Shake Shack Provides Fourth Quarter 2021 Business Update

- Total Revenue of $203.3 million in 4Q21 and $739.9 million in FY21
- Shack sales continued to recover with 4Q21 Same-Shack sales growth of +20.8% versus 2020 and +2.2% versus 2019
- Shack-level operating profit margin expected to be approximately 16% of Shack sales in 4Q21
- Opened 36 new Company-operated Shacks in 2021 with unit development targeted to accelerate to 45-50 openings in 2022

Shake Shack Inc. (NYSE: SHAK) today announced preliminary unaudited results for the fiscal fourth quarter and the fiscal year ended December 29, 2021 ahead of presenting at the 24^th Annual ICR Conference today.

"We are pleased with the continued recovery we saw in the fourth quarter of 2021, outpacing historical seasonality, with average weekly sales of $74,000 compared to $72,000 in the third quarter of 2021, and Same-Shack sales versus 2019 growth of 2.2% in the fourth quarter, improving from down 7.3% in the third quarter, due to strength in both urban and suburban markets. We opened our first-ever drive-thru locations in Maple Grove, Minnesota and Lee's Summit, Missouri. Early results for these two Shacks are encouraging, and we look forward to continuing to expand our drive-thru footprint in the years to come," said Randy Garutti, Shake Shack CEO.

"While we are pleased by the fourth quarter, we also saw our operating hours drop in the last week of FY21 and the first two weeks of FY22 as a sharp increase in COVID cases had an impact on our ability to staff and keep all of our restaurants fully open. We expect these trends to continue to impact sales in our Company-owned Shacks and our licensed business. However as we move into the next chapter of the Shake Shack story, we remain committed to investing in what makes us so unique: our people, our digital transformation, format evolution and the guest experience," said Katie Fogertey, Shake Shack CFO.

Preliminary Unaudited Results for the Fourth Quarter Ended December 29, 2021⁽¹⁾:

• Total revenue in the fourth quarter of 2021 increased 29.0% to $203.3 million versus the same period in 2020, compared to an increase of 48.7% in the third quarter of 2021. The increase is inclusive of the favorable impact of the 53rd week in the fourth quarter of 2020, which resulted in incremental revenue of $11.1 million. Excluding the 53rd week in 2020, total revenue in the fourth quarter of 2021 increased 38.8% versus the same period in 2020.
• Shack sales in the fourth quarter of 2021 increased 28.5% to $195.9 million versus the same period in 2020, compared to an increase of 48.1% in the third quarter of 2021. This increase is inclusive of the favorable impact of the 53rd week in the fourth quarter of 2020, which resulted in incremental Shack sales of $10.7 million. Excluding the 53rd week, Shack sales in the fourth quarter of 2021 increased 38.1%.
• Same-Shack sales⁽²⁾ were up 20.8% in the fourth quarter of 2021 versus the same period in 2020, compared to up 24.8% in the third quarter of 2021. Additionally, Same-Shack sales were up 2.2% in the fourth quarter of 2021 versus the same period in 2019, an improvement from down 7.3% in the third quarter of 2021.
• Licensed revenue in the fourth quarter of 2021 increased 46.8% to $7.4 million versus the same period in 2020, compared to growth of 68.3% in the third quarter of 2021. This increase is inclusive of the favorable impact of the 53rd week in the fourth quarter of 2020, which resulted in incremental licensed revenue of $0.4 million. Excluding the 53rd week, licensed revenue in the fourth quarter of 2021 increased 61.0%.
• The Company opened 19 net system-wide Shacks in the fourth quarter of 2021, comprised of 13 net domestic Company-operated Shacks and 6 net licensed Shacks.
• Shack-level operating profit margin is expected to be approximately 16% of Shack sales.

Preliminary Unaudited Results for the Fiscal Year Ended December 29, 2021⁽¹⁾:

• Total revenue for the fiscal year ended December 29, 2021 increased 41.5% to $739.9 million versus 2020. This increase is inclusive of the impact of the 53rd week in the fourth quarter of 2020, which resulted in incremental revenue of $11.1 million. Excluding the 53rd week, total revenue in fiscal year 2021 increased 44.6%.
• Shack sales for the fiscal year ended December 29, 2021 increased 41.2% to $715.0 million versus 2020. This increase is inclusive of the favorable impact of the 53rd week in the fourth quarter of 2020, which resulted in incremental Shack sales of $10.7 million. Excluding the 53rd week, Shack sales in fiscal year 2021 increased 44.2%.
• Same-Shack sales⁽²⁾ increased 24.2% for the fiscal year ended December 29, 2021 versus 2020.
• Licensed revenue for the fiscal year ended December 29, 2021 increased 50.7% to $24.9 million versus 2020. This increase is inclusive of the impact of the 53rd week in the fourth quarter of 2020, which resulted in incremental licensed revenue of $0.4 million. Excluding the 53rd week, licensed revenue in fiscal year 2021 increased 54.8%.
• The Company opened 58 net system-wide Shacks in the fiscal year ended December 29, 2021, comprised of 35 net domestic Company-operated Shacks (net of one closure) and 23 net licensed Shacks (net of three closures). As of the end of the fourth quarter, there are 218 Company-operated domestic Shacks and 151 global licensed Shacks compared to 183 and 128, respectively, versus the prior year.
• General & administrative expenses are expected to be within our previously guided range of $86 million to $88 million for the fiscal year ended December 29, 2021, including $8 million of the approximately $9 million total Equity-based compensation.
• Equity-based compensation is expected to be approximately $9 million for the fiscal year ended December 29, 2021, in line with previous guidance.
• Depreciation expense is expected to be approximately $59 million to $62 million for the fiscal year ended December 29, 2021.
• Pre-opening costs are expected to be within the previously guided range of $13 million to $14 million for the fiscal year ended December 29, 2021.

Source: Shake Shack Inc.