Shake Shack : 2025 Annual Report of 2025
SHAK
Published on 04/29/2026 at 07:32 pm EDT
2025 ANNUAL REPORT
FULL YEAR 2025 RESULTS
$1,445.3M
Total Revenue
+ 15.4% growth year-over-year
$2,228.8M
System-wide Sales1
+ 15.9% growth year-over-year
TOTAL REVENUE
$1,445M
$1,253M
$1,088M
$900M
$704M
$523M
+ 15.4% growth year-over-year
GAAP Profitability Metrics:
$62.5M
Operating Income
$49.7M
Net Income
2020
2021
2022
2023
2024
2025
Non-GAAP Profitability Metrics:
SYSTEM-WIDE SALES
$2,229M
$1,923M
$1,702M
$1,378M
$1,123M
$779M
+ 15.9% growth year-over-year
$314.5M
Restaurant Level Profit²
22.6% of Sales
+ 21.9% growth year-over-year
$209.9M
Adjusted EBITDA3
14.5% of Total Revenue
+ 19.5% growth year-over-year
2020
2021
2022
2023
2024
2025
"System-wide sales" is an operating measure and consists of sales from Company-operated Shacks and licensed Shacks. The Company does not recognize the sales from licensed Shacks as revenue. Of these amounts, revenue is limited to licensing revenue based on a percentage of sales from licensed Shacks, as well as certain up-front fees, such as territory fees and opening fees.
"Restaurant-level profit," a non-GAAP measure, is defined as Shack sales less Shack-level operating expenses including food and paper costs, labor and
related expenses, other operating expenses and occupancy and related expenses. A reconciliation to the most directly comparable financial measure presented in accordance with GAAP is set forth in the Non-GAAP Financial Measures section within Item 7 of the Form 10-K for the fiscal year ended December 31, 2025.
"Adjusted EBITDA," a non-GAAP measure, is defined as EBITDA excluding equity-based compensation expense, Impairments, loss on disposal of assets, and Shack closures, amortization of cloud-based software implementation costs, as well as certain non-recurring items that we do not believe directly reflect our core operations and may not be indicative of our recurring business operations. A reconciliation to the most directly comparable financial measure presented in
2 accordance with GAAP is set forth in the Non-GAAP Financial Measures section within Item 7 of the Form 10-K for the fiscal year ended December 31, 2025.
Average Weekly Sales (AWS)1,2
AWS
Total YoY Shack Sales Growth (Decline)
10%
15%
15%
22%
16%
12%
AWS was flat in 2025 versus 2024.
We maintained our AWS levels through ongoing marketing initiatives and culinary innovation.
AWS $76K
$72K
$78K
$78K
$77K
$76K
Full
First
Second
Third
Fourth
Full
Year
Quarter
Quarter
Quarter
Quarter
Year
2025
2025
2025
2025
2025
2025
System-wide Shack Sales %2
Same-Shack sales (SSS) grew 2.3% in 2025 versus 2024 driven by continued
Fourth Quater 2024
First Quarter 2025
Second Quarter 2025
Third Quarter 2025
Fourth Quarter 2025
traction in our in-app value platform, increased hours of operations in our
5% 5% 5%
4% 4%
3% 2%
2% 2%
Shacks, and the launch of compelling culinary innovation.
AWS
0%
(1%)
(1%)
1% 1%
System-wide Shack Count
(5%)
Total SSS% Traffic % Price Mix%
Domestic Company - Operated Domestic Licensed International Licensed
436
369
518
184
+13.8%
579
206
44
659
239
47
System-wide Shack count grew 13.8% in 2025 versus 2024.
We opened a record of 45 new
311
106
22
126
25
149
33
39
295
329
373
Company-operated Shacks, along with 40 new licensed Shacks.
183 218 254
2020 2021 2022 2023 2024 2025
1. Average Weekly Sales (AWS) is calculated by dividing total Shack sales by the number of operating weeks for all Shacks in operation during the period. For Shacks that are not open for the entire period, fractional adjustments are made to the number of operating weeks such that it corresponds to the period of associated sales.
2 .For fiscal fourth quarter and fiscal year ended December 31, 2025, same-Shack sales and average weekly sales were calculated excluding the 53rd week. 3
We Stand For Something Good® in everything we do.
That means sourcing premium ingredients from partners with the same dedication to quality; thoughtful, well-crafted, responsible design; and a deep commitment to community support through donations, events, and volunteering. This year, we will be sharing our progress and what's ahead in our 2025 Stand For Something Good Summary. It will be made available at investor.shakeshack.com in the Corporate
Governance section. We will highlight our status on matters from social impact to environmental responsibility and governance. In creating this summary, we will
engage stakeholders, collect impact data, work with our leadership team to ensure alignment, highlight suppliers' focus on quality ingredients, and identify areas for progress in the future.
OUR 2026 STRATEGIC PRIORITIES
BUILDING ON MOMENTUM SHARPENING IMPACT IN 2026.
OUR PURPOSE
WHY WE DO WHAT WE DO
STAND FOR SOMETHING GOOD:
We will nurture the world's communities by delivering
BUILD
a culture of leaders
DRIVE
comp sales behind culinary, marketing + digital innovation
ACCELERATE
our licensed business
OPTIMIZE
restaurant + supply chain operations
BUILD +
OPERATE
Shacks with best-in-class returns
INVEST
in long term strategic capabilities
exceptional FOOD and
HOSPITALITY.
Everything we do is in service of our
TEAM MEMBERS, GUESTS, and
COMMUNITIES.
Our prosperity is a means to an end, with the end being IMPROVING THE WORLD in which we work,
live, and play.
OUR MISSION
WHAT WE ASPIRE TO ACCOMPLISH
To bring the world's BEST fine casual experience to as many guests, team members, and communities
as possible.
In doing so, we will bring PRIDE to everyone in our company and deliver a strong financial benefit for our team members and shareholders.
Dear Valued Shareholders,
As I reflect on 2025, I am deeply energized by the progress Shake Shack has made and the opportunity that lies before us. Nearly two years into my role, I am more excited than ever to be part of this extraordinary company-one defined by exceptional people, a powerful culture, and an unwavering commitment to enlightened hospitality.
My gratitude starts with the remarkable teams in our Shacks around the world. Every day, they welcome guests with warmth and care, serving freshly prepared food made with pride and precision. I am equally thankful for the leadership team we have assembled-an experienced, balanced, and deeply capable group that combines long-standing institutional knowledge with new perspectives and best practices.
Our Purpose
Shake Shack was founded on a powerful idea: that great food, thoughtfully prepared and served with genuine hospitality, should be accessible-not exclusive. What began as a hot dog stand built to help revive a community park has grown into a global brand. We aspire to bring fine-dining quality food and hospitality to communities around the world.
Delivering on this aspiration is not easy. It requires the highest-quality ingredients, culinary-forward recipes, food prepared fresh to order, and efficient, convenient service-every time. We believe we are proving that food served fast does not have to mean compromising on quality.
2025 Performance Highlights
For the year, we grew Total revenue by more than 15% and opened 85 new Shacks system wide. In our Company-operated business, same-Shack sales increased 2.3%, Restaurant-level profit margin expanded 120 basis points to 22.6%, and adjusted EBITDA grew approximately 20% to about $210 million. These results reflect the strength of our strategy and the dedication of our people.
Operational Excellence as a Foundation
Operational excellence is foundational to our long-term strategy. In 2025, we completed the first full year under our new labor model, which is designed to place the right people in the right roles at the right times. This approach is not about cutting labor-it is about thoughtful deployment that enhances hospitality, efficiency, and team member engagement.
The rollout of our performance scorecard across company-operated Shacks has driven greater accountability and consistency. Attainment to the labor guide improved from roughly 50% of Shacks meeting targets in mid-2024 to consistently above 90% in 2025. As a result, we achieved reduced wait times-down from approximately seven minutes in 2023 to under six minutes in 2025-and improved team member retention, with average tenure up nearly 40% since 2023.
Strengthening Our Supply Chain
Like many in our industry, we faced significant commodity inflation in 2025, particularly in beef. We responded by accelerating long-term supply chain initiatives focused on diversification, logistics, and scale. Through comprehensive RFPs, onboarded suppliers, and a more efficient freight and distribution network, we strengthened resilience and mitigated cost pressures without compromising quality or resorting to outsized price increases. The groundwork laid in 2025 positions us for further margin expansion in 2026 and beyond.
6
Culinary Innovation and Brand Building
Our improved operational discipline has enabled greater confidence and agility within our culinary organization. In 2025, we formalized a disciplined stage-gate innovation process supported by a 12-18 month innovation calendar. This framework ensures new offerings meet our highest standards for quality, guest appeal, and operational feasibility.
The results were compelling. We launched one of our most successful limited-time shakes, the Dubai Chocolate Shake, and expanded side offerings with the addition of Fried Pickles and Onion Rings-the latter earning a permanent place on our core menu. We also invested in improving the quality of our core sandwiches, fries, and beverages, strengthening the foundation of our menu.
Our marketing efforts reinforced what makes Shake Shack special: freshly prepared, cooked-to-order food made by skilled team members each day. Combined with targeted digital value initiatives, including our $1,
$3, $5 in-app platform, we drove strong guest engagement and increased app downloads by approximately 50% since the launch of this offer. We have laid a strong foundation for guest engagement and are excited for the launch of our loyalty program later this year.
Disciplined Development and Global Growth
2025 was a milestone year for development. We opened 45 new company-operated Shacks and successfully entered new domestic markets, demonstrating the broad applicability of our brand. Through design simplification and value engineering, we reduced average net build costs to under $2 million per Shack-approximately 20% lower than the prior year-while maintaining strong unit volumes and margins.
Our licensed business also delivered strong momentum with 40 new openings in 2025. Performance was particularly strong in newer markets such as Canada and Israel, as well as in the Middle East, Japan, the U.K., and U.S. airports. Strategic partnerships-including expansion into Hawaii, Vietnam, Panama, and entertainment destinations-continued to strengthen Shake Shack's global presence and
brand recognition.
Looking Ahead
As we enter 2026, we do so with confidence and a clear strategic focus. Our priorities center on profitable growth, margin expansion, and targeted investments in our brand and infrastructure. Specifically, we are focused on:
Building a culture of leaders
Optimizing restaurant and supply chain operations
Driving comp sales through culinary, marketing, and digital innovation
Building and operating our Shacks with best-in-class returns
Accelerating our licensed business
Investing in long-term strategic capabilities
We believe these priorities will deliver sustainable value for our guests, team members, and shareholders. Thank you for your continued support and belief in Shake Shack.
Sincerely,
Rob Lynch, CEO
Danny Meyer, Chairman & Founder
7
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
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
SHAKE SHACK INC.
(Exact name of registrant as specified in its charter)
Delaware 47-1941186
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
225 Varick Street, Suite 301, New York, New York 10014
(Address of principal executive offices and 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 exchange on which registered
Class A Common Stock, par value $0.001 SHAK New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
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 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). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 standard provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes No
The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant, as of June 25, 2025, the last business day of the Registrant's most recently completed second fiscal quarter, was approximately $5,163,677,020, computed using the closing price on that day of $133.90. Solely for purposes of this disclosure, shares of common stock held by members part of the Voting Group pursuant to the Stockholders Agreement, as amended, of the Registrant as of such date have been excluded because such persons may be deemed to be affiliates. This determination of affiliates is not necessarily a conclusive determination for any other purposes.
As of February 18, 2026, there were 40,257,722 shares of Class A common stock outstanding and 2,434,789 shares of Class B common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive Proxy Statement for its 2026 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K.
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SHAKE SHACK INC.
TABLE OF CONTENTS
Cautionary Note Regarding Forward-Looking Statements
1
Part I
2
Item 1. Business
2
Item 1A. Risk Factors
13
Item 1B. Unresolved Staff Comments
38
Item 1C. Cybersecurity
38
Item 2. Properties
40
Item 3. Legal Proceedings
41
Part II
42
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
42
Item 6. Selected Financial Data
44
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
45
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
64
Item 8. Financial Statements and Supplementary Data
65
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
112
Item 9A. Controls and Procedures
112
Item 9B. Other Information
112
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
113
Part III
114
Item 10. Directors, Executive Officers and Corporate Governance
114
Item 11. Executive Compensation
114
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
114
Item 13. Certain Relationships and Related Transactions, and Director Independence
115
Item 14. Principal Accounting Fees and Services
115
Part IV
116
Item 15. Exhibits and Financial Statement Schedules
116
Item 16. Form 10-K Summary
116
SIGNATURES
121
EXHIBIT INDEX
117
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Cautionary Note Regarding Forward-Looking Information
This Annual Report on Form 10-K ("Form 10-K") contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, 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-K are forward-looking statements, including, but not limited to, statements about our growth, including our long-term growth goals, strategic priorities and initiatives, and liquidity. Forward-looking statements discuss our current expectations, targets and projections relating to our 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," "preliminary," "project," "projection," "plan," "seek," "targets," "may," "could," "would," "will," "should," "can," "can have," the negatives thereof and other similar expressions.
Forward-looking statements reflect our current views with respect to future events and are based on certain assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from trends, plans, or expectations set forth in the forward-looking statements, as set forth in this Form 10-K. 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 our expectations include our 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 impact of tariffs, the impact of Shack closures, our management of digital capabilities and expansion into delivery, as well as kiosk, drive-thru and multiple format investments, our ability to maintain and grow sales at existing Shacks, and risks relating to the restaurant industry generally. You should evaluate all forward-looking statements made in this Form 10-K in the context of the risks and uncertainties disclosed in Part I, Item 1A of this Form 10-K under the heading "Risk Factors," in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," and in Item 7A "Quantitative and Qualitative Disclosures About Market Risk."
The forward-looking statements included in this Form 10-K are made only as of the date hereof. We undertake 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. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.
Part I
Item 1. Business.
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, it operates and controls all of the business and affairs of SSE Holdings. As a result, Shake Shack Inc. 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. Shake Shack Inc. Class A common stock trades on the New York Stock Exchange under the symbol "SHAK." 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.
OVERVIEW
Shake Shack serves modern, fun and elevated versions of American classics using only premium ingredients. We are known for our made-to-order Angus beef burgers, crispy chicken, hand-spun milkshakes, house-made lemonades, beer, wine, and more. With our fine-dining roots and a commitment to crafting uplifting experiences, Shake Shack has become a cult brand. Our purpose is to Stand For Something Good®, from premium ingredients and employee development to inspiring designs and community investment.
Originally founded in 2001 by Danny Meyer's Union Square Hospitality Group ("USHG"), which owns and operates some of New York City's most acclaimed and popular restaurants - such as Union Square Cafe and Gramercy Tavern, to name a few - Shake Shack began as a hot dog cart to support the rejuvenation of New York City's Madison Square Park through its Conservancy's first art installation, "I Taxi." The cart was an instant success, with lines forming daily throughout the summer months over the next three years. In response, the city's Department of Parks and Recreation awarded Shake Shack a contract to create a kiosk to help fund the park's future. In 2004, Shake Shack officially opened. It soon became a gathering place for locals and visitors alike, and a beloved New York City institution, garnering significant media attention, critical acclaim and a passionately devoted following. Since the original Shack opened in 2004 in Madison Square Park, the Company has expanded to 659 Shacks system-wide, of which 373 were Company-operated Shacks and 286 were licensed Shacks, including Shacks across London, Hong Kong, Shanghai, Singapore, Mexico City, Istanbul, Dubai, Tokyo, Seoul and more. Unless the context otherwise requires or unless specific reference is made to our licensed business, statements in this Part I of our Annual Report on Form 10-K refer to Shake Shack's Company-operated business.
WE STAND FOR SOMETHING GOOD
Our Purpose - Stand for Something Good: We will nurture the world's communities by delivering exceptional food and hospitality. Everything that we do should be in service of our team members, guests, and communities. Our prosperity is a means to an end, with the end being improving the world in which we work, live, and play.
Our Mission - To bring the world's best fine casual experience to as many guests, team members, and communities as possible and, in doing so, to bring pride to everyone in our company and to deliver a strong financial benefit for our team members and shareholders.
HUMAN CAPITAL MANAGEMENT
To ensure the near-term and long-term success of our business, we are focused on recruiting, developing. and rewarding high performing teams. Our teams are made up of people who have integrity, who are warm, motivated, self-aware, and intellectually curious alongside having the competencies and skills that continue to foster our growth. We believe this culture is fundamental to the way we operate our business, and a key driver of our ability to deliver great guest experiences, and therefore, successfully grow our footprint.
As of December 31, 2025, we had 13,873 team members, of whom 13,427 were hourly team members and Shack-level managers and 446 were Shack Support Center personnel.
Talent
We attract and recruit a workforce of top talent through employer branding, diversification of recruitment channels, and optimal recruiting practices to create a talent pipeline to support current staffing needs as well as enabling new Shack growth. At Shake Shack we foster an environment that attracts and welcomes individuals of all abilities, backgrounds, cultures, perspectives, skill sets, and experiences. Having a high performing and engaged workforce is important, and we seek to understand the needs of our teams through feedback to help to ensure they feel recognized, connected and proud to work at Shake Shack.
We are dedicated to providing content and experiences that develop and retain team members. At Shake Shack, we continue to rethink how we provide career growth opportunities with lattice mobility replacing the traditional promotion ladder to ensure team members continue to succeed in a market that is rapidly changing. We offer training programs to foster leaders from within, such as:
Our nine-week Rise program is created for exempt managers and California non-exempt managers and focuses on elevating leadership capabilities through coaching, building effective team environments, and driving meaningful business impact within the Shack.
Our nine-week Emerge program is targeted towards assistant general managers and is designed to empower them to influence their teams, drive accountability and deliver results through strategic, data-informed decisions.
Our 18-week Shift Up program is a leadership development program for early career Shack managers that provides training through cohort mentoring, business integration and real-world Shack experience to help improve their skill sets and grow their confidence to become senior leaders in our Shacks.
To make sure every Shake Shack team member at every level has a positive experience, we strive to build an inclusive workplace, where all team members have the support and resources they need to succeed and feel a sense of belonging. We foster this sense of belonging in part through our employee resource groups, which are open to all team members. Another way we support our team members is through the administration of our HUG Fund, a 501(c)(3) organization funded by and available for our team members. The HUG Fund provides timely financial assistance to team members impacted by emergency circumstances beyond their control and means.
We care about our team and are committed to setting them up for success at Shake Shack and in their future careers. In fiscal 2025, we promoted 3,720 people throughout our Company. We are proud of our leaders who graduate from hourly roles to managers, managers to General Managers and General Managers to regional leadership. This year, 61% of our new General Managers and 63% of new Area Directors were promoted from within.
Total Rewards
Our team members are at the center of all we do, and we remain committed to investing in their success and well-being. We continue to work diligently to ensure our team members have access to benefits to support their personal and family wellness and continue to explore new and meaningful ways to reward our high performing team members.
The following summarizes some of the benefits offered to eligible team members:
Comprehensive health insurance coverage and health and flexible spending accounts are offered to eligible team members working 25 hours or more each week.
We offer eligible team members a 401(k) plan that includes a competitive matching component to support and encourage retirement savings.
Our tipping availability has offered team members the opportunity for increased hourly wages and is optional if our guests are inclined to reward our teams for additional hospitality and service.
Team members can accrue paid time off and sick time based on hours worked, which can be used for personal needs or to care for family members.
Parental leave is available for Shift Managers and above who are new parents welcoming a child through birth, adoption, or foster placement.
Our Shake Shack Field Management Bonus Program incentivizes our leaders to grow both sales dollars and operating profit percentage.
General Managers participate in our equity-based compensation program, empowering them to share in the success of our business.
GUEST EXPERIENCE
Danny Meyer's original vision of Enlightened Hospitality guided the creation of Shake Shack's unique culture. We believe that culture is the single most important factor in our success. To maintain this, we take care of our teams first and foremost, and this allows us to take care of our guests, our communities, our suppliers, and our shareholders. We strive to create a personalized experience for our guests at each of our Shacks around the world. We achieve this through innovations in service, trendsetting culinary innovation, and the design of warm community gathering places.
Engaging with our Guests
Shake Shack grew up alongside social media and we believe we have benefited from our close relationship with passionate fans who want to engage with us and share their real-time experiences. We're proud to be recognized by media, influencers, and creators alike, garnering attention around the world. Our positioning and brand voice, derived from the spirit, integrity and light-hearted nature of Shake Shack, are reinforced by our contemporary, responsible designs and hospitable team members. This identity also anchors our marketing efforts, with the heart of our marketing strategy to awaken the world to joyful eating through uplifting experiences, cultivating community and connecting with guests both in our Shacks and through digital channels.
Capitalizing on Our Brand Strength
Since 2004, Shake Shack has become a globally recognized brand with strong consumer awareness relative to our current footprint of 659 Shacks system-wide. We pride ourselves on providing a vibrant and authentic community gathering place that delivers an exceptional experience to our loyal guests. One great advantage for Shake Shack has been our birthplace and headquarters in New York City and our origination from a fine-dining company, which have contributed to influential media visibility and brand recognition. Shake Shack continues to receive recognition for being a fan and industry favorite, and was named to Restaurant Business' Top 500 Chain Restaurants and QSR Magazine's QSR 50 in 2025.
Social Media
Just as we design our Shacks as community gathering places, our social media strategy creates an online community gathering place. We interact with fans across Instagram, TikTok, X (formerly Twitter), Facebook, and more by sharing engaging content, comments, replies and the use of user-generated content; a quick search of "#shakeshack" on Instagram reveals over 1.1 million organic posts from our fans.
Brand Marketing Model
In 2025, we evolved our brand marketing model to create a durable, demand-driving engine that supports long-term sales growth, in part, by adopting a unified approach across advertising, paid media, insights & analytics, and earned/social engagement. As part of this evolution, we invested in paid media at scale for the first time supporting campaigns such as the Dubai Chocolate Shake, The Big Shack, and $1 soda in-app only promotion. The evolution of our brand marketing model has
informed our strategic brand positioning and selection of a new creative agency partner capable of elevating how we communicate the Shake Shack story.
Digital Evolution
We are building a digital guest experience that aims to turn every visit into a routine and every order into growth. By aligning our roadmap across guest journey improvement, loyalty, retention, and digital excellence, we're creating a growth flywheel that drives both comparable and incremental sales. We are making investments to amplify Shake Shack's hospitality through a platform where ordering is frictionless, returning is rewarding, and reliability makes us a part of our guests' everyday lives. By weaving these priorities into one journey, we aim to scale growth of our digital channels and deepen loyalty. Our digital initiatives are defined by each of the following themes:
Personalization and Hospitality - Leveraging data and guest insights to anticipate needs, tailor experiences, and bring hospitality to our digital channels at scale. We aim to make each guest feel recognized and valued.
Rewarding Guests with Value - Creating meaningful motivating value exchanges that deepen loyalty and help guests choose Shake Shack in a crowded space.
Easy, Reliable and Delightful Experiences - Delivering a frictionless journey that is fast, intuitive and dependable across app and web. From improving efficiency and availability to seamless checkout and thoughtful user experience interfaces, we remove barriers and deliver experiences that keep guests coming back.
We are focused on driving traffic to our Company-owned app and web channels, including growing the number of app and web sessions by acquiring and converting users across our digital ecosystem. Our mobile app drives higher frequency and offers a better guest experience, which we will continue to invest in. We also continue to offer third-party delivery through Uber Eats, DoorDash, Grubhub and other third-party delivery providers.
Personalized Offers and Challenges
In 2025, we integrated our new offer management tool with our guest data platform and messaging platform to deliver personalized offers and challenges to targeted guest segments. This enabled our marketing team to tailor offers to specific guests based on that guest's behavior in Shack Shack's ecosystem, allowing our messaging and offers to be more efficient and drive incremental value. In addition to the back-end integration, we improved how users view and redeem offers on our mobile apps and website to make it a more user-friendly experience. The integration and improvements also enabled the capability to run "challenge" offers where a user is rewarded for performing specific actions over multiple visits to Shake Shack, for example, visit three times in 30 days for a free Shackburger.
Kiosk
In 2025 we continued to invest in the development of our kiosk platform including releasing the capability for guests to identify themselves at our kiosks. By simply entering their phone number at kiosk, guests are able to view a personalized kiosk experience, access tailored offers, and participate in the challenges mentioned above. This has increased engagement on our kiosks and improved our tracking of guest behavior across ordering channels. Additionally, we have made updates to the way users navigate our menu on kiosk, improving usability and merchandising of Shake Shack's menu.
Culinary Innovation
Shake Shack's unique value proposition is partially defined by our roots in fine-dining, which inspire us to offer premium food and beverages, carefully crafted from a range of classic American foods. We embrace that heritage and are committed to sourcing premium ingredients while offering excellent value to our guests. Our core menu is inspired by elevated versions of American classics.
Fiscal 2025 represented a meaningful shift in how we develop and manage culinary innovation across the Company. We strengthened our culinary and menu strategy by building a dedicated team and implementing a more diligent approach to taste testing, validation, and product development. This included establishing a strategic culinary calendar planned 12 to 18 months in advance, supported by guest feedback and insights to ensure each item meets our standards for quality, execution, and guest appeal. This new process has enabled us to deliver a consistent pipeline of compelling limited-time offerings across burgers and sandwiches, sides, shakes, and beverages, while reinforcing the quality of our food and our fine-casual positioning. Importantly,
we have shifted the way we think about culinary innovation-viewing it not only as a product development function but as a core driver of guest traffic and sales mix.
Shack-Wide Limited Time Offerings ("LTO")
Our LTO program generally features a new, premium burger or chicken sandwich, special side innovation, and unique beverages and shakes for varying periods of time throughout the year. In fiscal 2025, these offerings highlighted several distinct culinary themes and showcased bold flavors and premium ingredients.
Black Truffle Menu - From September 2024 through April 2025, we reintroduced our beloved Black Truffle sauce made with real black truffle oil, with Black Truffle ShackStack as an option, combining our iconic 'Shroom burger with one of our 100% Angus beef patties.
Summer BBQ Menu - In April, we brought back our seasonal BBQ flavors across burgers and new chicken sandwiches, complemented by sides of Fried Pickles and Spicy Fries, showcasing our signature Shack-crafted sauces and craveable combinations for the summer season.
Dog Days - In July, we launched a limited-time hot dog menu featuring elevated, inventive toppings, providing guests with unique options beyond our core burger and chicken offerings.
French Onion Menu - In September, we launched the French Onion Burger, 'Shroom, and ShackStack along with accompanying sides including Onion Rings and Parmesan Garlic Fries, bringing rich, fine-dining-inspired flavors to our LTO offerings. Onion Rings were so well received by our guests that they will join the core menu permanently in 2026.
Big Shack - In November, we introduced a more deluxe version of our famous ShackBurger made with two 100% Angus beef patties split between three layers of bun and topped with our secret sauce, lettuce, American cheese, pickles, onions, and tomatoes.
Beverage and Dessert Innovation - Throughout fiscal 2025, we continued to expand our beverage innovation pipeline, highlighted by the Dubai Chocolate Pistachio Shake, one of our strongest Shake LTOs to date. Following the success of the Dubai Chocolate Pistachio Shack, we added the same crackable feature to one of our holiday Shake LTOs - the Peppermint Bark Chocolate Shake. We also offered a Mini Raspberry Popping Boba add-on for lemonades and iced teas, delivering a premium and fun sensory surprise.
Engaging the Community
Community and Charitable Partners
We regularly serve our communities in a variety of ways including Donation Days to show support for local schools and organizations. Guests who participate in these fundraisers have a portion of their order totals donated to a local nonprofit by mentioning the fundraiser when placing an order in-Shack or using a fundraiser code on the Shack app, website, or kiosk for pick-up or delivery. In 2025, Donation Days supported several of our Shack communities in need following disasters, including the Los Angeles-area wildfires and floods in North Carolina. For new Shack openings, we partner with local charities to donate
$1 from each designated menu item sold on opening day. In some markets, we have existing tenured partnerships with organizations and in other markets we are building new relationships in our local communities as we open Shacks.
A Warm Community Gathering Place
Our Shacks are so much more than a place to get burgers, fries and shakes; they're places for the community to gather. We place a high premium on connecting with our communities through the physical design of our Shacks and by the local causes we support. Each Shack is designed to convey a consistent brand message while also tailoring marketing efforts to its specific region. We may offer menu items that feature ingredients and beers specific to a Shack's community, and we may team up with local chefs and restaurants to offer our guests unique, collaborative menu items. We also collaborate with local artists and designers to bring beautiful artwork and installations to our Shacks. We participate in local celebrations and develop relationships within the community, helping position Shake Shack as a premium brand that is connected to its neighborhoods.
DEVELOPMENT
During fiscal 2025, we focused our development strategy on improving how we build and open Shacks, which included reducing build costs, implementing strategies to better predict and forecast timelines and manage our supply chain, evolving our design efforts to standardize key components of our Shacks while maintaining brand quality and guest experience, and opening a mixed portfolio of formats that allowed us to maximize our potential in each market. We opened 80 net new system-wide Shacks, which included 44 net Company-operated and 36 net Licensed Shacks. We believe we remain well-positioned to continue significant, sustainable financial growth and we plan to continue to execute our growth strategies.
Company-Operated Shacks
We continued to expand our Company-operated footprint with 45 new-Shack openings for the year, our largest class of openings to date. These openings advanced our disciplined growth strategy and extended our presence across a broader set of markets, particularly outside the Northeast. As we grow, we remain focused on building a scalable foundation that supports our long-term opportunity, including our target to reach approximately 1,500 Company-operated Shacks, reflecting significant whitespace across both established and new U.S. markets. As of December 31, 2025 we had 373 Company-operated Shacks.
Building a Scalable Pipeline
Throughout 2025, we strengthened the capabilities that underpin our development strategy. Our real estate team continued to leverage data analytics, traffic and demographic insights, and stronger developer partnerships, and expanded local brokerage relationships to support high-quality site selection. We anticipate that these efforts will contribute to a strong future pipeline and reinforce our ability to deploy capital efficiently as we scale.
We made further progress in reducing development costs and delivered approximately 20% reduction in net cost-to-build for the year, despite continued inflationary pressures across the industry. In fiscal 2025, average investment cost was approximately
$2.3 million, or approximately $1.9 million net of tenant improvement allowances received from our landlords. We lowered our build costs by implementing further standardization, including our first free-standing drive thru prototype. We further refined key building systems, improving the cost profile on finishes, as well as making meaningful improvements to interior furniture, kitchen equipment optimization, signage, and mechanical, electrical, and plumbing systems across all formats.
Gross investment cost of a new Shack, which includes costs related to leasehold improvements, furniture, fixtures and equipment ranged from approximately $1.6 million to $4.1 million in fiscal 2025. Shacks opened in fiscal 2025 took between 15 and 51 weeks to build. One Shack experienced an extended build time largely due to landlord and utility company delays. Excluding this Shack, the Shack class of 2025 took between 15 and 37 weeks to build. Shacks opened in fiscal 2024 took between 14 and 39 weeks to build. In fiscal 2026, we look forward to unlocking further opportunities for improving on how we build our Shacks including continuing our efforts to maintain our build cost structure and deliver strong cash-on-cash return across accelerated growth in new Shacks.
Executing a Multi-Format Strategy
We are focused on creating a balanced portfolio of Shacks across multiple formats and improving how we build our Shacks. In 2025, we continued to refine our multi-format approach, including core urban locations, suburban drive-thrus, small-format Shacks, and select flagship experiences. Innovation remained central to this strategy, with meaningful progress in kitchen design, equipment optimization, and standardized production models, all aimed at unlocking higher throughput and improved unit-level performance. Our first-of-its-kind Shack at The Battery in Atlanta showcased the benefits of this work, featuring a new equipment package, operational enhancements, and a broadened beverage platform, including a full bar, that delivered strong volumes.
Optimizing our Portfolio
Alongside our investments in new Shacks, we continued to reinvest in our existing Shacks to maintain operational excellence and deliver consistent guest experiences. In 2025, we deployed capital towards facility upgrades, remodels, and ongoing digital enhancements, including improvements to kiosk functionality and reliability. As our portfolio expands and matures, these reinvestments remain central to sustaining high standards across our system, supporting strong operations, guest experience
and sales growth. Together, our development, innovation, and operational initiatives position us to continue driving long-term growth and attractive unit-level economics across our Company-operated footprint.
Growing Our Licensed Shack Business
Our licensed business continues to serve as a key driver for enhancing brand visibility through iconic flagships in major cities around the world. During 2025, we expanded our global footprint through disciplined partner selection and strong performance from both new and existing markets. As of December 31, 2025 we had 286 licensed Shacks in operation.
Internationally, fiscal 2025 was marked by continued expansion, format development, and menu innovation. We opened 36 new licensed Shacks across 12 countries, including four in China and Hong Kong, where new product introductions, most notably our first-ever fish sandwich, generated significant guest adoption and informed subsequent product rollouts. Growth in Canada, Japan, and other regions exceeded expectations, and we signed several new long-term development agreements, including a plan to open 15 Shacks in Vietnam with Maxim's and a 12-Shack partnership in Panama with Grupo Attie-Multifood Enterprises. During fiscal 2025, we permanently closed three of our international licensed Shacks.
Domestically, we opened four licensed Shacks and expanded our footprint in major airports, travel plazas, and high-traffic entertainment venues, benefiting from strong demand driven by elevated leisure and business travel. Our partnership with Delta Air Lines grew meaningfully in 2025, with Shake Shack now served in select routes across flights originating from 13 domestic airports via First Class pre select and supported by strong guest feedback. In addition, we executed new licensing agreements with Union MAK Corporation to bring Shake Shack to Hawaii and also with PENN Entertainment to bring Shake Shack to 10 U.S. casino properties, expanding our nontraditional format growth and aligning with our strategy of entering high-volume destinations through experienced operators. During fiscal 2025, we permanently closed one of our domestic licensed Shacks.
OPERATIONS
At Shake Shack, we believe our success depends upon maintaining efficient and nimble operations. Just as we invest in our menu items, digital offerings, drive-thru and in-Shack experiences, we take special care to ensure our supply chain, distribution, quality assurance and management information systems are constantly being evaluated and streamlined to ensure cohesiveness.
Optimize Restaurant Operations
We continue to drive profitability through a focus on developing our team members, reinforcing performance accountability, and executing with operational excellence. In fiscal 2025, we strengthened the foundation of our business by executing on initiatives that improved efficiency, operational consistency, and the overall guest experience. We implemented a performance scorecard that drives accountability and visibility across our Shacks, helping to drive improvements in guest experience and overall profitability. To ensure that our teams are equipped to provide exceptional service, we invested in tools that empower our teams to operate more efficiently, including smarter scheduling systems and targeted coaching. These efforts have contributed to stronger performance across key operational metrics, including labor optimization, speed of service, and order accuracy. As we continue to strengthen productivity and operational discipline, we are also seeing corresponding improvements in guest experience metrics. We remain focused on identifying and executing opportunities to streamline our operations, including optimizing staffing levels, refining processes, and consistently delivering an elevated guest experience.
Sourcing and Supply Chain
We pride ourselves on sourcing premium ingredients from partners who share our dedication to quality, such as 100% all-natural proteins with no added hormones, that are humanely raised and source-verified. We are currently sourcing 100% cage-free eggs across our domestic supply chain. We continue to strive to improve our sourcing practices across our international supply chain while maintaining the quality and standards we are known for.
Our domestic regional strategy for ground beef production is designed to help ensure we consistently serve freshly ground beef at our domestic Shacks. As of December 31, 2025, we have 11 approved raw beef suppliers and seven approved ground beef
processors in the U.S. who produce our burgers on a daily basis. To ensure quality, we maintain strict standards for selecting and contracting domestic suppliers for our major ingredients, including beef patties, chicken, crinkle cut fries, potato buns, custard, portobello mushrooms and cheese sauce.
We believe we have developed a reliable supply chain, but have also taken strides to identify alternative sources to help mitigate business risk and optimize costs, including diversifying our supplier base and supplier footprint, and optimizing logistics. As Shake Shack continues to grow, we aim to refine ingredients and products to improve consistency and reduce back of house labor inputs, unlock transportation and logistics efficiencies, and enhance sourcing discipline through structured bid processes. Refer to "Risks Related to Our Growth Strategies and Operations", in Item 1A, Risk Factors, for additional information relating to our suppliers.
Distribution
We have a centralized distribution process with one distributor, which we refer to as our "broadline" distributor, to provide nearly all of our food distribution services in the U.S. As of December 31, 2025, approximately 95% of certain food and beverage ingredients including chicken, fries and custard were fulfilled through our broadline distributor for distribution and delivery to each Company-operated Shack which collectively represents approximately 42% of our total purchases.
As of December 31, 2025, we were utilizing 20 affiliated distribution centers to supply our Company-operated Shacks. We recognize that the safety and consistency of our products begins with our suppliers, and therefore, we require our suppliers to meet certain criteria and strict quality control standards in the production and delivery of our food and other products. Additionally, we regularly evaluate our broadline distributor to ensure the products we purchase conform to our standards and contracted prices are fair and competitive.
Food Safety and Quality Assurance
Food safety is our top priority. We have rigorous quality assurance and food safety protocols in place throughout our supply chain and in our Shacks. We conduct quarterly, third-party food safety assessments of our Shacks, utilize technology to manage and document food safety procedures, and ensure appropriate corrective actions are implemented for any noncompliance findings. In fiscal 2025, we implemented Belltower Instant Recall System, an industry-leading system for communicating product recalls from supplier to distributor to restaurant level. The implementation of this system improves our ability to react to and communicate any ingredient recalls with our Shacks.
We have a comprehensive supplier and ingredient selection process, and we maintain a list of approved suppliers that meet our standards. We thoroughly review the results of suppliers' internal and external quality audits, insurance coverage, and track record on an on-going basis. To stress test for exceptional scenarios, we conduct mock food recalls across a selection of our suppliers on a quarterly basis. We have developed and implemented training and operating standards related to the food preparation, cleanliness and safety in each Shack, and we have a dedicated Quality Assurance team.
Environmental Responsibility
We focus on environmental responsibility across our operations, including with respect to ingredients, where we are committed to sourcing premium ingredients from like-minded suppliers. We remain dedicated in our efforts to reduce our environmental footprint by using streamlined and minimal packaging elements and continue to use more sustainable, certified packaging materials whenever possible. We track and calculate scope 1 and scope 2 greenhouse gas emissions to publicly report in compliance with industry standards and assess our emissions year-over-year.
Management Technology Services
During fiscal 2025, we advanced our digital guest experience, operator tools, and underlying technology platforms to support scalable growth and enhance operational performance. On the guest-facing side, we introduced behavior-based promotions, strengthened guest recognition on kiosks, and improved the digital ordering experience. Foundational improvements to kiosk performance, fraud prevention, and development processes further increased scalability of our digital platform. We also
advanced our enterprise operational and analytics strategy to strengthen data-driven decision-making across the organization. We further advanced the technology backbone that supports enterprise operations and restaurant systems.
As cybersecurity threats continue to increase in sophistication and frequency, we remained focused on strengthening our cyber maturity and safeguarding guest and Company data and continue to invest in our security and technology infrastructure and enhancing threat detection capabilities.
As artificial intelligence becomes more embedded in business operations, we expanded our governance framework for artificial intelligence technologies, including updating our business-use policy and implementing guardrails that promote responsible adoption in alignment with emerging regulatory expectations.
COMPETITION
The restaurant industry is highly competitive and fragmented, with restaurants competing on a variety of fronts, including taste, price, food quality, service, location and the ambiance and condition of the restaurant. Our primary competitors include other fast casual restaurants, quick service restaurants and casual dining restaurants. Our competition includes multi-unit international, national, and regional chains, as well as a wide variety of locally-owned restaurants. Our competitors may operate company-owned restaurants, franchised restaurants or some combination. Many of our competitors offer breakfast, lunch and dinner, as well as dine-in, carry-out, drive-thru and delivery services. In certain ways, we also compete with companies outside of the traditional restaurant industry, such as grocery store chains, meal subscription services and delicatessens - especially those that target guests who seek high-quality food - as well as convenience food stores, cafeterias and other dining outlets.
As new competitors enter the burger and fast casual segment and offer new digital experiences as well as companies that offer subscription based meal options, our competition continues to intensify. We also face increasing pressures from certain competitors who have announced initiatives to offer better quality ingredients relative to their previous offerings, such as antibiotic-free meat or plant-based meat alternatives. For more information regarding the risks we face from our competitors, see "Risks Related to Operating in the Restaurant Industry - We face significant competition for guests, and if we are unable to compete effectively, our business could be adversely affected" in Item 1A, Risk Factors.
We see ourselves as well-positioned to continue our market growth, as we believe consumers will keep seeking higher quality offerings, especially given an increasing consumer focus on responsible sourcing, ingredients and preparation. Additionally, we place a focus on culinary innovation to ensure our menu offerings stand out from those of our competitors. We believe that many consumers want to associate with brands whose ethos matches their own, and that Shake Shack, with our purpose to Stand For Something Good, reflects the values of conscientious consumers.
INTELLECTUAL PROPERTY
Since our inception, we have strategically and proactively developed our intellectual property portfolio by registering our trademarks and service marks worldwide. As of December 31, 2025, we had 29 registered marks domestically, including registrations of our core marks ("Shake Shack," "Shack Burger," "
as Stand for Something Good. Internationally, we have registered our core marks in 85 countries spanning six continents. These
marks are registered in multiple international trademark classes, including for restaurant services, food services, non-alcoholic beverages and apparel. We also own the domain https://www.shakeshack.com, as well as over 420 other domain names for use in other markets.
In addition, we have agreements with the suppliers of our proprietary products stating that the recipes, formulas and in certain instances the production processes associated with those products are our property, confidential to us, and may not be provided to any other customer. Our proprietary products include the burger recipe for our specific blend, our patty grinding specifications and the product formulations. We've developed several product formulations including our ShackSauce, 'Shroom Burger, chicken breast, chicken bites, chicken breading, buttermilk herb mayo, cheese sauce, unflavored custard base, vanilla custard base,
chocolate custard base, as well as certain toppings and custard mix-ins. We also have exclusive arrangements with our suppliers of crinkle cut fries, ShackMeister Ale, Shack Red wine, Shack White wine, Shack Rosé wine, hot dogs and cherry peppers.
GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
We are subject to extensive federal, state, local and foreign laws and regulations, as well as other statutory and regulatory requirements, including those related to, among others, nutritional content labeling and disclosure requirements, food safety regulations, local licensure, building and zoning regulations, employment regulations and laws and regulations related to our licensed operations. New laws and regulations or new interpretations of existing laws and regulations may also impact our business. The costs of compliance with these laws and regulations are high, are likely to increase in the future, and any failure on our part to comply with these laws may subject us to significant liabilities and other penalties. See "Regulatory and Legal Risks" in Item 1A, Risk Factors for more information.
We are not aware of any federal, state or local provisions that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, that have materially affected, or are reasonably expected to materially affect, our results of operations, competitive position, or capital expenditures.
SEASONALITY
Our business is subject to seasonal fluctuations which can impact sales from quarter-to-quarter. We typically see higher sales in the summer months, followed by a slower fall season during the back-to-school months and an increase around the holiday season. However, given our use of a fiscal calendar, there may be some fluctuations between quarters due to holiday shifts in the calendar year. Year-over-year and quarter-to-quarter results can also be impacted by the number and timing of new Shack openings.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The name, age and position held by each of our named executive officers as of December 31, 2025 is set forth below.
Name
Age
Position
Robert Lynch
49
Chief Executive Officer and Director
Stephanie Sentell
47
Chief Operations Officer
Robert Lynch has served as Shake Shack's Chief Executive Officer and as a member of the Board of Directors since May 2024. Prior to joining Shake Shack, Mr. Lynch served as President and Chief Executive Officer of Papa John's International, Inc., where he drove record global system-wide sales of over $5 billion across approximately 5,900 units. Previously, Mr. Lynch was President of Arby's Restaurant Group, one of the largest sandwich restaurant brands in the world, with more than 3,400 restaurants across eight countries, where he led operations, marketing, culinary, development, and digital transformation. Mr. Lynch previously served as Arby's Brand President and Chief Marketing Officer. Prior to joining Arby's, Mr. Lynch served as Vice President of Marketing at Taco Bell. Mr. Lynch has over 25 years combined experience in the QSR and consumer packaged goods industries and has also held senior roles at BJ Heinz Company and Procter & Gamble. Mr. Lynch is a graduate of the University of Rochester, where he obtained his B.A. and M.B.A.
Stephanie Sentell has served as Shake Shack's Chief Operations Officer since July 2024. Ms. Sentell brings a portfolio of experience with her from a 25-year restaurant industry career. Prior to joining Shake Shack, Ms. Sentell served as SVP of Company Operations at Inspire Brands. In this role she was responsible for a $1.5 billion dollar business across 1,100 company-owned restaurants with over 22,000 restaurant team members in the U.S. Previously, Ms. Sentell held the position of SVP Restaurant Operations & Innovation at Inspire Brands. Earlier, Ms. Sentell served as SVP Restaurant Excellence as well as SVP
Product Development and Menu Delivery at Arby's Restaurant Group. Ms. Sentell also spent over 11 years at Dairy Queen as the Director of Marketing and a franchisee owner. Ms. Sentell is a graduate of the University of Wisconsin at River Falls, where she obtained her A.S. in Marketing Communications.
AVAILABLE INFORMATION
Our website is located at www.shakeshack.com, and our investor relations website is located at https://investor.shakeshack.com. We are subject to the informational requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and file or furnish reports, proxy statements and other information with the U.S. Securities and Exchange Commission ("SEC"). Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, statements of changes in beneficial ownership and amendments to those reports are available for free on our investor relations website as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
We webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations website. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, and press and earnings releases as part of our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real time by subscribing to email alerts. We also make certain corporate governance documents available on our investor relations website, including our corporate governance guidelines, board committee charters, code of business conduct and ethics, as well as certain Company policies.
The contents of our website are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
Shake Shack Inc.
Item 1A. Risk Factors.
Described below are risks that we believe apply to our business and the industry in which we operate. You should carefully consider each of the following risk factors in conjunction with other information provided in this Annual Report on Form 10-K and in our other public disclosures. The risks described below highlight potential events, trends, or other circumstances that could adversely affect our business, reputation, financial condition, results of operations, cash flows, liquidity or access to sources of financing, and consequently, the market value of our Class A common stock. These risks could cause our future results to differ materially from historical results and from guidance we may provide regarding our expectations of future financial performance. The risks described below are not the only risks we may face and additional risks not currently known to us or that we presently deem immaterial may emerge or become material at any time.
Summary Risk Factors
Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition and results of operations. These risks are discussed more fully below and include, but are not limited to the following:
Risks Related to Our Growth Strategies and Operations
Our long-term success is dependent on the selection, design and execution of appropriate business strategies.
Our primary growth strategy is highly dependent on the availability of suitable locations and our ability to develop and open new Shacks on a timely basis and on terms attractive to us.
Our plans to open new Shacks, the ongoing need for capital expenditures at our existing Shacks and our ongoing digital enhancements require us to spend capital.
Our expansion into new domestic markets may present increased risks, which could affect our profitability.
Our failure to manage our growth effectively could harm our business and operating results.
New Shacks, once opened, may not be profitable, and may negatively affect Shack sales at our existing Shacks.
Our marketing strategies and channels will evolve and our programs may not be successful.
Our purpose to Stand For Something Good subjects us to risks.
We have a limited number of suppliers for our major products and rely on one national distribution company for the majority of our domestic distribution needs. If our suppliers or distributor are unable to fulfill their obligations under our arrangements with them, we could encounter supply shortages and incur higher costs.
We rely on a limited number of licensees for the operation of our licensed Shacks, and we have limited control with respect to the operations of our licensed Shacks, which could have a negative impact on our reputation and business.
If we fail to maintain our corporate culture, our relationships with our team members and guests could be negatively
affected.
Risks Related to Operating in the Restaurant Industry
Incidents involving food safety and food-borne illnesses could adversely affect guests' perception of our brand, result in lower sales and increase operating costs.
Rising labor costs and difficulties recruiting and retaining the right team members could adversely affect our business.
Increased food commodity and energy costs could decrease our Restaurant-level profit margins or cause us to limit or otherwise modify our menu, which could adversely affect our business.
The digital and delivery strategy, related expenses, execution and expansion thereof, is uncertain and subject to risk.
We face significant competition for guests, and if we are unable to compete effectively, our business could be adversely affected.
Pandemics or disease outbreaks, such as the COVID-19 pandemic, have disrupted, and may continue to disrupt our business, and have materially affected our business, results of operations and our financial condition.
Our international licensed Shacks import many of our proprietary and other core ingredients from the United States and other countries. If this international supply chain is interrupted, our international licensed operations could encounter supply shortages and incur higher costs.
We are subject to risks associated with leasing property subject to long-term leases.
The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results.
Restaurant companies have been the target of class action lawsuits and other proceedings that are costly, divert management attention and, if successful, could result in our payment of substantial damages or settlement costs.
Our business is subject to risks related to our sale of alcoholic beverages.
General Business and Economic Risks
Damage to our reputation could negatively impact our business, financial condition and results of operations.
Changes in economic conditions, both domestically and internationally, could materially affect our business, financial condition and results of operations.
Because many of our Company-operated Shacks are concentrated in local or regional areas, we are susceptible to economic and other trends and developments, including adverse weather conditions, in these areas.
Security breaches of either confidential guest information in connection with, among other things, our electronic processing of credit and debit card transactions; kiosk, app, or web ordering; or confidential team member information may adversely affect our business.
If we are unable to maintain and update our information technology systems to meet the needs of our business, our business could be adversely impacted.
If we experience a material failure or interruption in our systems, our business could be adversely impacted.
Because a component of our strategy is to continue to grow our licensed business internationally, the risks of doing business internationally could lower our revenues, increase our costs, reduce our profits or disrupt our business.
Our stock price could be extremely volatile, and, as a result, stockholders may not be able to resell shares at or above their purchase price.
We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brand and adversely affect our business.
We depend on key members of our executive management team.
Our insurance coverage and self-insurance reserves may not provide adequate levels of coverage against claims.
Regulatory and Legal Risks
We are subject to many federal, state, local and foreign laws and regulations, as well as other statutory and regulatory requirements, with which compliance is both costly and complex. Failure to comply with, or changes in these laws or requirements, could have an adverse impact on our business.
If we fail to develop and maintain effective internal controls over financial reporting, our ability to produce timely and accurate financial information or comply with Section 404 of the Sarbanes-Oxley Act of 2002 could be impaired, which could have a material adverse effect on our business and stock price.
Our ability to use our net operating loss carryforwards may be subject to limitation.
Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results of operations and financial condition.
Risks Related to Our Organizational Structure
Shake Shack has non-controlling interest holders, whose interests may differ from those of our public stockholders.
Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the non-controlling interest holders that will not benefit Class A common stockholders to the same extent as it will benefit the non-controlling interest holders.
We will continue to incur relatively outsized costs as a result of being a public company and in the administration of our complex organizational structure.
Our anti-takeover provisions could prevent or delay a change in control of our Company, even if such change in control would be beneficial to our stockholders.
We do not currently expect to pay any cash dividends.
Risks Related to Our Tax Receivable Agreement
We will continue to incur relatively outsized costs as a result of our complex organizational structure.
We are a holding company and our principal asset is our interest in SSE Holdings, and, accordingly, we will depend on distributions from SSE Holdings to pay our taxes and expenses, including payments under the Tax Receivable Agreement. SSE Holdings' ability to make such distributions may be subject to various limitations and restrictions.
In certain cases, payments under the Tax Receivable Agreement to the non-controlling interest holders may be accelerated or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreement.
We will not be reimbursed for any payments made to the non-controlling interest holders under the Tax Receivable Agreement in the event that any tax benefits are disallowed.
Risks Related to Our Convertible Notes
Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.
The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.
Conversion of the Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our Class A common stock.
Certain provisions in the indenture governing the Notes may delay or prevent an otherwise beneficial takeover attempt of us.
RISKS RELATED TO OUR GROWTH STRATEGIES AND OPERATIONS
Our long-term success is dependent on the selection, design and execution of appropriate business strategies.
We operate in a highly competitive and ever-changing environment. Our long-term success is dependent on our ability to identify, develop and execute appropriate business strategies within this environment. Our current strategies include:
Global unit expansion and the refinement of future Shacks to increase our total addressable market and to build an efficient and more standardized operation. This will include developing new prototypes and standards throughout our future Shack classes, as well as our continued focus on increasing our licensed Shack presence, both domestically and abroad.
Grow same-Shack sales, which represents the change in year-over-year revenues for Company-operated Shacks open for 24 full months or longer.
Enhancing our guest experience and optimizing our Shack operations to increase guest frequency and drive greater sales and profitability.
Menu innovation, with a focus on LTOs to increase guest frequency.
We may experience challenges in achieving the goals we have set and we may be unsuccessful in executing our strategies once identified and we will be required to make significant capital expenditures to pursue these goals. Conversely, we may also execute on poorly designed strategies that prove to be ineffective or require us to make substantial changes to our strategies in order to produce the desired results. Our strategies may expose us to additional risks and strategies that have been successful for us in the past may fail to be so in the future or may be more expensive than we currently anticipate. We may incur significant costs and damage our brand if we are unable to identify, develop, and execute appropriate business strategies, which could have a material adverse effect on our business, financial condition and results of operations.
Our primary growth strategy is highly dependent on the availability of suitable locations and our ability to develop and open new Shacks on a timely basis and on terms attractive to us.
One of the key means of achieving our growth strategies will be through opening and operating new Shacks on a profitable basis for the foreseeable future. We must identify target markets where we can enter or expand, taking into account numerous factors such as the location of our current Shacks, the format of our current Shacks, the target consumer base, population density, demographics, traffic patterns, competition, geography and information gathered from various sources. We may not be able to open our planned new Shacks within budget or on a timely basis, if at all, given the uncertainty of these factors, which could adversely affect our business, financial condition and results of operations. As we operate more Shacks, our rate of expansion relative to the size of our Shack base will decline.
The number and timing of new Shacks opened during any given period may be negatively impacted by a number of factors including:
identification and availability of attractive sites for new Shacks;
difficulty negotiating suitable lease terms;
shortages of construction labor, materials, or restaurant equipment;
recruitment and training of qualified personnel in the local market;
our ability to obtain all required governmental permits in a timely manner, including zoning approvals;
our ability to control construction and development costs of new Shacks, particularly in inflationary environments and including the impacts of tariffs or the responses of other governments, consumers or suppliers to U.S. imposed tariffs;
competition in new markets, including competition for appropriate sites;
failure of the landlords to timely deliver real estate to us and other landlord delays;
proximity of potential sites to an existing Shack, and the impact of cannibalization on future growth;
anticipated commercial, residential and infrastructure development near our new Shacks; and
cost and availability of capital to fund construction costs and pre-opening costs.
Accordingly, we cannot assure you that we will be able to successfully expand as we may not correctly analyze the suitability of a location or anticipate all of the challenges imposed by expanding our operations. We have closed underperforming Company-operated Shacks, and, if we identify other underperforming Shacks in the future, we may choose to close them, as a result. Our growth strategy, and the substantial investment associated with the development of each new Company-operated Shack, may cause our operating results to fluctuate and be unpredictable or adversely affect our profits. In addition, we may find that our concept has limited appeal in new markets or we may experience a decline in the popularity of our concept in the markets in which we operate. If we are unable to expand in existing markets or penetrate new markets, our ability to increase our revenues and profitability may be materially harmed or we may face losses.
Our plans to open new Shacks, the ongoing need for capital expenditures at our existing Shacks and our ongoing digital enhancements require us to spend capital.
Our growth strategy depends on opening new Shacks in various formats and continuing our digital evolution, which will require us to use cash flows from operations. Our drive-thru formats are larger than our traditional Shacks, which can result in higher real estate costs and require additional infrastructure and construction costs. We cannot assure that cash flows from operations will be sufficient to allow us to implement our growth strategy. If these funds are not allocated efficiently among our various projects, or if any of these initiatives prove to be unsuccessful, we may experience reduced profitability and we could be required to delay a project or delay, significantly curtail, or eliminate planned Shack openings, which could have a material adverse effect on our business, financial condition and results of operations.
In addition, as our Shacks and digital infrastructure mature, our business will require maintenance, investment, renovation and improvement expenditures to remain competitive and maintain the value of our brand standard. This creates an ongoing need for cash, and, to the extent we cannot fund capital expenditures from cash flows from operations, funds will need to be borrowed or otherwise obtained.
If the costs of funding new Shacks or renovations or enhancements to existing Shacks exceed budgeted amounts, and/or the time for building or renovation is longer than anticipated, our profits could be reduced. If we cannot access the capital we need, we may not be able to execute our growth strategy, take advantage of future opportunities or respond to competitive pressures.
Our expansion into new domestic markets may present increased risks, which could affect our profitability.
We plan to open Company-operated Shacks in markets where we have little or no operating experience. Shacks we open in new markets may take longer to reach expected Shack sales and profit levels on a consistent basis, may be less profitable on average than our current base of Shacks, and may have higher construction, occupancy or operating costs than Shacks we open in existing markets. New markets may have competitive conditions, consumer tastes and discretionary spending patterns that are more difficult to predict or satisfy than our existing markets. We may need to make greater investments than we originally planned in advertising and promotional activity in new markets to build brand awareness. We may find it more difficult in new markets to hire, motivate and retain qualified team members who share our values. We may also incur higher costs from entering new markets if, for example, we assign area directors to manage comparatively fewer Shacks than we assign in more developed markets. Also, until we attain a critical mass in a market, the Shacks we do open may incur higher food distribution costs and reduced operating leverage. As a result, these new Shacks may be less successful or may achieve target Restaurant-level profit margins at a slower rate, if ever. If we identify these Shacks as underperforming, we may choose to close them, as a result. If we do not successfully execute our plans to enter new markets, our business, financial condition or results of operations could be adversely affected.
Our failure to manage our growth effectively could harm our business and operating results.
Our growth plan includes opening a large number of new Shacks. Our existing personnel, management systems, financial and management controls and information systems may not be adequate to support our planned expansion. Our ability to manage
our growth effectively will require us to continue to enhance these systems, procedures and controls, and to locate, hire, train and retain management and operating personnel, particularly in new markets. We may not be able to respond on a timely basis to all of the changing demands that our planned expansion will impose on management and on our existing infrastructure, or be able to hire or retain the necessary management and operating personnel, which could harm our business, financial condition or results of operations. These demands could cause us to operate our existing business less effectively, which in turn could cause a deterioration in the financial performance of our existing Shacks. If we experience a decline in financial performance, we may decrease the number of or discontinue Shack openings, or we may decide to close Shacks that we are unable to operate in a profitable manner.
New Shacks, once opened, may not be profitable, and may negatively affect Shack sales at our existing Shacks.
Our results have been, and in the future may continue to be, significantly impacted by the timing of new Shack openings (often dictated by factors outside of our control), including landlord, construction and permitting delays, associated Shack pre-opening costs and operating inefficiencies, as well as changes in our geographic concentration. We typically incur the most significant portion of pre-opening costs associated with a given Shack within the several months preceding the opening of the Shack. Our experience has been that labor and operating costs associated with a newly opened Shack for the first several months of operation are materially greater than what can be expected after that time, both in aggregate dollars and as a percentage of Shack sales. Our new Shacks take a period of time to reach target operating levels due to inefficiencies typically associated with new Shacks, including the training of new personnel, new market learning curves, inability to hire sufficient qualified staff and other factors. We may incur additional costs in new markets, particularly for transportation and distribution, which may impact the profitability of those Shacks. Although we have specific target operating and financial metrics, new Shacks may not meet these targets or may take longer than anticipated to do so. If we identify these new Shacks as underperforming, we may choose to close them, as a result. Any new Shacks we open may not be profitable or achieve operating results similar to those of our existing Shacks, which could adversely affect our business, financial condition and results of operations.
The opening of a new Shack in or near markets in which we already have Shacks could adversely affect the Shack sales of those existing Shacks. Existing Shacks could also make it more difficult to build our consumer base for a new Shack in the same market. We will continue to cluster in select markets and open new Shacks in and around areas of existing Shacks that are operating at or near capacity to leverage operational efficiencies and effectively serve our guests. Cannibalization of Shack sales among our Shacks may become significant in the future as we continue to expand our operations and could adversely affect our Shack sales growth, which could, in turn, adversely affect our business, financial condition and results of operations.
Our marketing strategies and channels will evolve and our programs may not be successful.
Shake Shack is a growing brand, and we incur costs and expend other resources in our marketing efforts to attract and retain guests. Our strategy has historically included public relations, digital and social media, promotions, commercials on streaming platforms, and in-store messaging, which typically require less marketing spend as compared to traditional marketing programs. As we continue to execute on our growth strategy, we expect to increase our investment in advertising and promotional activities, and may change our marketing model, including targeted marketing offers to unique guest segments and incentivizing and rewarding loyal guests.
Some of our marketing initiatives may not be successful, resulting in expenses incurred without the benefit of higher revenues. Additionally, some of our competitors have greater financial resources, which enable them to spend significantly more on marketing and advertising than we are able to at this time. Should our competitors increase spending on marketing and advertising or our marketing funds decrease for any reason, or should our advertising and promotions be less effective than those of our competitors, there could be a material adverse effect on our business, financial condition and results of operations.
Our purpose to Stand For Something Good subjects us to risks.
We pride ourselves on sourcing premium ingredients from like-minded producers - 100% all-natural proteins with no added hormones that are humanely raised and source verified. We are dedicated to using sustainable materials and equipment whenever possible, and distinctive furniture and fixtures that advance our sustainability initiatives, as well as being committed to achieving ethical and humane practices for the animals in our supply chain. We also strive to be the best employer and a good citizen in each community we call home.
We do, however, face many challenges in carrying out our purpose to Stand For Something Good. We incur higher costs and other risks associated with purchasing high quality ingredients grown or raised with an emphasis on quality and responsible practices and paying highly competitive compensation to our team members. As a result, our food and labor costs may be significantly higher than other companies who do not source high quality ingredients or pay above minimum wage. Additionally, the supply for high quality ingredients may be limited and it may take us longer to identify and secure relationships with suppliers that are able to meet our quality standards and have sufficient quantities to support our growing business. If we are unable to obtain a sufficient and consistent supply for our ingredients on a cost-effective basis, our food costs could increase or we may experience supply interruptions which could have an adverse effect on our operating margins. Additionally, some of our competitors have announced initiatives to offer better quality ingredients. If this trend continues, it could further limit our supply for certain ingredients and we may lose our competitive advantage as it will be more difficult to differentiate ourselves.
Because we hold ourselves to such high standards, and because we believe our guests have come to have high expectations of us, we may be more severely affected by negative reports or publicity if we fail, or are believed to have failed, to comply with our own standards. The damage to our reputation may be greater than other companies that do not have similar values as us, and it may take us longer to recover from such an incident and gain back the trust of our guests. Our purpose to Stand For Something Good also exposes us to criticism from special interest groups who have different opinions regarding certain food issues or who believe we should pursue different strategies and goals. Any adverse publicity that results from such criticism could damage our brand and adversely affect guest traffic.
We believe that our Stand For Something Good purpose has been a major contributing factor in our past success because we believe consumers are increasingly focused on where their food comes from and how it is made, and that consumers want to associate themselves with brands whose ethos matches that of their own. However, if these trends change we may no longer be able to successfully compete with other restaurants who share different values than us.
We have a limited number of suppliers for our major products and rely on one national distribution company for the majority of our domestic distribution needs. If our suppliers or distributor are unable to fulfill their obligations under our arrangements with them, we could encounter supply shortages and incur higher costs.
We have a limited number of suppliers for our major ingredients, including beef patties, chicken, potato buns, custard, portobello mushrooms and cheese sauce. During fiscal 2025, we purchased our (i) ground beef patties from 11 approved ground beef processors, with approximately 38% of our ground beef patties from one supplier; (ii) chicken breasts from two suppliers;
(iii) potato buns from two suppliers; (iv) custard base from three suppliers; (v) 'Shroom Burgers from one supplier; (vi) crinkle cut fries from three suppliers; and (vii) ShackSauce from one supplier. Due to this concentration of suppliers and our food quality expectations, the cancellation of our supply arrangements with any one of these suppliers or the disruption, delay or inability of these suppliers to deliver these major products to our Shacks may materially and adversely affect our results of operations while we establish alternate distribution channels. In addition, if our suppliers fail to comply with food safety or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted. We cannot assure you that we would be able to find replacement suppliers on commercially reasonable terms or a timely basis, if at all.
If there is a supply issue with all U.S. raw beef, we have 23 approved raw beef suppliers and 14 approved beef processors in other countries. The risks to using international suppliers are shipping lead time, shipping costs, potential import duties, and U.S. customs delays. Should there become a need to utilize international suppliers, it is unknown at this time how long it would take and at what cost imports would be, but the delay and cost would likely be adverse to our business.
Our burgers depend on the availability of our proprietary ground beef blend. Availability of our blend depends on two different components: raw material supplied by the slaughterhouses and ground and formed beef patties supplied by regional processors who further process and convert whole muscle purchased from the slaughterhouses. The primary risk we face is with our regional processors. If there is an interruption of operation at any one of our regional processor's facilities, we face an immediate risk because each Shack typically has less than three days of beef patty inventory on hand. However, we have agreements with our regional processors to provide an alternate back-up supply in the event of a disruption of operations at one of our beef processors through our broadline distributor's network, but there would be a delay in availability due to production and shipping.
We contract with one distributor, which we refer to as our "broadline" distributor, to provide virtually all of our food distribution services in the United States. As of December 31, 2025, approximately 95% of certain food and beverage ingredients, including
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Shake Shack Inc. published this content on April 29, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 29, 2026 at 23:31 UTC.