Shake Shack Inc. Q4 FY2025 earnings call

Rob Lynch thanked the team and discussed 2025 results and 2026 plans. 2025 was a year of strong execution and disciplined growth. They focused on operational excellence, including optimizing labor deployment with a performance scorecard, seeing labor guide attainment improve. Addressed commodity environment challenges by focusing on supply chain optimization, diversifying suppliers. Culinary innovation included new menu items like Dubai Chocolate Shake, fried pickles, onion rings (with onion rings added to core menu), expanded Crackable Shake program, and Good Fit menu. Marketing efforts included 'We Really Cook' campaign and 1-3-5 in-app promotion. Development in 2025 included opening 45 new company-operated Shacks and 40 licensed openings, with 2026 plans to open 55-60 company-operated Shacks and strong licensed business momentum. Carrie Britton discussed quarterly results, noting 2025 success, Q4 performance, January 2026 same-Shack sales growth despite weather, and financial metrics like G&A, equity-based compensation, preopening costs, etc.

Total revenue grew by more than 15% in 2025. Company-operated business had same-Shack sales growth of 2.3%, restaurant-level profit margin expanded by 120 basis points to 22.6%, and adjusted EBITDA grew 20% to approximately $210 million. Fourth quarter total revenue was $400,500,000, up 21.9% year over year. Licensing revenue in Q4 was $15,200,000, with licensing sales $232,700,000, up 26.4% year over year. Company-operated Shack sales grew 21.7% year over year to $385,300,000, with 2.1% same-Shack sales growth, 0.5% positive traffic, and 1.6% price/mix.

First quarter 2026 expected total revenue $366,000,000 - $370,000,000, same-Shack sales up 3% - 5%, licensing revenue $12,800,000 - $13,200,000, restaurant-level profit margin 21.5% - 22%, and approximately four licensed openings. Late February roll-off of price impact on delivery channels. Full year 2026 total revenue growth in low teens, system-wide unit growth in low teens, restaurant-level profit margin expansion of at least 50 basis points per year, and adjusted EBITDA growth in low- to high-teens range. Expect low single-digit inflation in food and paper costs after supply chain savings, with beef costs up mid-teens partially offset.

Q: About kitchen equipment, Rob responded on fry hot holding equipment implementation, improvement in fries quality, equipment innovation center, and kitchen design optimization.

Q: On loyalty program and Northeast markets, Rob talked about app downloads growth and loyalty program launch plan, and Northeast market impact and 2026 development outside Northeast.

Q: On labor and wait times, Rob discussed labor improvement drivers, hospitality KPIs, and wait time improvement including drive-thru.

Q: On promotions, Rob said app is incremental channel for promotions.

Q: On 1-3-5 menu and marketing, Rob talked about guest profile, program impact, and marketing balance between top and lower funnel.

Q: On mix and supply chain saves, Rob discussed mix impact from LTOs and supply chain savings drivers and timeline.