offset by an increase in payments on lease liabilities due to the opening of 41 new Company-operated Shacks between June 28, 2023 and June 26, 2024 and higher base rent.

Investing Activities

For the thirteen weeks ended March 27, 2024, net cash provided by investing activities was $11.3 million compared to $46.5 million for the thirteen weeks ended March 29, 2023, an decrease of $35.2 million.

This decrease was primarily due to a net decrease in marketable securities activity as a result of the sale of equity securities of $81.5 million in the prior year, partially offset by maturities of held-to-maturity marketable securities in the current year of $44.4 million.

For the twenty-six weeks ended June 26, 2024, net cash provided by investing activities was $0.4 million compared to net cash used in investing activities of $85.4 million for the twenty-six weeks ended June 28, 2023, an increase of $85.8 million.

The increase was primarily due to a net increase in marketable securities activity as a result of maturities of held-to-maturity marketable securities in the current year of $66.4 million, partially offset by the purchase of held-to-maturity marketable securities of $91.4 million and the sale of equity securities of $81.5 million in the prior year.

Financing Activities

For the thirteen weeks ended March 27, 2024, net cash used in financing activities was $6.4 million compared to $3.4 million for the thirteen weeks ended March 29, 2023, an increase of $3.0 million.

For the twenty-six weeks ended June 26, 2024, net cash used in financing activities was $7.5 million compared to $3.6 million for the twenty-six weeks ended June 28, 2023, an increase of $3.9 million.

This increase was primarily due to an increase in withholding taxes related to net settled equity awards.

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(i) the base rate plus applicable margin ranging from 0.0% to 1.5% or (ii) the Secured Overnight Financing Rate (“SOFR”) plus applicable margin ranging from 1.0% to 2.5%, in each case depending on the net lease adjusted leverage ratio.

As of March 27, 2024 and December 27, 2023, no amounts were outstanding under the Revolving Credit Facility.

As of June 26, 2024 and December 27, 2023, no amounts were outstanding under the Revolving Credit Facility.

The obligations under the Revolving Credit Facility are secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors.

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The Revolving Credit Facility requires us to comply with maximum net lease adjusted leverage and minimum fixed charge coverage ratios, as well as other customary affirmative and negative covenants.

As of March 27, 2024, we were in compliance with all covenants.

As of June 26, 2024, we were in compliance with all covenants.

Contractual Obligations

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Shake Shack Inc.

Form 10-Q | 41

Liabilities under the Tax Receivable Agreement include amounts to be paid to the non-controlling interest holders, assuming we will have sufficient taxable income over the term of the Tax Receivable Agreement to utilize the related tax benefits.

Refer to Note 10, Income Taxes, and Note 13, Commitments and Contingencies, in the accompanying Condensed Consolidated Financial Statements included in Part I, Item 1, for additional information relating to our Tax Receivable Agreement and related liabilities.

Refer to Note 10, Income Taxes, in the accompanying Condensed Consolidated Financial Statements included in Part I, Item 1, for additional information relating to our Tax Receivable Agreement and related liabilities.

Purchase obligations include all legally binding contracts, including commitments for the purchase, construction or remodeling of real estate and facilities, firm minimum commitments for inventory purchases, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis