Form 8-K - Current report
August 27 2024 - 4:16PM
Edgar (US Regulatory)
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0001620533
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2024-08-27
2024-08-27
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
August 27, 2024
Date
of Report (Date of earliest event reported)
SHAKE
SHACK INC.
(Exact
name of registrant as specified in its charter)
Delaware |
001-36823 |
47-1941186 |
(State
or other jurisdiction of
incorporation
or organization)
|
(Commission
File
Number) |
(IRS
Employer
Identification
No.) |
|
225
Varick Street, Suite 301
New
York, New York |
10014 |
|
(Address
of principal executive offices) |
(Zip
Code) |
(646)
747-7200
(Registrant's
telephone number, including area code)
Not applicable
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
¨ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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 $0.001 |
SHAK |
New
York Stock Exchange |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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. ¨
Item
2.05 Costs Associated with Exit or Disposal Activities.
Shack Inc. (the “Company”) regularly
evaluates its portfolio of Company-owned and operated Shack restaurants (“Shacks”). As a result, it has identified locations
that are underperforming at the Shack level in part due to changes in the trade area and, in some cases, are negatively impacting other
Shacks within their proximity by cannibalizing sales. These Shacks are not projected to provide acceptable returns in the foreseeable
future.
As a result of this evaluation, the Company has
determined to close nine Company-owned and operated Shacks in California, Ohio and Texas. These closings are expected to optimize the
Company’s footprint in these states and maximize profitable growth moving forward, and are not anticipated to impact the Company’s
plans to open additional Shacks in these states. The Company currently does not anticipate closing any additional Shacks based on this
evaluation for the foreseeable future.
Management in these Shacks will be offered a position
in neighboring Shacks and hourly team members will be eligible for rehire at other Shacks, and hourly team members (and any managers who
do not accept a transfer) will receive up to 60 days pay. This Shack closure plan was communicated to impacted employees on August 27,
2024 and is expected to be completed by September 25, 2024, subject to finalizing third-party agreements and other contingencies.
The Company expects to record cumulative pretax
charges in a range of approximately $28.0 to $30.0 million during the third quarter ending September 25, 2024 as a result of these Shack
closures. Cash costs are expected to be in a range of approximately $14.0 to $15.2 million. Included in these cash costs are pretax charges
currently expected to be in a range of $12.8 to $13.6 million related to lease termination costs and future lease obligations; employee-related
costs currently expected to be in a range of approximately $1.0 to $1.2 million; and other cash costs currently expected to be in a range
of approximately $0.2 to $0.4 million, which will primarily consist of charges related to Shack-related closing expenses. Non-cash costs
are expected to be in a range of approximately $14.0 to $14.8 million and primarily consist of asset impairment, accelerated depreciation,
and asset write-offs.
.
Item 2.06 Material Impairments.
The information set forth in Item 2.05 is incorporated
by reference into this Item 2.06.
Item 7.01 Regulation FD Disclosure.
The Company’s overall growth and strategic
priorities have not changed as a result of the announced Shack closures, including our previously disclosed expectations for Shack openings
in FY 2024 and beyond. The Company is reaffirming its fiscal third quarter 2024 and full-year 2024 guidance as set forth in the Shareholder
Letter dated August 1, 2024 furnished to the Securities and Exchange Commission as Exhibit 99.2 to the Current Report on Form 8-K on August
1, 2024.
Forward Looking Statements
This Current Report on Form 8-K contains “forward-looking
statements” with expectations concerning, among other things, the expected timing, benefits and costs associated with the Company’s
closure plan described in this report. Forward-looking statements include predictions of future results or activities and may contain
the words “expect,” “believe,” “will,” “can,” “anticipate,” “project,”
“should,” or words or phrases of similar meaning. The Company’s actual results or activities may differ materially from
these predictions. The Company’s future results could be affected by a variety of factors and other risks and uncertainties described
in its reports and other documents filed with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of
the date of this report, and the Company undertakes no obligation to publicly update them except as required by law.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
Shake Shack Inc. |
|
|
(Registrant) |
|
|
|
|
|
|
|
Dated: August 27, 2024 |
By: |
/s/ Ronald Palmese, Jr. |
|
|
|
Ronald Palmese, Jr. |
|
|
|
Chief Legal Officer |
|
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