Q1 2024 Shake Shack Inc Earnings Call Transcript
Key Points
- Shake Shack Inc (SHAK) reported a 14.7% increase in total revenue to $290.5 million, demonstrating strong performance in new Shack openings and positive same-Shack sales.
- The company achieved a 13th consecutive quarter of positive same-Shack sales and a seventh straight quarter of year-over-year restaurant-level margin expansion.
- Adjusted EBITDA grew by 30.2% to $35.9 million, with an improved adjusted EBITDA margin of 12.4%, up 150 basis points from the previous year.
- Shake Shack Inc (SHAK) continued its global expansion, opening eight new Shacks in the first quarter, contributing to a system-wide sales growth of 12.3% year over year.
- The company made significant progress in operational efficiencies, including better forecasting and labor scheduling, and increased adoption of kiosks, which are now the largest order channel and most profitable.
- Despite overall growth, Shake Shack Inc (SHAK) faced weather-related headwinds that impacted sales, estimating a loss of about $3 million due to mobility closures and reduced hours.
- Traffic was down 2.1% in the quarter, although it would have been approximately flat excluding weather impacts, indicating potential challenges in attracting customers.
- The company continues to face macroeconomic headwinds in the Middle East and China, which could affect its international market performance.
- There are ongoing inflationary pressures, particularly in wages and food costs, which could impact future profitability despite current operational efficiencies.
- Shake Shack Inc (SHAK) is in a transition period with the CEO changing, which could bring uncertainties regarding the continuation of current strategies and company performance.
Greetings. Welcome to Shake Shack's First Quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation if anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Michael Oriolo, Vice President of FP&A and Investor Relations. Thank you. You may begin.
Thank you, and good morning, everyone. Joining me for Shake Shack's conference call is our CEO, Randy Garutti, and CFO, Katie Fogarty.
During today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP and reconciliations to comparable GAAP measures are available in our earnings release and the financial details
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