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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 26, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ______
Commission file number: 001-36823
shak-img_shakeshacklogoa16.jpg
SHAKE SHACK INC.
(Exact name of registrant as specified in its charter)
Delaware47-1941186
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)
225 Varick Street
Suite 301
New York,New York10014
(Address of principal executive offices)(Zip Code)
(646) 747-7200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
Title of each class Trading symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.001SHAKNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule-405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☑Accelerated filer  ☐
Non-accelerated filer  ☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☑ No
As of July 24, 2024, there were 39,982,821 shares of Class A common stock outstanding and 2,487,936 shares of Class B common stock outstanding.


SHAKE SHACK INC.
TABLE OF CONTENTS


Cautionary Note Regarding Forward-Looking Information
This Quarterly Report on Form 10-Q ("Form 10-Q") contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"), which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical fact included in this Form 10-Q are forward-looking statements, including, but not limited to, statements about the Company's growth, strategic plan, and liquidity. Forward-looking statements discuss the Company's current expectations and projections relating to its financial position, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim," "anticipate," "believe," "estimate," "expect," "forecast," "future," "intend," "likely," "outlook," "potential," "project," "projection," "plan," "seek," "may," "could," "would," "will," "should," "can," "can have," the negatives thereof and other similar expressions.
All forward-looking statements are expressly qualified in their entirety by these cautionary statements. Some of the factors which could cause results to differ materially from the Company's expectations include the Company's ability to develop and open new Shacks on a timely basis, increased costs or shortages or interruptions in the supply and delivery of products, increased labor costs or shortages, inflationary pressures, the Company's management of its digital capabilities and expansion into delivery, as well as kiosk, drive-thru and multiple format investments, the Company's ability to maintain and grow sales at existing Shacks, and risks relating to the restaurant industry generally, and the impact of any material weakness in the Company's internal controls over financial reporting identified in connection with the restatement described in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 29, 2024 or otherwise. You should evaluate all forward-looking statements made in this Form 10-Q in the context of the risks and uncertainties disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 27, 2023 as filed with the Securities and Exchange Commission (the "SEC").
The forward-looking statements included in this Form 10-Q are made only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Shake Shack Inc. shak-img_burgersmalla09.jpg Form 10-Q | 1
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
2 | Shake Shack Inc. Image3.jpg Form 10-Q
SHAKE SHACK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share amounts)
June 26
2024		December 27
2023
ASSETS
Current assets:
Cash and cash equivalents$301,838 $224,653 
Marketable securities2,574 68,561 
Accounts receivable, net15,914 16,847 
Inventories5,194 5,404 
Prepaid expenses and other current assets20,160 18,967 
Total current assets345,680 334,432 
Property and equipment, net of accumulated depreciation of $425,428 and $376,760, respectively
545,225 530,995 
Operating lease assets419,527 398,296 
Deferred income taxes, net338,538 326,208 
Other assets12,788 15,926 
TOTAL ASSETS$1,661,758 $1,605,857 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$18,576 $22,273 
Accrued expenses56,376 54,742 
Accrued wages and related liabilities22,584 20,945 
Operating lease liabilities, current53,140 49,004 
Other current liabilities17,412 17,103 
Total current liabilities168,088 164,067 
Long-term debt246,160 245,636 
Long-term operating lease liabilities487,600 464,533 
Liabilities under tax receivable agreement, net of current portion246,878 235,613 
Other long-term liabilities26,667 26,638 
Total liabilities1,175,393 1,136,487 
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of June 26, 2024 and December 27, 2023.— — 
Class A common stock, $0.001 par value—200,000,000 shares authorized; 39,966,973 and
39,474,315 shares issued and outstanding as of June 26, 2024 and December 27, 2023, respectively.		40 39 
Class B common stock, $0.001 par value—35,000,000 shares authorized; 2,487,936 and
2,834,513 shares issued and outstanding as of June 26, 2024 and December 27, 2023, respectively.		2 3 
Additional paid-in capital433,877 426,601 
Retained earnings28,485 16,777 
Accumulated other comprehensive loss(4)(3)
Total stockholders' equity attributable to Shake Shack Inc.462,400 443,417 
Non-controlling interests23,965 25,953 
Total equity486,365 469,370 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,661,758 $1,605,857 
See accompanying Notes to Condensed Consolidated Financial Statements.
Shake Shack Inc. shak-img_burgersmalla09.jpg Form 10-Q | 3
SHAKE SHACK INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share amounts)
Thirteen Weeks EndedTwenty-Six Weeks Ended
June 26
2024		June 28
2023		June 26
2024		June 28
2023
Shack sales$305,480 $261,810 $586,032 $506,064 
Licensing revenue11,016 9,995 20,968 19,019 
TOTAL REVENUE316,496 271,805 607,000 525,083 
Shack-level operating expenses:
Food and paper costs85,053 75,800 165,306 147,572 
Labor and related expenses86,614 75,158 168,123 149,422 
Other operating expenses43,953 36,109 85,809 71,045 
Occupancy and related expenses23,226 19,801 45,414 38,384 
General and administrative expenses36,313 31,476 72,257 62,787 
Depreciation and amortization expense25,496 22,252 50,937 43,574 
Pre-opening costs4,014 5,577 6,767 9,134 
Impairment and loss on disposal of assets1,045 884 1,571 1,606 
TOTAL EXPENSES305,714 267,057 596,184 523,524 
INCOME FROM OPERATIONS10,782 4,748 10,816 1,559 
Other income, net3,300 3,227 6,506 6,064 
Interest expense(527)(405)(1,035)(808)
INCOME BEFORE INCOME TAXES13,555 7,570 16,287 6,815 
Income tax expense3,173 347 3,691 1,214 
NET INCOME10,382 7,223 12,596 5,601 
Less: Net income attributable to non-controlling interests714 275 888 187 
NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC.$9,668 $6,948 $11,708 $5,414 
Earnings per share of Class A common stock:
Basic$0.24 $0.18 $0.30 $0.14 
Diluted$0.23 $0.16 $0.28 $0.13 
Weighted-average shares of Class A common stock outstanding:
Basic39,750 39,416 39,632 39,374 
Diluted41,480 43,886 41,369 43,837 
See accompanying Notes to Condensed Consolidated Financial Statements.



4 | Shake Shack Inc. Image3.jpg Form 10-Q
SHAKE SHACK INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands)
Thirteen Weeks EndedTwenty-Six Weeks Ended
June 26
2024		June 28
2023		June 26
2024		June 28
2023
Net income$10,382 $7,223 $12,596 $5,601 
Other comprehensive loss, net of tax(1):
Change in foreign currency translation adjustment— — (1)(4)
OTHER COMPREHENSIVE LOSS— — (1)(4)
COMPREHENSIVE INCOME10,382 7,223 12,595 5,597 
Less: Comprehensive income attributable to non-controlling interests714 275 888 187 
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAKE SHACK INC.$9,668 $6,948 $11,707 $5,410 
(1)Net of tax expense of $0 for the thirteen and twenty-six weeks ended June 26, 2024 and June 28, 2023.
See accompanying Notes to Condensed Consolidated Financial Statements.
Shake Shack Inc. shak-img_burgersmalla09.jpg Form 10-Q | 5
SHAKE SHACK INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(in thousands, except share amounts)
For the Thirteen Weeks Ended June 26, 2024 and June 28, 2023
Class A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Retained Earnings (Accumulated Deficit)Accumulated Other Comprehensive LossNon-
Controlling
Interest		Total
Equity
SharesAmountSharesAmount
BALANCE, MARCH 27, 202439,635,382 $40 2,801,013 $3 $427,530 $18,817 $(4)$25,907 $472,293 
Net income— — — — — 9,668 — 714 10,382 
Other comprehensive income (loss):
Net change in foreign currency translation adjustment— — — — — — — — — 
Equity-based compensation— — — — 3,840 — — — 3,840 
Activity under stock compensation plans18,514 — — — (320)— — 296 (24)
Redemption of LLC Interests313,077 — (313,077)(1)2,953 — — (2,952)— 
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis— — — — (126)— — — (126)
Distributions paid to non-controlling interest holders— — — — — — — — — 
BALANCE, JUNE 26, 202439,966,973 $40 2,487,936 $2 $433,877 $28,485 $(4)$23,965 $486,365 
BALANCE, MARCH 29, 202339,404,905 $39 2,844,513 $3 $417,489 $(5,021)$(4)$24,487 $436,993 
Net income— — — — — 6,948 — 275 7,223 
Other comprehensive income (loss):
Net change in foreign currency translation adjustment— — — — — — — — — 
Equity-based compensation— — — — 4,011 — — — 4,011 
Activity under stock compensation plans44,341 — — — 145 — — 329 474 
Redemption of LLC Interests— — — — — — — — — 
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis— — — — (251)— — — (251)
Distributions paid to non-controlling interest holders— — — — — — — (3)(3)
BALANCE, JUNE 28, 202339,449,246 $39 2,844,513 $3 $421,394 $1,927 $(4)$25,088 $448,447 

6 | Shake Shack Inc. Image3.jpg Form 10-Q
For the Twenty-Six Weeks Ended June 26, 2024 and June 28, 2023
Class A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Retained Earnings (Accumulated Deficit)Accumulated Other Comprehensive Income (Loss)Non-
Controlling
Interest		Total
Equity
SharesAmountSharesAmount
BALANCE, DECEMBER 27, 202339,474,315 $39 2,834,513 $3 $426,601 $16,777 $(3)$25,953 $469,370 
Net income— — — — — 11,708 — 888 12,596 
Other comprehensive income (loss):
Net change in foreign currency translation adjustment— — — — — — (1)— (1)
Equity-based compensation— — — — 7,558 — — — 7,558 
Activity under stock compensation plans146,081 1 — — (5,897)— — 507 (5,389)
Redemption of LLC Interests346,577 — (346,577)(1)3,239 — — (3,238)— 
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis— — — — 2,376 — — — 2,376 
Distributions paid to non-controlling interest holders— — — — — — — (145)(145)
BALANCE, JUNE 26, 202439,966,973 $40 2,487,936 $2 $433,877 $28,485 $(4)$23,965 $486,365 
BALANCE, DECEMBER 28, 202239,284,998 $39 2,869,513 $3 $415,649 $(3,487)$— $24,632 $436,836 
Net income— — — — — 5,414 — 187 5,601 
Other comprehensive income (loss):
Net change in foreign currency translation adjustment— — — — — — (4)— (4)
Equity-based compensation— — — — 7,875 — — — 7,875 
Activity under stock compensation plans139,248 — — — (2,554)— — 515 (2,039)
Redemption of LLC Interests25,000 — (25,000)— 194 — — (194)— 
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis— — — — 230 — — — 230 
Distributions paid to non-controlling interest holders— — — — — — — (52)(52)
BALANCE, JUNE 28, 202339,449,246 $39 2,844,513 $3 $421,394 $1,927 $(4)$25,088 $448,447 
See accompanying Notes to Condensed Consolidated Financial Statements.

Shake Shack Inc. shak-img_burgersmalla09.jpg Form 10-Q | 7
SHAKE SHACK INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Twenty-Six Weeks Ended
June 26
2024		June 28
2023
OPERATING ACTIVITIES
Net income (including amounts attributable to non-controlling interests)$12,596 $5,601 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense50,937 43,574 
Amortization of debt issuance costs524 524 
Amortization of cloud computing assets
1,048 880 
Non-cash operating lease cost37,655 32,598 
Equity-based compensation7,381 7,734 
Deferred income taxes1,311 2,733 
Non-cash interest
(128)99 
Gain on sale of equity securities— (81)
Net amortization of discount on held-to-maturity securities(434)(89)
Impairment and loss on disposal of assets1,571 1,606 
Changes in operating assets and liabilities:
Accounts receivable933 (455)
Inventories210 (490)
Prepaid expenses and other current assets(864)(519)
Other assets(1,219)(3,217)
Accounts payable(1,084)(3,939)
Accrued expenses4,409 39 
Accrued wages and related liabilities1,639 592 
Other current liabilities(732)(2,081)
Operating lease liabilities(32,553)(25,584)
Other long-term liabilities1,010 2,666 
NET CASH PROVIDED BY OPERATING ACTIVITIES84,210 62,191 
INVESTING ACTIVITIES
Purchases of property and equipment(65,992)(74,755)
Purchases of held-to-maturity securities— (91,448)
Maturities of held-to-maturity marketable securities66,420 — 
Purchases of equity securities— (690)
Sales of equity securities— 81,478 
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES428 (85,415)
FINANCING ACTIVITIES
Payments on principal of finance leases(1,918)(1,504)
Distributions paid to non-controlling interest holders(145)(52)
Net proceeds from stock option exercises
552 630 
Employee withholding taxes related to net settled equity awards(5,941)(2,670)
NET CASH USED IN FINANCING ACTIVITIES(7,452)(3,596)
Effect of exchange rate changes on cash and cash equivalents(1)(4)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS77,185 (26,824)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD224,653 230,521 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$301,838 $203,697 
See accompanying Notes to Condensed Consolidated Financial Statements.
8 | Shake Shack Inc. Image3.jpg Form 10-Q
SHAKE SHACK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
Shake Shack Inc. shak-img_burgersmalla09.jpg Form 10-Q | 9
NOTE 1: NATURE OF OPERATIONS
Shake Shack Inc. was formed on September 23, 2014 as a Delaware corporation for the purpose of facilitating an initial public offering and other related transactions in order to carry on the business of SSE Holdings, LLC and its subsidiaries ("SSE Holdings"). Shake Shack Inc. is the sole managing member of SSE Holdings and, as sole managing member, the Company operates and controls all of the business and affairs of SSE Holdings. As a result, the Company consolidates the financial results of SSE Holdings and reports a non-controlling interest representing the economic interest in SSE Holdings held by the other members of SSE Holdings. As of June 26, 2024 the Company owned 94.1% of SSE Holdings. Unless the context otherwise requires, "we," "us," "our," "Shake Shack," the "Company" and other similar references, refer to Shake Shack Inc. and, unless otherwise stated, all of its subsidiaries, including SSE Holdings.
The Company operates and licenses Shake Shack restaurants ("Shacks"), which serve burgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine and more. 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.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Shake Shack Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and on a basis consistent in all material respects with the accounting policies described in its Annual Report on Form 10-K for the fiscal year ended December 27, 2023 ("2023 Form 10-K"). Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These interim Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and related notes thereto included in its 2023 Form 10-K. In the Company's opinion, all adjustments, which are normal and recurring in nature, necessary for a fair presentation of the financial position and results of operation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.
SSE Holdings is considered a variable interest entity. Shake Shack Inc. is the primary beneficiary as the Company has the majority economic interest in SSE Holdings and, as the sole managing member, has decision making authority that significantly affects the economic performance of the entity, while the limited partners have no substantive kick-out or participating rights. As a result, the Company consolidates SSE Holdings. The assets and liabilities of SSE Holdings represent substantially all of the Company's consolidated assets and liabilities with the exception of certain deferred taxes and liabilities under the Tax Receivable Agreement. As of June 26, 2024 and December 27, 2023, the net assets of SSE Holdings were $409,417 and $388,250, respectively. The assets of SSE Holdings are subject to certain restrictions in SSE Holdings' revolving credit agreement.
Fiscal Year
The Company operates on a 52/53 week fiscal year ending on the last Wednesday of December. Fiscal 2024 contains 52 weeks and ends on December 25, 2024. Fiscal 2023 contained 52 weeks and ended on December 27, 2023. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of Estimates
The preparation of these Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
10 | Shake Shack Inc. Image3.jpg Form 10-Q
Recently Issued Accounting Pronouncements
The Company reviewed all recently issued accounting pronouncements and concluded that they were not applicable or not expected to have a significant impact on its Condensed Consolidated Financial Statements.
NOTE 3: REVENUE
Revenue Recognition
Shack Sales
Revenue from Shack sales is recognized when payment is tendered at the point of sale, net of discounts as the performance obligation has been satisfied at that time. Sales tax collected from guests is excluded from Shack sales and the obligation is included in Other current liabilities on the Condensed Consolidated Balance Sheets until the taxes are remitted to the appropriate taxing authorities.
Delivery services are fulfilled by third-party delivery partners whether ordered through the Shack app, website (collectively, "Company-owned platforms") or through third-party delivery platforms. Revenue from orders through Company-owned platforms includes delivery fees and is recognized when the delivery partner transfers the order to the guest as the Company controls the delivery. For these sales, the Company receives payment directly from the guest at the time of sale. Revenue from orders through third-party delivery platforms is recognized when the order is transferred to the third-party delivery partner and excludes delivery fees collected by the delivery partner as the Company does not control the delivery. The Company receives payment from the delivery partner subsequent to the transfer of the order and the payment terms are short-term in nature. For all delivery sales, the Company is considered the principal and recognizes revenue on a gross basis.
The Company sells gift cards which do not have expiration dates. Revenue from gift cards is recognized when gift cards are redeemed by the guest or, in the event a gift card is not expected to be redeemed, in proportion to actual redemptions of gift cards ("gift card breakage"). The gift card breakage rate is determined from historical gift card redemption patterns. Gift card breakage income for the thirteen weeks ended June 26, 2024 and June 28, 2023 was $110 and $72, respectively. Gift card breakage income for the twenty-six weeks ended June 26, 2024 and June 28, 2023 was $244 and $178, respectively. Gift card breakage income is included in Shack sales on the Condensed Consolidated Statements of Income.
Licensing Revenue
Licensing revenue includes initial territory fees, Shack opening fees and ongoing sales-based royalty fees from licensed Shacks. Generally, the licenses granted to develop, open and operate each Shack in a specified territory are the predominant good or service transferred to the licensee and represent distinct performance obligations. Ancillary promised services, such as training and assistance during the initial opening of a Shack, are typically combined with the license and considered one performance obligation per Shack.
The Company determines the transaction price for each contract, which requires judgement as the transaction price is comprised of the initial territory fee and an estimate of the total Shack opening fees based on the estimated number of Shacks the Company expects the licensee to open. The transaction price is then allocated equally to each Shack expected to open. The performance obligation is satisfied over time, starting when a Shack opens through the end of the license term for the related Shack, therefore revenue is recognized on a straight-line basis over the license term.
Generally, payment for the initial territory fee is received upon execution of the license agreement and payment for the Shack opening fees is received either in advance of or upon opening the related Shack. These payments are initially deferred and recognized in revenue as the performance obligations are satisfied. Revenue from sales-based royalties is recognized as the related sales occur.
Shake Shack Inc. shak-img_burgersmalla09.jpg Form 10-Q | 11
Revenue disaggregated by type was as follows:
Thirteen Weeks EndedTwenty-Six Weeks Ended
June 26
2024		June 28
2023		June 26
2024		June 28
2023
Shack sales$305,480 $261,810 $586,032 $506,064 
Licensing revenue:
Sales-based royalties10,624 9,712 20,257 18,490 
Initial territory and opening fees392 283 711 529 
Total revenue$316,496 $271,805 $607,000 $525,083 
The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied as of June 26, 2024 was $22,978. The Company expects to recognize this amount as revenue over a long-term period, as the license term for each Shack ranges from five to twenty years. This amount excludes any variable consideration related to sales-based royalties.
Contract Balances
Contract liabilities and receivables from contracts with customers were as follows:
June 26
2024		December 27
2023
Shack sales receivables$9,399 $9,884 
Licensing receivables, net of allowance for doubtful accounts5,440 4,610 
Gift card liability2,047 2,603 
Deferred revenue, current1,328 1,192 
Deferred revenue, long-term16,777 17,157 
Revenue recognized that was included in the respective liability balances at the beginning of the period was as follows:
Thirteen Weeks EndedTwenty-Six Weeks Ended
June 26
2024		June 28
2023		June 26
2024		June 28
2023
Gift card liability
$168 $144 $587 $477 
Deferred revenue385 274 702 518 
NOTE 4: FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The carrying values of the Company's Cash and cash equivalents, Accounts receivable, net, Accounts payable and Accrued expenses approximate fair value due to the short-term nature of these financial instruments.
The Company's marketable securities were as follows:
June 26
2024		December 27
2023
Held-to-maturity securities$2,574 $68,561 
The Company classified its held-to-maturity securities as Level 1 within the fair value hierarchy. Refer to Note 6, Debt, for additional information relating to the fair value of the Company's outstanding debt instruments.
12 | Shake Shack Inc. Image3.jpg Form 10-Q
The Company's held-to-maturity securities were as follows:
June 26, 2024
Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
U.S. Treasuries$2,574 $456 $— $3,030 
As of June 26, 2024, the contractual maturities of held-to-maturity securities were less than 12 months. Any expected credit losses would not be material to the Condensed Consolidated Statements of Income.
A summary of other income (expense) from marketable securities was as follows:
Thirteen Weeks EndedTwenty-Six Weeks Ended
June 26
2024		June 28
2023		June 26
2024		June 28
2023
Income from marketable securities
$90 $126 $625 $621 
Realized gain on sale of equity securities— — — 81 
Total$90 $126 $625 $702 
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Assets and liabilities measured at fair value on a non-recurring basis include long-lived assets, operating lease right-of-use assets and indefinite-lived intangible assets. The Company performs its impairment analysis at least annually or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. There were no impairment charges recognized during the thirteen and twenty-six weeks ended June 26, 2024 and June 28, 2023.
NOTE 5: SUPPLEMENTAL BALANCE SHEET INFORMATION

The components of Prepaid expenses and other current assets were as follows:
June 26
2024		December 27
2023
Prepaid expenses
$6,332 $5,641 
Tenant allowance receivables
12,465 12,136 
Other
1,363 1,190 
Prepaid expenses and other current assets
$20,160 $18,967 
The components of Other current liabilities were as follows:
June 26
2024		December 27
2023
Sales tax payable$6,220 $6,076 
Current portion of financing equipment lease liabilities3,789 3,435 
Gift card liability2,047 2,603 
Other5,356 4,989 
Other current liabilities$17,412 $17,103 
Shake Shack Inc. shak-img_burgersmalla09.jpg Form 10-Q | 13
NOTE 6: DEBT
Convertible Notes
The Company's $250,000 aggregate principal amount of 0% Convertible Senior Notes due 2028 (“Convertible Notes”) will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in certain circumstances. Upon conversion, the Company pays or delivers, as the case may be, cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at the Company's election.
The Convertible Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding December 1, 2027, only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on June 30, 2021 (and only during such fiscal quarter), if the last reported sale price of the Company's Class A common stock, par value $0.001 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price for the Convertible Notes on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per one thousand dollar principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Class A common stock and the conversion rate for the Convertible Notes on each such trading day; (3) if the Company calls such Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the Convertible Notes called (or deemed called) for redemption; and (4) upon the occurrence of specified corporate events as set forth in the Indenture. On or after December 1, 2027, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Convertible Notes may convert all or any portion of their Convertible Notes at any time, regardless of the foregoing circumstances.
The Convertible Notes had an initial conversion rate of 5.8679 shares of Class A common stock per one thousand dollar principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $170.42 per share of Class A common stock. The fair value of the Convertible Notes was approximately $214,375 and $205,000, respectively, as of June 26, 2024 and December 27, 2023, based on external pricing data, including available quoted market prices of these instruments, and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as a Level 2 measurement within the fair value hierarchy.
Thirteen Weeks EndedTwenty-Six Weeks Ended
ClassificationJune 26
2024		June 28
2023		June 26
2024		June 28
2023
Amortization expense on Convertible NotesInterest expense$262 $262 $524 $524 
June 26
2024		December 27
2023
Convertible Notes$250,000 $250,000 
Discount and debt issuance costs, net of amortization(3,840)(4,364)
Long-term debt$246,160 $245,636 
Revolving Credit Facility
The Company maintains a revolving credit facility agreement ("Revolving Credit Facility") which permits borrowings up to $50,000 with the ability to increase available borrowings up to an additional $100,000, subject to satisfaction of certain conditions. The Revolving Credit Facility has a maturity date of March 5, 2026.
In June 2023, the Company entered into the fourth amendment to the Revolving Credit Facility ("Fourth Amendment"), which, among other things, modified the benchmark interest rate to either: (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
14 | Shake Shack Inc. Image3.jpg Form 10-Q
dependent upon the net lease adjusted leverage ratio. 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. The obligations under the Revolving Credit Facility are guaranteed by each of SSE Holdings' direct and indirect subsidiaries, with certain exceptions. The Revolving Credit Facility requires the Company 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 June 26, 2024, the Company was in compliance with all covenants.
The Revolving Credit Facility also permits the issuance of letters of credit upon our request of up to $15,000. As of June 26, 2024 and December 27, 2023, the Company had outstanding letters of credit of $3,310 and $3,147, respectively, in connection with the Revolving Credit Facility.
Thirteen Weeks EndedTwenty-Six Weeks Ended
ClassificationJune 26
2024		June 28
2023		June 26
2024		June 28
2023
Interest expense on Revolving Credit FacilityInterest expense$17 $22 $34 $46 
ClassificationJune 26
2024		December 27
2023
Unamortized deferred financing costs on Revolving Credit FacilityOther assets$33 $42 
NOTE 7: LEASES
Nature of Leases
Shake Shack currently leases all of its Company-operated Shacks, the home office and certain equipment under various non-cancelable lease agreements that expire on various dates through 2045. The Company evaluates contracts entered into to determine whether the contract involves the use of property or equipment, which is either explicitly or implicitly identified in the contract. The Company evaluates whether it controls the use of the asset, which is determined by assessing whether substantially all economic benefit from the use of the asset is obtained, and whether the Company has the right to direct the use of the asset. If these criteria are met, the Company has identified a lease within the contract, and therefore a right of use asset and lease liability are recorded on the Condensed Consolidated Balance Sheets. Upon possession of a leased asset, the Company determines whether the lease is an operating or finance lease. All of the Company's real estate leases are classified as operating leases and most equipment leases are classified as finance leases.
Generally, real estate leases have initial terms ranging from 10 to 15 years and typically include two five-year renewal options. Renewal options are generally not recognized as part of the right-of-use assets and lease liabilities as it is not reasonably certain at commencement date that the Company would exercise the renewal options. Real estate leases typically contain fixed minimum rent payments and/or contingent rent payments which are based upon sales in excess of specified thresholds. When the achievement of such sales thresholds are deemed to be probable, contingent rent is accrued in proportion to the sales recognized during the period.
For operating leases, fixed lease payments are recognized as operating lease costs on a straight-line basis over the lease term on the Condensed Consolidated Statements of Income in the following line items. Lease expense incurred before a Shack opens is recorded in Pre-opening costs. Once a Company-operated Shack opens, the straight-line lease expense and contingent rent, if applicable, are recorded in Occupancy and related expenses. Many of these leases also require the Company to pay real estate taxes, common area maintenance costs and other occupancy costs which are included in Occupancy and related expenses. Finance leases are recognized in depreciation expense on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability.
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For both operating and finance leases that contain lease and non-lease components, the components are combined and accounted for as a single lease component. Variable lease costs for both operating and finance leases, if any, are recognized as incurred. Leases with a term of 12 months or less are deemed short-term and are not recognized on the Condensed Consolidated Balance Sheets. Fixed lease payments for short-term leases are recognized on a straight-line basis over the lease term.
The Company calculates operating lease assets and lease liabilities as the present value of fixed lease payments over the reasonably certain lease term beginning at the commencement date. The Company uses its incremental borrowing rate ("IBR") in determining the present value of future lease payments as there are no explicit rates provided in the leases. The IBR used to measure the lease liability is derived from the average of the yield curves obtained from using the notching method and the recovery rate method. The most significant assumption in calculating the IBR is the Company's credit rating and is subject to judgment. The credit rating used to develop the IBR is determined by utilizing the credit ratings of other public companies with similar financial information as SSE Holdings.

The Company expends cash for leasehold improvements to build out and equip leased properties. Generally, a portion of the leasehold improvements and building costs are reimbursed by the landlords through landlord incentives pursuant to agreed-upon terms in the lease agreements. Landlord incentives usually take the form of cash, full or partial credits against future minimum or contingent rents otherwise payable by the Company, or a combination thereof. In most cases, landlord incentives are received after the Company takes possession of the property and as milestones are met during the construction of the property. The Company includes these amounts in the measurement of the initial operating lease liability, and lease asset.
A summary of operating and finance right-of-use assets and lease liabilities were as follows:
ClassificationJune 26
2024		December 27
2023
Operating leasesOperating lease assets$419,527 $398,296 
Finance leasesProperty and equipment, net12,278 11,801 
Total right-of-use assets$431,805 $410,097 
Operating leases:
Operating lease liabilities, current$53,140 $49,004 
Long-term operating lease liabilities487,600 464,533 
Finance leases:
Other current liabilities3,789 3,435 
Other long-term liabilities8,969 8,721 
Total lease liabilities$553,498 $525,693 
The components of lease expense were as follows:
Thirteen Weeks EndedTwenty-Six Weeks Ended
ClassificationJune 26
2024		June 28
2023		June 26
2024		June 28
2023
Operating lease costOccupancy and related expenses
Pre-opening costs
General and administrative expenses		$19,165 $16,523 $37,655 $32,598 
Finance lease cost:
Amortization of right-of-use assetsDepreciation and amortization expense1,075 703 2,043 1,440 
Interest on lease liabilitiesInterest expense207 72 387 142 
Variable lease costOccupancy and related expenses
Pre-opening costs
General and administrative expenses		5,523 4,682 10,729 8,452 
Short-term lease costOccupancy and related expenses190 273 406 513 
Total lease cost$26,160 $22,253 $51,220 $43,145 
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As of June 26, 2024, future minimum lease payments for operating and finance leases consisted of the following:
Operating LeasesFinance Leases
2024(1)
$29,716 $2,306 
202585,913 4,151 
202686,224 3,397 
202781,318 2,719 
202876,993 1,493 
Thereafter342,271 228 
Total minimum payments702,435 14,294 
Less: imputed interest174,160 1,536 
Total lease liabilities$528,275 $12,758 
(1)Operating leases are net of certain tenant allowance receivables that were reclassified to Other current assets as of June 26, 2024.
As of June 26, 2024, the Company had additional operating lease commitments of $134,340 for non-cancelable leases without a possession date, which commence in 2024 or later. These lease commitments are materially consistent with leases recognized on the Condensed Consolidated Balance Sheets.
A summary of lease terms and discount rates for operating and finance leases were as follows:
June 26
2024		December 27
2023
Weighted average remaining lease term (years):
Operating leases8.98.9
Finance leases4.74.7
Weighted average discount rate:
Operating leases6.2 %6.2 %
Finance leases5.7 %5.6 %
Supplemental cash flow information related to leases was as follows:
Twenty-Six Weeks Ended
June 26
2024		June 28
2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$40,095 $34,454 
Operating cash flows from finance leases387 142 
Financing cash flows from finance leases1,918 1,504 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases43,822 37,625 
Finance leases2,520 1,408 
NOTE 8: NON-CONTROLLING INTERESTS
Shake Shack is the primary beneficiary and sole managing member of SSE Holdings and, as a result, consolidates the financial results of SSE Holdings. The Company reports a non-controlling interest representing the economic interest held by the other members of SSE Holdings. The Third Amended and Restated Limited Liability Company Agreement, as further amended, (the "LLC Agreement") of SSE Holdings provides that holders of SSE Holdings, LLC membership interests ("LLC Interests") may,
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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, the Company will receive a corresponding number of LLC Interests, increasing the total ownership interest in SSE Holdings. Changes in the ownership interest in SSE Holdings while the Company retains its controlling interest in SSE Holdings will be accounted for as equity transactions. As such, future redemptions or direct exchanges of LLC Interests in SSE Holdings by the other members of SSE Holdings will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital.
The following table summarizes the ownership interest in SSE Holdings:
June 26, 2024December 27, 2023
LLC InterestsOwnership %LLC InterestsOwnership %
Number of LLC Interests held by Shake Shack Inc.39,966,973 94.1 %39,474,315 93.3 %
Number of LLC Interests held by non-controlling interest holders2,487,936 5.9 %2,834,513 6.7 %
Total LLC Interests outstanding42,454,909 100.0 %42,308,828 100.0 %
The weighted average ownership percentages for the applicable reporting periods are used to attribute Net income and Other comprehensive income to the non-controlling interest holders and were as follows:
Thirteen Weeks EndedTwenty-Six Weeks Ended
June 26
2024		June 28
2023		June 26
2024		June 28
2023
Non-controlling interest holders' weighted average ownership percentages6.3 %6.7 %6.5 %6.7 %
The following table summarizes the effects of changes in ownership of SSE Holdings on the Company's equity:
Thirteen Weeks EndedTwenty-Six Weeks Ended
June 26
2024		June 28
2023		June 26
2024		June 28
2023
Net income attributable to Shake Shack Inc.$9,668 $6,948 $11,708 $5,414 
Other comprehensive loss:
Unrealized holding loss on foreign currency translation adjustment— — (1)(4)
Transfers (to) from non-controlling interests:
Increase in additional paid-in capital as a result of the redemption of LLC Interests2,953 — 3,239 194 
Increase (decrease) in additional paid-in capital as a result of activity under stock compensation plan(320)145 (5,897)(2,554)
Total effect of changes in ownership interest on equity attributable to Shake Shack Inc.$12,301 $7,093 $9,049 $3,050 
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The following table summarizes the LLC Interests activity:
Thirteen Weeks EndedTwenty-Six Weeks Ended
June 26
2024		June 28
2023		June 26
2024		June 28
2023
LLC Interests activity under the Company's stock compensation plan
Number of LLC Interests received by Shake Shack Inc.18,514 44,341 146,081 139,248 
Redemption and acquisition of LLC Interests
Number of LLC Interests redeemed by non-controlling interest holders313,077 — 346,577 25,000 
Number of LLC Interests received by Shake Shack Inc.313,077 — 346,577 25,000 
Issuance of Class A common stock
Shares of Class A common stock issued in connection with redemptions of LLC Interests313,077 — 346,577 25,000