Shake Shack quarterly revenue rises to $423M
Shake Shack had 738 Shacks systemwide at September 30, 2026, including 427 company-operated locations and 311 licensed locations.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Shake Shack Inc. (SHAK) reported revenue of $423.3 million for the thirteen weeks ended September 30, 2026, compared with $367.4 million for the thirteen weeks ended September 24, 2025. Shack sales were $408.0 million and licensing revenue was $15.2 million. Net income attributable to Shake Shack Inc. was $16.5 million, compared with $12.5 million; diluted earnings per share were $0.39 versus $0.30. Adjusted EBITDA was $62.8 million, compared with $54.1 million.
For the thirty-nine weeks ended September 30, 2026, revenue was $1.208 billion versus $1.045 billion for the thirty-nine weeks ended September 24, 2025, while net income attributable to Shake Shack Inc. was $31.9 million versus $33.9 million. Operating cash flow was $136.0 million, compared with $159.2 million, and capital expenditures were $162.4 million versus $106.7 million. Cash and cash equivalents were $319.0 million at quarter-end. Shake Shack said it believes its existing cash and cash from operations will be sufficient to fund operating and finance lease obligations, capital expenditures, Tax Receivable Agreement obligations and working capital for at least the next 12 months. It had no borrowings under its revolving credit facility and was in compliance with all covenants as of September 30, 2026.
2 points · 0 major0 major · 2 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly revenue reached $423.3 million, versus $367.4 million.
- Moderate pointQuarterly net income attributable rose to $16.5 million from $12.5 million.
Negative
- Moderate pointNine-month operating cash flow fell to $136.0 million from $159.2 million.
- Minor pointShake Shack's nine-month net income attributable fell to $31.9 million from $33.9 million.
Filing Explained
Through September 30, 2026, 49,000 LLC interests had been redeemed for Class A shares, while 2,385,789 remained eligible for one-for-one exchange.
This unaudited quarterly report says that, as of
Shake Shack also reports
During the 39 weeks ended
The company reports
Key Figures
Revenue: $423.3 million
Net income attributable to Shake Shack Inc.: $16.5 million
Adjusted EBITDA: $62.8 million
+4 more
7 metrics
Revenue
$423.3 million
Thirteen weeks ended September 30, 2026; $367.4 million for the thirteen weeks ended September 24, 2025
Net income attributable to Shake Shack Inc.
$16.5 million
Thirteen weeks ended September 30, 2026; $12.5 million for the thirteen weeks ended September 24, 2025
Adjusted EBITDA
$62.8 million
Thirteen weeks ended September 30, 2026; $54.1 million for the thirteen weeks ended September 24, 2025
Net income attributable to Shake Shack Inc.
$31.9 million
Thirty-nine weeks ended September 30, 2026; $33.9 million for the thirty-nine weeks ended September 24, 2025
Net cash provided by operating activities
$136.0 million
Thirty-nine weeks ended September 30, 2026; $159.2 million for the thirty-nine weeks ended September 24, 2025
Cash and cash equivalents
$319.0 million
As of September 30, 2026
Shacks in operation systemwide
738 Shacks
As of September 30, 2026
Key Terms
Adjusted EBITDA, Restaurant-level profit, Tax Receivable Agreement, non-controlling interest
4 terms
Adjusted EBITDA financial
"Adjusted EBITDA is defined as EBITDA excluding equity-based compensation expense"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Restaurant-level profit financial
"Restaurant-level profit is defined as Shack sales less Shack-level operating expenses"
Restaurant-level profit is the money a single location generates after paying the costs of running that restaurant—food and drink supplies, staff wages, rent, utilities and other day-to-day expenses—but before corporate overhead, interest, taxes or central investments. Investors use it like a per-store checkup: it shows whether each location’s basic business model is healthy and repeatable, helping judge unit economics, break-even points and how well growth will translate into company-wide profits.
Tax Receivable Agreement financial
"obligated to make payments to certain members of SSE Holdings under the Tax Receivable Agreement"
A contract in which a company agrees to pay a specified party (often former owners after a spinoff or IPO) a share of future tax savings the company realizes. Think of it like agreeing to share a future tax refund with someone who helped create the conditions for that refund. For investors it matters because those payments reduce the cash the company can use for dividends, buybacks, or reinvestment, and therefore affect valuation and returns.
non-controlling interest financial
"representing the economic interest held by the other members of SSE Holdings"
Non-controlling interest represents the portion of ownership in a company held by investors who do not have a controlling stake, meaning they do not have enough voting power to make major decisions. It is similar to owning a minority share of a business partner’s company—while they benefit from profits, they cannot control how the company is run. This matters to investors because it shows how much of the company's value is owned by outside shareholders and affects overall financial reporting.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How many locations did SHAK have in September 2026?
Shake Shack had 738 Shacks systemwide as of September 30, 2026: 427 were company-operated and 311 were licensed.
How much can SHAK borrow under its revolving credit facility?
The facility permits borrowings of up to $50 million, with available borrowings that may increase by up to an additional $100 million, subject to certain conditions. It also permits letters of credit of up to $15 million upon company request.
When do Shake Shack's 0% convertible notes mature?
Shake Shack's $250 million aggregate principal amount of 0% Convertible Senior Notes mature on March 1, 2028, unless earlier converted, redeemed or repurchased in certain circumstances.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Mark One) | |||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
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
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | ||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(646 ) 747-7200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule-405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☑ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☑ No
As of October 28, 2026, there were 40,421,151 shares of Class A common stock outstanding and 2,380,789 shares of Class B common stock outstanding.
SHAKE SHACK INC.
TABLE OF CONTENTS
Cautionary Note Regarding Forward-Looking Information | 1 | ||||||||||
Part I — Financial Information | 2 | ||||||||||
Item 1. | Financial Statements (Unaudited) | 2 | |||||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 25 | |||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 41 | |||||||||
Item 4. | Controls and Procedures | 41 | |||||||||
Part II — Other Information | 43 | ||||||||||
Item 1. | Legal Proceedings | 43 | |||||||||
Item 1A. | Risk Factors | 43 | |||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 43 | |||||||||
Item 3. | Defaults Upon Senior Securities | 43 | |||||||||
Item 5. | Other Information | 43 | |||||||||
Item 6. | Exhibits | 44 | |||||||||
SIGNATURES | 45 | ||||||||||
Table of Contents
Cautionary Note Regarding Forward-Looking Information
This Quarterly Report on Form 10-Q ("Form 10-Q") contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical fact included in this Form 10-Q are forward-looking statements, including, but not limited to, statements about 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," "target," "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-Q. 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, interest rates, the impact of tariffs, volatility in the financial markets and broader macroeconomic conditions, the impact of Shack closures, the impact of ongoing conflicts and related developments in the Middle East, our management of digital capabilities and expansion into delivery, as well as kiosk, drive-thru and multiple format investments, risks associated with cyberattacks, data security and technology disruptions, the impact of adverse weather conditions, changes in consumer spending patterns, volatility in tourism and consumer travel, our ability to maintain and grow sales at existing Shacks, the performance and profitability of newly opened Shacks and licensed Shacks, risks associated with our international licensing operations, and risks relating to the restaurant industry generally. You should evaluate all forward-looking statements made in this Form 10-Q in the context of the risks and uncertainties disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the U.S. Securities and Exchange Commission ("SEC"), our subsequent Quarterly Reports on Form 10-Q, and our other filings with the SEC.
The forward-looking statements included in this Form 10-Q 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.
Shake Shack Inc. 
Form 10-Q | 1
Form 10-Q | 1Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
| Page | |||||
Condensed Consolidated Balance Sheets | 3 | ||||
Condensed Consolidated Statements of Income | 4 | ||||
Condensed Consolidated Statements of Comprehensive Income | 5 | ||||
Condensed Consolidated Statements of Stockholders' Equity | 6 | ||||
Condensed Consolidated Statements of Cash Flows | 8 | ||||
Notes to Condensed Consolidated Financial Statements | 9 | ||||
2 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
SHAKE SHACK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share amounts)
| September 30 2026 | December 31 2025 | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash and cash equivalents | $ | $ | |||||||||||||||
| Accounts receivable, net | |||||||||||||||||
| Inventories | |||||||||||||||||
| Prepaid expenses and other current assets | |||||||||||||||||
| Total current assets | |||||||||||||||||
Property and equipment, net of accumulated depreciation of $ | |||||||||||||||||
| Operating lease assets | |||||||||||||||||
| Deferred income taxes, net | |||||||||||||||||
| Other assets | |||||||||||||||||
| TOTAL ASSETS | $ | $ | |||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Accounts payable | $ | $ | |||||||||||||||
| Accrued expenses | |||||||||||||||||
| Accrued wages and related liabilities | |||||||||||||||||
| Operating lease liabilities, current | |||||||||||||||||
| Other current liabilities | |||||||||||||||||
| Total current liabilities | |||||||||||||||||
| Long-term debt | |||||||||||||||||
| Long-term operating lease liabilities | |||||||||||||||||
| Liabilities under tax receivable agreement, net of current portion | |||||||||||||||||
| Other long-term liabilities | |||||||||||||||||
| Total liabilities | |||||||||||||||||
Commitments and contingencies (Note 13) | |||||||||||||||||
| Stockholders' equity: | |||||||||||||||||
| Preferred stock, no par value—10,000,000 shares authorized; none issued and outstanding as of September 30, 2026 and December 31, 2025. | |||||||||||||||||
| Class A common stock, $0.001 par value—200,000,000 shares authorized; 40,415,423 and 40,254,281 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively. | |||||||||||||||||
| Class B common stock, $0.001 par value—35,000,000 shares authorized; 2,385,789 and 2,434,789 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively. | |||||||||||||||||
| Additional paid-in capital | |||||||||||||||||
| Retained earnings | |||||||||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||||||||
| Total stockholders' equity attributable to Shake Shack Inc. | |||||||||||||||||
| Non-controlling interests | |||||||||||||||||
| Total equity | |||||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | |||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
Shake Shack Inc. Form 10-Q | 3
Form 10-Q | 3Table of Contents
SHAKE SHACK INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share amounts)
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||||||||
| Shack sales | $ | $ | $ | $ | |||||||||||||||||||||||||
| Licensing revenue | |||||||||||||||||||||||||||||
| TOTAL REVENUE | |||||||||||||||||||||||||||||
| Shack-level operating expenses: | |||||||||||||||||||||||||||||
| Food and paper costs | |||||||||||||||||||||||||||||
| Labor and related expenses | |||||||||||||||||||||||||||||
| Other operating expenses | |||||||||||||||||||||||||||||
| Occupancy and related expenses | |||||||||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||||||||
| Depreciation and amortization expense | |||||||||||||||||||||||||||||
| Pre-opening costs | |||||||||||||||||||||||||||||
| Impairments, loss on disposal of assets, and Shack closures | |||||||||||||||||||||||||||||
| TOTAL EXPENSES | |||||||||||||||||||||||||||||
| INCOME FROM OPERATIONS | |||||||||||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||||||||
| INCOME BEFORE INCOME TAXES | |||||||||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||||||||
| NET INCOME | |||||||||||||||||||||||||||||
| Less: Net income attributable to non-controlling interests | |||||||||||||||||||||||||||||
| NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC. | $ | $ | $ | $ | |||||||||||||||||||||||||
| Earnings per share of Class A common stock: | |||||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||||||||
| Weighted-average shares of Class A common stock outstanding: | |||||||||||||||||||||||||||||
| Basic | |||||||||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
4 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
SHAKE SHACK INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands)
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||||||||
Other comprehensive income (loss), net of tax(1): | |||||||||||||||||||||||||||||
| Change in foreign currency translation adjustment | ( | ||||||||||||||||||||||||||||
| OTHER COMPREHENSIVE INCOME (LOSS) | ( | ||||||||||||||||||||||||||||
| COMPREHENSIVE INCOME | |||||||||||||||||||||||||||||
| Less: Comprehensive income attributable to non-controlling interests | |||||||||||||||||||||||||||||
| COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAKE SHACK INC. | $ | $ | $ | $ | |||||||||||||||||||||||||
(1)Net of tax expense of $0
See accompanying Notes to Condensed Consolidated Financial Statements.
Shake Shack Inc. Form 10-Q | 5
Form 10-Q | 5Table of Contents
SHAKE SHACK INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(in thousands, except share amounts)
For the Thirteen Weeks Ended September 30, 2026 and September 24, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non- Controlling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, JULY 1, 2026 | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in foreign currency translation adjustment | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Activity under stock compensation plans | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of LLC Interests | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to non-controlling interest holders | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, SEPTEMBER 30, 2026 | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, JUNE 25, 2025 | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in foreign currency translation adjustment | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Activity under stock compensation plans | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of LLC Interests | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to non-controlling interest holders | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, SEPTEMBER 24, 2025 | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
6 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
For the Thirty-Nine Weeks Ended September 30, 2026 and September 24, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non- Controlling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, DECEMBER 31, 2025 | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in foreign currency translation adjustment | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Activity under stock compensation plans | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of LLC Interests | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to non-controlling interest holders | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, SEPTEMBER 30, 2026 | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, DECEMBER 25, 2024 | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in foreign currency translation adjustment | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Activity under stock compensation plans | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of LLC Interests | — | ( | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to non-controlling interest holders | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, SEPTEMBER 24, 2025 | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
Shake Shack Inc. Form 10-Q | 7
Form 10-Q | 7Table of Contents
SHAKE SHACK INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
| Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| OPERATING ACTIVITIES | ||||||||||||||||||||||||||
| Net income (including amounts attributable to non-controlling interests) | $ | $ | ||||||||||||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||||||||
| Depreciation and amortization expense | ||||||||||||||||||||||||||
| Amortization of debt issuance costs | ||||||||||||||||||||||||||
Amortization of cloud computing assets | ||||||||||||||||||||||||||
| Non-cash operating lease cost | ||||||||||||||||||||||||||
| Equity-based compensation | ||||||||||||||||||||||||||
| Deferred income taxes | ||||||||||||||||||||||||||
Non-cash interest | ||||||||||||||||||||||||||
Impairments, loss on disposal of assets, and Shack closures | ||||||||||||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||||||||
| Accounts receivable | ( | |||||||||||||||||||||||||
| Inventories | ( | ( | ||||||||||||||||||||||||
| Prepaid expenses and other current assets | ( | ( | ||||||||||||||||||||||||
| Other assets | ( | ( | ||||||||||||||||||||||||
| Accounts payable | ( | |||||||||||||||||||||||||
| Accrued expenses | ( | |||||||||||||||||||||||||
| Accrued wages and related liabilities | ( | |||||||||||||||||||||||||
| Other current liabilities | ( | ( | ||||||||||||||||||||||||
| Operating lease liabilities | ( | ( | ||||||||||||||||||||||||
| Other long-term liabilities | ||||||||||||||||||||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||||||||||||||||
| INVESTING ACTIVITIES | ||||||||||||||||||||||||||
| Purchases of property and equipment | ( | ( | ||||||||||||||||||||||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ( | ||||||||||||||||||||||||
| FINANCING ACTIVITIES | ||||||||||||||||||||||||||
| Payments on principal of finance leases | ( | ( | ||||||||||||||||||||||||
| Deferred financing costs | ( | |||||||||||||||||||||||||
| Distributions paid to non-controlling interest holders | ( | ( | ||||||||||||||||||||||||
Payments under tax receivable agreement, including interest | ( | ( | ||||||||||||||||||||||||
Net proceeds from stock option exercises | ||||||||||||||||||||||||||
| Employee withholding taxes related to net settled equity awards | ( | ( | ||||||||||||||||||||||||
| NET CASH USED IN FINANCING ACTIVITIES | ( | ( | ||||||||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | |||||||||||||||||||||||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | |||||||||||||||||||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | ||||||||||||||||||||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | $ | ||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
8 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
SHAKE SHACK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
| Page | ||||||||
Note 1 | Nature of Operations | 10 | ||||||
Note 2 | Summary of Significant Accounting Policies | 10 | ||||||
Note 3 | Revenue | 11 | ||||||
Note 4 | Fair Value Measurements | 12 | ||||||
Note 5 | Supplemental Balance Sheet Information | 12 | ||||||
Note 6 | Debt | 12 | ||||||
Note 7 | Leases | 14 | ||||||
Note 8 | Non-Controlling Interests | 16 | ||||||
Note 9 | Equity-Based Compensation | 17 | ||||||
Note 10 | Income Taxes | 18 | ||||||
Note 11 | Earnings Per Share | 20 | ||||||
Note 12 | Supplemental Cash Flow Information | 22 | ||||||
Note 13 | Commitments and Contingencies | 22 | ||||||
Note 14 | Related Party Transactions | 23 | ||||||
Note 15 | Segment Reporting | 24 | ||||||
Shake Shack Inc. Form 10-Q | 9
Form 10-Q | 9Table of Contents
NOTE 1: NATURE OF OPERATIONS
Shake Shack Inc. was formed on September 23, 2014 as a Delaware corporation for the purpose of facilitating an initial public offering and other related transactions in order to carry on the business of SSE Holdings, LLC and its subsidiaries ("SSE Holdings"). Shake Shack Inc. is the sole managing member of SSE Holdings and, as sole managing member, the Company operates and controls all of the business and affairs of SSE Holdings. As a result, the Company consolidates the financial results of SSE Holdings and reports a non-controlling interest representing the economic interest in SSE Holdings held by the other members of SSE Holdings. As of September 30, 2026 the Company owned 94.4 % of SSE Holdings. Unless the context otherwise requires, "we," "us," "our," "Shake Shack," the "Company" and other similar references, refer to Shake Shack Inc. and, unless otherwise stated, all of its subsidiaries, including SSE Holdings.
The Company operates and licenses Shake Shack restaurants ("Shacks"), which serve burgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, and more. As of September 30, 2026, there were 738 Shacks in operation system wide, of which 427 were Company-operated Shacks and 311 were licensed Shacks.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Shake Shack Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and on a basis consistent in all material respects with the accounting policies described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 ("2025 Form 10-K"). Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These interim Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company's 2025 Form 10-K. In the Company's opinion, all adjustments, which are normal and recurring in nature, necessary for a fair presentation of the financial position and results of operation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full fiscal year.
SSE Holdings is considered a variable interest entity. Shake Shack Inc. is the primary beneficiary as the Company has the majority economic interest in SSE Holdings and, as the sole managing member, has decision making authority that significantly affects the economic performance of the entity, while the limited partners have no substantive kick-out or participating rights. As a result, the Company consolidates SSE Holdings. The assets and liabilities of SSE Holdings represent substantially all of the Company's consolidated assets and liabilities with the exception of certain deferred taxes and liabilities under the Tax Receivable Agreement. As of September 30, 2026 and December 31, 2025, the net assets of SSE Holdings were $555,256 and $500,732 , respectively. The assets of SSE Holdings are subject to certain restrictions in SSE Holdings' revolving credit agreement.
Fiscal Year
The Company operates on a 52/53 week fiscal year ending on the last Wednesday of December. Fiscal 2026 contains 52 weeks and ends on December 30, 2026. Fiscal 2025 contained 53 weeks and ended on December 31, 2025. Unless otherwise stated, references to years in this report relate to fiscal years.
Use of Estimates
The preparation of these Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.
10 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
Recently Issued Accounting Pronouncements
The Company reviewed all recently issued accounting pronouncements and concluded that they were not applicable or not expected to have a significant impact on its Condensed Consolidated Financial Statements.
NOTE 3: REVENUE
Revenue Recognition
Revenue disaggregated by type was as follows:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||
| Shack sales | $ | $ | $ | $ | |||||||||||||||||||
| Licensing revenue: | |||||||||||||||||||||||
| Sales-based royalties | |||||||||||||||||||||||
Initial territory, opening, and termination fees | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied as of September 30, 2026 was $25,673 . The Company expects to recognize this amount as revenue over a long-term period, as the majority of license terms for each Shack range from to twenty years . This amount excludes any variable consideration related to sales-based royalties.
Contract Balances
Contract liabilities and receivables from contracts with customers were as follows:
| September 30 2026 | December 31 2025 | |||||||||||||
| Shack sales receivables | $ | $ | ||||||||||||
| Licensing receivables, net of allowance for doubtful accounts | ||||||||||||||
| Gift card liability | ||||||||||||||
| Deferred revenue, current | ||||||||||||||
| Deferred revenue, long-term | ||||||||||||||
Revenue recognized that was included in the respective liability balances at the beginning of the period was as follows:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||
Gift card liability | $ | $ | $ | $ | |||||||||||||||||||
| Deferred revenue | |||||||||||||||||||||||
Shake Shack Inc. Form 10-Q | 11
Form 10-Q | 11Table of Contents
NOTE 4: FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The carrying values of the Company's Cash and cash equivalents, Accounts receivable, net, Accounts payable and Accrued expenses approximate fair value due to the short-term nature of these financial instruments. Refer to Note 6, Debt, for additional information relating to the fair value of the Company's outstanding debt instruments.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Assets and liabilities measured at fair value on a non-recurring basis include long-lived assets, operating lease right-of-use assets and indefinite-lived intangible assets. The Company performs its impairment analysis at least annually or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable.
There were no 8 and $170 , respectively, related to the nine Shack closures in fiscal 2024. Additionally, the Company recognized miscellaneous Shack closure expense of $(52 ) and $1,734 , respectively for the thirteen and thirty-nine weeks ended September 24, 2025, primarily related to the true-up of expenses for the nine Shack closures in fiscal 2024.
NOTE 5: SUPPLEMENTAL BALANCE SHEET INFORMATION
The components of Prepaid expenses and other current assets were as follows:
| September 30 2026 | December 31 2025 | ||||||||||
Prepaid expenses | $ | $ | |||||||||
Tenant allowance receivables | |||||||||||
Other | |||||||||||
Prepaid expenses and other current assets | $ | $ | |||||||||
The components of Other current liabilities were as follows:
| September 30 2026 | December 31 2025 | ||||||||||
| Sales tax payable | $ | $ | |||||||||
| Current portion of financing equipment lease liabilities | |||||||||||
| Gift card liability | |||||||||||
| Current portion of liabilities under tax receivable agreement | |||||||||||
| Other | |||||||||||
| Other current liabilities | $ | $ | |||||||||
NOTE 6: DEBT
Convertible Notes
The Company's $250,000 aggregate principal amount of 0 % Convertible Senior Notes due 2028 (“Convertible Notes”) will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in certain circumstances. Upon conversion, the
12 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
Company pays or delivers, as the case may be, cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at the Company's election.
The Convertible Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding December 1, 2027, only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on June 30, 2021 (and only during such fiscal quarter), if the last reported sale price of the Company's Class A common stock, par value $0.001 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price for the Convertible Notes on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per one thousand dollar principal amount of the Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of Class A common stock and the conversion rate for the Convertible Notes on each such trading day; (3) if the Company calls such Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the Convertible Notes called (or deemed called) for redemption; and (4) upon the occurrence of specified corporate events as set forth in the Indenture. On or after December 1, 2027, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Convertible Notes may convert all or any portion of their Convertible Notes at any time, regardless of the foregoing circumstances.
The Convertible Notes had an initial conversion rate of 5.8679 shares of Class A common stock per one thousand dollar principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $170.42 per share of Class A common stock. The fair value of the Convertible Notes was approximately $236,000 and $236,875 , respectively, as of September 30, 2026 and December 31, 2025, based on external pricing data, including available quoted market prices of these instruments, and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as a Level 2 measurement within the fair value hierarchy.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| Classification | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Amortization expense on Convertible Notes | Interest expense | $ | $ | $ | $ | ||||||||||||||||||||||||
| September 30 2026 | December 31 2025 | ||||||||||||||||
| Convertible Notes | $ | $ | |||||||||||||||
| Discount and debt issuance costs, net of amortization | ( | ( | |||||||||||||||
| Long-term debt | $ | $ | |||||||||||||||
Revolving Credit Facility
The Company maintains a revolving credit facility agreement ("Revolving Credit Facility") which permits borrowings up to $50,000 with the ability to increase available borrowings up to an additional $100,000 , subject to satisfaction of certain conditions.
In July 2025, the Company entered into the sixth amendment to the Revolving Credit Facility ("Sixth Amendment"), which, among other things, extends the maturity date until the earlier of (a) February 28, 2028, or (b) the date that is 91 days prior to the scheduled maturity date of any Convertible Notes outstanding at any time.
Outstanding borrowings under the Revolving Credit Facility bear interest at either: (i) the base rate plus applicable margin ranging from 0.0 % to 1.5 % or (ii) the Secured Overnight Financing Rate (“SOFR”) plus applicable margin ranging from 1.0 % to 2.5 %, in each case dependent upon the net lease adjusted leverage ratio. As of September 30, 2026 and December 31, 2025, no
The obligations under the Revolving Credit Facility are secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors. The obligations under the Revolving Credit Facility are guaranteed by each of SSE
Shake Shack Inc. Form 10-Q | 13
Form 10-Q | 13Table of Contents
Holdings' direct and indirect subsidiaries, with certain exceptions. The Revolving Credit Facility requires the Company to comply with maximum net lease adjusted leverage and minimum fixed charge coverage ratios, as well as other customary affirmative and negative covenants. As of September 30, 2026, the Company was in compliance with all covenants.
The Revolving Credit Facility also permits the issuance of letters of credit upon our request of up to $15,000 . As of September 30, 2026 and December 31, 2025, the Company had outstanding letters of credit of $4,917 and $4,839 , respectively, in connection with the Revolving Credit Facility.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| Classification | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Interest expense on Revolving Credit Facility | Interest expense | $ | $ | $ | $ | ||||||||||||||||||||||||
| Classification | September 30 2026 | December 31 2025 | |||||||||||||||
| Unamortized deferred financing costs on Revolving Credit Facility | Other assets | $ | $ | ||||||||||||||
NOTE 7: LEASES
A summary of operating and finance right-of-use assets and lease liabilities were as follows:
| Classification | September 30 2026 | December 31 2025 | ||||||||||||
| Operating leases | Operating lease assets | $ | $ | |||||||||||
| Finance leases | Property and equipment, net | |||||||||||||
| Total right-of-use assets | $ | $ | ||||||||||||
| Operating leases: | ||||||||||||||
| Operating lease liabilities, current | $ | $ | ||||||||||||
| Long-term operating lease liabilities | ||||||||||||||
| Finance leases: | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Other long-term liabilities | ||||||||||||||
| Total lease liabilities | $ | $ | ||||||||||||
14 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
The components of lease expense were as follows:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| Classification | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Operating lease cost | Occupancy and related expenses Pre-opening costs General and administrative expenses | $ | $ | $ | $ | ||||||||||||||||||||||||
| Finance lease cost: | |||||||||||||||||||||||||||||
| Amortization of right-of-use assets | Depreciation and amortization expense | ||||||||||||||||||||||||||||
| Interest on lease liabilities | Interest expense | ||||||||||||||||||||||||||||
| Variable lease cost | Occupancy and related expenses Pre-opening costs General and administrative expenses | ||||||||||||||||||||||||||||
| Short-term lease cost | Occupancy and related expenses | ||||||||||||||||||||||||||||
| Total lease cost | $ | $ | $ | $ | |||||||||||||||||||||||||
As of September 30, 2026, future minimum lease payments for operating and finance leases consisted of the following:
| Operating Leases | Finance Leases | ||||||||||
2026(1) | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| Thereafter | |||||||||||
| Total minimum payments | |||||||||||
| Less: imputed interest | |||||||||||
| Total lease liabilities | $ | $ | |||||||||
(1)Operating leases are net of certain tenant allowance receivables that were reclassified to Other current assets as of September 30, 2026.
As of September 30, 2026, the Company had additional operating lease commitments of $182,697 for non-cancelable leases without a possession date, which commence in 2026 or later. The terms of these lease commitments are materially consistent with leases recognized on the Condensed Consolidated Balance Sheets.
A summary of lease terms and discount rates for operating and finance leases were as follows:
| September 30 2026 | December 31 2025 | |||||||||||||
| Weighted average remaining lease term (years): | ||||||||||||||
| Operating leases | ||||||||||||||
| Finance leases | ||||||||||||||
| Weighted average discount rate: | ||||||||||||||
| Operating leases | % | % | ||||||||||||
| Finance leases | % | % | ||||||||||||
Shake Shack Inc. Form 10-Q | 15
Form 10-Q | 15Table of Contents
Supplemental cash flow information related to leases was as follows:
| Thirty-Nine Weeks Ended | |||||||||||||||||
| September 30 2026 | September 24 2025 | ||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases | $ | $ | |||||||||||||||
| Operating cash flows from finance leases | |||||||||||||||||
| Financing cash flows from finance leases | |||||||||||||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||||||||
| Operating leases | |||||||||||||||||
| Finance leases | |||||||||||||||||
NOTE 8: NON-CONTROLLING INTERESTS
Shake Shack is the primary beneficiary and sole managing member of SSE Holdings and, as a result, consolidates the financial results of SSE Holdings. The Company reports a non-controlling interest representing the economic interest held by the other members of SSE Holdings. The Third Amended and Restated Limited Liability Company Agreement, as further amended, (the "LLC Agreement") of SSE Holdings provides that holders of SSE Holdings, LLC membership interests ("LLC Interests") may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one -for-one basis. In connection with any redemption or exchange, the Company will receive a corresponding number of LLC Interests, increasing the total ownership interest in SSE Holdings. Changes in the ownership interest in SSE Holdings while the Company retains its controlling interest in SSE Holdings will be accounted for as equity transactions. As such, future redemptions or direct exchanges of LLC Interests in SSE Holdings by the other members of SSE Holdings will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital.
The following table summarizes the ownership interest in SSE Holdings:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| LLC Interests | Ownership % | LLC Interests | Ownership % | ||||||||||||||||||||
| Number of LLC Interests held by Shake Shack Inc. | % | % | |||||||||||||||||||||
| Number of LLC Interests held by non-controlling interest holders | % | % | |||||||||||||||||||||
| Total LLC Interests outstanding | % | % | |||||||||||||||||||||
The weighted average ownership percentages for the applicable reporting periods are used to attribute Net income and Other comprehensive income to the non-controlling interest holders and were as follows:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
| Non-controlling interest holders' weighted average ownership percentages | % | % | % | % | ||||||||||||||||||||||
16 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
The following table summarizes the effects of changes in ownership of SSE Holdings on the Company's equity:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
| Net income attributable to Shake Shack Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | ( | |||||||||||||||||||||||||
| Transfers (to) from non-controlling interests: | ||||||||||||||||||||||||||
| Increase (decrease) in additional paid-in capital as a result of the redemption of LLC Interests | ( | |||||||||||||||||||||||||
| Decrease in additional paid-in capital as a result of activity under stock compensation plan | ( | ( | ( | ( | ||||||||||||||||||||||
| Total effect of changes in ownership interest on equity attributable to Shake Shack Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
The following table summarizes the LLC Interests activity:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
| LLC Interests activity under the Company's stock compensation plan: | ||||||||||||||||||||||||||
| Number of LLC Interests received by Shake Shack Inc. | ||||||||||||||||||||||||||
| Redemption and acquisition of LLC Interests: | ||||||||||||||||||||||||||
| Number of LLC Interests redeemed by non-controlling interest holders | ||||||||||||||||||||||||||
| Number of LLC Interests received by Shake Shack Inc. | ||||||||||||||||||||||||||
| Issuance of Class A common stock: | ||||||||||||||||||||||||||
| Shares of Class A common stock issued in connection with redemptions of LLC Interests | ||||||||||||||||||||||||||
| Cancellation of Class B common stock: | ||||||||||||||||||||||||||
| Shares of Class B common stock surrendered and canceled | ||||||||||||||||||||||||||
NOTE 9: EQUITY-BASED COMPENSATION
A summary of equity-based compensation expense by award type was as follows:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
| Performance stock units | $ | $ | $ | $ | ||||||||||||||||||||||
| Restricted stock units | ||||||||||||||||||||||||||
| Equity-based compensation expense | $ | $ | $ | $ | ||||||||||||||||||||||
Shake Shack Inc. Form 10-Q | 17
Form 10-Q | 17Table of Contents
Equity-based compensation expense recognized was as follows:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
| General and administrative expenses | $ | $ | $ | $ | ||||||||||||||||||||||
| Labor and related expenses | ||||||||||||||||||||||||||
| Pre-opening costs | ( | |||||||||||||||||||||||||
| Equity-based compensation expense | $ | $ | $ | $ | ||||||||||||||||||||||
NOTE 10: INCOME TAXES
Shake Shack is the sole managing member of SSE Holdings, which is classified as a partnership for U.S federal and most applicable state and local income tax purposes. As the managing member, the Company consolidates SSE Holdings financial results. As a partnership, SSE Holdings is not subject to U.S. federal and certain state and local income taxes. Instead, any taxable income or loss generated by SSE Holdings is allocated to its members, including the Company, on a pro rata basis. The Company is subject to U.S. federal, state and local income taxes with respect to its allocable share of taxable income or loss from SSE Holdings, as well as any stand-alone income or loss generated by Shake Shack Inc. The Company is also subject to withholding taxes in foreign jurisdictions.
Effective Income Tax Rates
The following table presents the Company’s effective income tax rates:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
| Effective income tax rates | % | % | % | % | ||||||||||||||||||||||
The decreases in the effective income tax rates for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to state tax rate true-ups recorded in the prior year.
The Company's weighted average ownership interest in SSE Holdings was as follows:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
Shake Shack's weighted average ownership percentages | % | % | % | % | ||||||||||||||||||||||
Deferred Tax Assets and Liabilities
The Company acquires LLC Interests in connection with the redemption of LLC Interests and activity relating to its stock compensation plan and recognizes deferred tax assets associated with the basis difference in its investment in SSE Holdings upon acquisition of these LLC Interests.
18 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
The following table summarizes the LLC Interests acquired by the Company:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
| LLC Interests activity under the Company's stock compensation plan | ||||||||||||||||||||||||||
| LLC Interests activity from redemptions of LLC Interests | ||||||||||||||||||||||||||
Total LLC Interests acquired by the Company | ||||||||||||||||||||||||||
Deferred tax assets related to the basis difference in the Company's investment in SSE Holdings were as follows:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
Deferred tax assets recognized upon acquisition of LLC Interests | $ | $ | ( | $ | $ | |||||||||||||||||||||
| September 30 2026 | December 31 2025 | |||||||||||||
Total deferred tax assets related to the acquisition of LLC Interests | $ | $ | ||||||||||||
The Company also recognizes deferred tax assets related to additional tax basis increases generated from expected future payments under the Tax Receivable Agreement and related deductions for imputed interest on such payments. Refer to "Tax Receivable Agreement," herein for additional information.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
Deferred tax assets recognized under the Tax Receivable Agreement | $ | $ | $ | $ | ||||||||||||||||||||||
The Company evaluates the realizability of its deferred tax assets on a quarterly basis and establishes valuation allowances when it is more likely than not that all or a portion of a deferred tax asset may not be realized. As of September 30, 2026, the Company concluded, based on the weight of all available positive and negative evidence, that all of its deferred tax assets (except for those deferred tax assets relating to certain state tax credits and net operating losses) are more likely than not to be realized. As such, no additional valuation allowance was recognized.
One Big Beautiful Bill Act
On July 4, 2025, bill H.R. 1, commonly referred to as the "One Big Beautiful Bill Act" or "OBBBA," was signed into law, with certain provisions effective in 2025 and others in 2026. The Act provides for changes to U.S. federal tax law, including the expensing of U.S. research expenditures and certain eligible capital expenditures, among other provisions. The Company has recognized the effects of the OBBBA provisions in its financial results to the extent they are applicable to the thirty-nine weeks ended September 30, 2026.
Tax Receivable Agreement
On February 4, 2015, the Company entered into a tax receivable agreement with certain then-existing non-controlling members of SSE Holdings (the "Tax Receivable Agreement"). This agreement obligates the Company to pay the non-controlling interest holders 85 % of any tax benefits that the Company may actually realize, or be deemed to realize, from (i) increases in the Company's share of the tax basis of SSE Holdings due to redemptions or exchanges of LLC Interests, (ii) tax basis increases resulting from payments made under the Tax Receivable Agreement, and (iii) deductions from imputed interest under the agreement (the "TRA Payments"). The Company expects to benefit from the remaining 15 % of any realized tax benefits. The TRA Payments are not conditioned upon any continued ownership interest in SSE Holdings or us. Additionally, the rights of each non-controlling interest holder under the Tax Receivable Agreement, are assignable to transferees of its LLC Interests.
Shake Shack Inc. Form 10-Q | 19
Form 10-Q | 19Table of Contents
Pursuant to the Company's election under Section 754 of the Internal Revenue Code (the "Code"), the Company expects to obtain an increase in its share of the tax basis in the net assets of SSE Holdings when LLC Interests are redeemed or exchanged by the other members of SSE Holdings. The Company plans to make an election under Section 754 of the Code for each taxable year in which a redemption or exchange of LLC Interest occurs. The Company intends to treat any redemptions and exchanges of LLC Interests as direct purchases of LLC Interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that would otherwise be paid in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
There were no transactions subject to the Tax Receivable Agreement for which the Company did not recognize the related liability, as the Company concluded that it would have sufficient future taxable income to utilize all of the related tax benefits generated by all transactions that occurred during the thirty-nine weeks ended September 30, 2026 and September 24, 2025.
A summary of obligations and payments made under the Tax Receivable Agreement were as follows:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
Amounts paid under the Tax Receivable Agreement, including interest | $ | $ | $ | $ | ||||||||||||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||
Additional liabilities recognized under the Tax Receivable Agreement | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
| September 30 2026 | December 31 2025 | |||||||||||||
Total obligations under the Tax Receivable Agreement | $ | $ | ||||||||||||
NOTE 11: EARNINGS PER SHARE
Basic earnings per share of Class A common stock is computed by dividing Net income attributable to Shake Shack Inc. by the weighted average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing Net income attributable to Shake Shack Inc. by the weighted average number of shares of Class A common stock outstanding, adjusted to give effect to potentially dilutive securities.
20 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock (in thousands, except per share amounts):
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||
| Net income attributable to Shake Shack Inc.—basic | $ | $ | $ | $ | |||||||||||||||||||||||||
| Net income attributable to Shake Shack Inc.—diluted | $ | $ | $ | $ | |||||||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||
| Weighted average shares of Class A common stock outstanding—basic | |||||||||||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||||||||
| Performance stock units | |||||||||||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||||||||
| Convertible Notes | |||||||||||||||||||||||||||||
| Weighted average shares of Class A common stock outstanding—diluted | |||||||||||||||||||||||||||||
| Earnings per share of Class A common stock—basic | $ | $ | $ | $ | |||||||||||||||||||||||||
| Earnings per share of Class A common stock—diluted | $ | $ | $ | $ | |||||||||||||||||||||||||
The effect of potential share settlement of the Convertible Notes outstanding for the period is included as potentially dilutive shares of Class A common stock under application of the if-converted method in the computation of diluted earnings per share, except when the effect would be anti-dilutive. Refer to Note 6, Debt, for additional information.
Shares of Class B common stock do not share in the earnings or losses of Shake Shack and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. However, shares of Class B common stock outstanding for the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method and are included in the computation of diluted earnings per share, except when the effect would be anti-dilutive.
The following table presents potentially dilutive securities excluded from the computations of diluted earnings per share of Class A common stock:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||||||||
| Performance stock units | (1) | (1) | (1) | (1) | |||||||||||||||||||||||||
| Shares of Class B common stock | (2) | (2) | (2) | (2) | |||||||||||||||||||||||||
(1)Number of securities outstanding at the end of the period that were excluded from the computation of diluted earnings per share of Class A common stock because the performance conditions associated with these awards were not met assuming the end of the reporting period was the end of the performance period.
(2)Number of securities outstanding at the end of the period that were excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive.
Shake Shack Inc. Form 10-Q | 21
Form 10-Q | 21Table of Contents
NOTE 12: SUPPLEMENTAL CASH FLOW INFORMATION
The following table sets forth supplemental cash flow information:
| Thirty-Nine Weeks Ended | ||||||||||||||
| September 30 2026 | September 24 2025 | |||||||||||||
| Cash paid for: | ||||||||||||||
| Income taxes, net of refunds | $ | $ | ||||||||||||
| Interest, net of amounts capitalized | ||||||||||||||
| Non-cash investing activities: | ||||||||||||||
| Accrued purchases of property and equipment | ||||||||||||||
| Capitalized equity-based compensation | ||||||||||||||
| Non-cash financing activities: | ||||||||||||||
Establishment of liabilities under Tax Receivable Agreement | ( | |||||||||||||
NOTE 13: COMMITMENTS AND CONTINGENCIES
Lease Commitments
The Company is obligated under various operating leases for Shacks and Shack Support Centers expiring in various years through 2045. Under certain of these leases, the Company is liable for contingent rent based on a percentage of sales in excess of specified thresholds and typically responsible for its proportionate share of real estate taxes, common area maintenance costs and other occupancy costs.
Certain leases require the Company to obtain letters of credit. As of September 30, 2026, the Company held three letters of credit totaling $695 .
Purchase Commitments
Purchase obligations include legally binding contracts, including commitments for the purchase, construction or remodeling of real estate and facilities, firm minimum commitments for inventory purchases, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts. These obligations are generally short-term in nature and are recorded as liabilities when the related goods are received or services rendered. The Company also enters into long-term, exclusive contracts with certain vendors to supply food, beverages and paper goods, obligating the Company to purchase specified quantities.
Legal Contingencies
The Company is subject to various legal proceedings, claims and liabilities, involving employees and guests alike, which arise in the ordinary course of business and are generally covered by insurance. As of September 30, 2026, the amount of the ultimate liability with respect to these matters was not material.
Liabilities under Tax Receivable Agreement
The Company is a party to the Tax Receivable Agreement under which it is contractually committed to pay certain of the members of SSE Holdings 85 % of the amount of any tax benefits that are actually realized, or in some cases are deemed to realize, as a result of certain transactions. The Company is not obligated to make any payments under the Tax Receivable Agreement until the tax benefits associated with the transactions that gave rise to the payments are realized. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. If the Company does not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then it would not be required
22 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
to make the related TRA Payments. The Company recognizes liabilities relating to the obligations under the Tax Receivable Agreement if concluding that it is probable that it would have sufficient future taxable income over the term of the Tax Receivable Agreement to utilize the related tax benefits. Refer to Note 10, Income Taxes, for additional information relating to the Tax Receivable Agreement.
NOTE 14: RELATED PARTY TRANSACTIONS
Madison Square Park Conservancy
The Chairman of the Board of Directors serves as a director of the Madison Square Park Conservancy ("MSP Conservancy"), with which Shake Shack has a license agreement and pays license fees to operate the Madison Square Park Shack. No
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| Classification | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Amounts paid to MSP Conservancy | Occupancy and related expenses Other operating expenses | $ | $ | $ | $ | ||||||||||||||||||||||||
Tax Receivable Agreement
The Company entered into a Tax Receivable Agreement that provides for the payment by the Company of 85 % of the amount of any tax benefits that are actually realized, or in some cases are deemed to realize, as a result of certain transactions. Refer to Note 10, Income Taxes, for additional information.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| Classification | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
Amounts paid under the Tax Receivable Agreement, including interest | Other current liabilities | $ | $ | $ | $ | ||||||||||||||||||||||||
| Classification | September 30 2026 | December 31 2025 | |||||||||||||||
| Amounts due under the Tax Receivable Agreement | Other current liabilities Liabilities under Tax Receivable Agreement, net of current portion | $ | $ | ||||||||||||||
Distributions to Members of SSE Holdings
Under the terms of the SSE Holdings LLC Agreement, SSE Holdings is obligated to make tax distributions to its members. No tax distributions were payable to non-controlling interest holders as of September 30, 2026 and December 31, 2025.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| Classification | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Amounts paid to non-controlling interest holders | Non-controlling interests | $ | $ | $ | $ | ||||||||||||||||||||||||
Shake Shack Inc. Form 10-Q | 23
Form 10-Q | 23Table of Contents
NOTE 15: SEGMENT REPORTING
Shake Shack operates and licenses Shake Shack restaurants, which serve burgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard and more. The Company operates Shacks in the United States and has both domestic and international licensed Shacks.
The chief operating decision maker (the "CODM") is the Chief Executive Officer. The Company determined it has one operating segment and one reportable segment, as the CODM regularly reviews Shack operations and financial performance at a consolidated level. The CODM also allocates resources at a consolidated level.
The CODM uses net income to allocate resources (including labor, technology, and capital resources) for the single segment to make decisions regarding annual budget, new Shack openings, entering new geographic markets, landlord and vendor negotiations, marketing decisions, pursuing new business ventures, and driving the Company's mission.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||||||||
Segment revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||
| Food and paper costs | |||||||||||||||||||||||||||||
| Labor and related expenses | |||||||||||||||||||||||||||||
Other operating expenses(1) | |||||||||||||||||||||||||||||
| Occupancy and related expenses | |||||||||||||||||||||||||||||
General and administrative expenses | |||||||||||||||||||||||||||||
| Depreciation and amortization expense | |||||||||||||||||||||||||||||
| Pre-opening costs | |||||||||||||||||||||||||||||
| Impairments, loss on disposal of assets, and Shack closures | |||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||||||||
Other income, net(2) | ( | ( | ( | ( | |||||||||||||||||||||||||
| Segment income | |||||||||||||||||||||||||||||
Reconciliation of profit or loss: | |||||||||||||||||||||||||||||
| Adjustments and reconciling items | |||||||||||||||||||||||||||||
| Consolidated net income | $ | $ | $ | $ | |||||||||||||||||||||||||
| September 30 2026 | December 31 2025 | ||||||||||||||||||||||||||||
| Total Assets | $ | $ | |||||||||||||||||||||||||||
(1)Other operating expenses consist of delivery commissions, Shack-level marketing expenses, repairs and maintenance, utilities, and other operating expenses incidental to operating our Company-operated Shacks, such as non-perishable supplies, credit card fees and property insurance.
(2)Other income, net consists primarily of interest income, adjustments to liabilities under the Tax Receivable Agreement, dividend income, and net unrealized and realized gain and losses from marketable securities. Interest income was $42 and $159 for the thirteen and thirty-nine weeks ended September 30, 2026, respectively, and $32 and $120 for the thirteen and thirty-nine weeks ended September 24, 2025, respectively.
24 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
This section and other parts of this Quarterly Report on Form 10-Q ("Form 10-Q") contain 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 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," "target," "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 statement, as set forth in this Form 10-Q. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this Form 10-Q in the context of the risks and uncertainties disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 ("2025 Form 10-K"), our subsequent Quarterly Reports on Form 10-Q, and our other filings with the SEC.
The forward-looking statements included in this Form 10-Q 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.
The following discussion should be read in conjunction with our 2025 Form 10-K, our subsequent Quarterly Reports on Form 10-Q, the Condensed Consolidated Financial Statements and notes thereto included in Part I, Item 1 of this Form 10-Q, and our other filings with the SEC. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years and the associated quarters, months and periods of those fiscal years.
OVERVIEW
Shake Shack serves elevated versions of American classics using only the best ingredients. We're known for our delicious made-to-order Angus beef burgers, crinkle cut fries, crispy chicken, hand-spun milkshakes, house-made lemonades, and more. With our high-quality food at a great value, warm hospitality, and a commitment to crafting uplifting experiences, Shake Shack has become a cult-brand with widespread appeal.
The following definitions apply to these terms as used herein:
"Average weekly sales" 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 open such that it corresponds to the period of associated sales.
"Same-Shack sales" represents Shack sales for the comparable Shack base, which is defined as the number of Company-operated Shacks open for 24 full fiscal months or longer. For consecutive days that Shacks were temporarily closed, the comparative period was also adjusted.
“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, opening fees, and termination fees.
Shake Shack Inc. Form 10-Q | 25
Form 10-Q | 25Table of Contents
Key Operating Metrics
Same-Shack sales for the thirteen weeks ended September 30, 2026 increased 2.5% compared to the same period last year, driven by a 1.7% increase in price mix and a 0.8% increase in guest traffic. Same-Shack sales for the thirty-nine weeks ended September 30, 2026 increased 3.5% compared to the same period last year, driven by a 2.1% increase in price mix and a 1.4% increase in guest traffic. For the purpose of calculating same-Shack sales for the thirteen and thirty-nine weeks ended September 30, 2026, Shack sales for 304 Shacks were included in the comparable Shack base.
Average weekly sales were $75,000 for the thirteen weeks ended September 30, 2026, compared to $78,000 for the same period last year. Average weekly sales were $75,000 for the thirty-nine weeks ended September 30, 2026, compared to $76,000 for the same period last year. The decreases were primarily due to the continued acceleration of our development pipeline leading to a larger portion of our system consisting of Shacks that are ramping toward mature sales volumes.
System-wide sales for the thirteen weeks ended September 30, 2026 increased 12.8% to $644.8 million compared to the same period last year. System-wide sales for the thirty-nine weeks ended September 30, 2026 increased 13.5% to $1,828.9 million compared to the same period last year.
In Q3 2026, we changed our definition of digital sales to include kiosk and exclude third-party delivery. We believe digital sales, which now consists of kiosk, the Shake Shack app and website channels, better reflects how we make investment decisions, prioritize and review our digital business to deepen our understanding of guest behavior. Digital sales for prior periods have been reclassified to reflect this change and are included in the tables below.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| April 1, 2026 | July 1, 2026 | September 30, 2026 | September 30, 2026 | |||||||||||||||||||||||
| Digital Sales | $ | 206,006 | $ | 237,931 | $ | 240,180 | $ | 684,117 | ||||||||||||||||||
| Percentage of Shack sales | 58.2 | % | 59.0 | % | 58.9 | % | 58.7 | % | ||||||||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| March 26, 2025 | June 25, 2025 | September 24, 2025 | September 24, 2025 | |||||||||||||||||||||||
| Digital Sales | $ | 166,884 | $ | 195,351 | $ | 205,299 | $ | 567,534 | ||||||||||||||||||
| Percentage of Shack sales | 53.9 | % | 56.9 | % | 58.2 | % | 56.4 | % | ||||||||||||||||||
Development Highlights
The following tables summarize the Shacks opened and closed during the thirteen and thirty-nine weeks ended September 30, 2026.
| Thirteen Weeks Ended | |||||||||||||||||||||||
| September 30, 2026 | |||||||||||||||||||||||
| Company-operated | Licensed | System Wide | |||||||||||||||||||||
Shack counts at the beginning of period | 406 | 297 | 703 | ||||||||||||||||||||
Openings | 21 | 16 | 37 | ||||||||||||||||||||
Permanent closures | — | (2) | (2) | ||||||||||||||||||||
Shack counts at the end of period | 427 | 311 | 738 | ||||||||||||||||||||
26 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
| Thirty-Nine Weeks Ended | |||||||||||||||||||||||
| September 30, 2026 | |||||||||||||||||||||||
| Company-operated | Licensed | System Wide | |||||||||||||||||||||
Shack counts at the beginning of period | 373 | 286 | 659 | ||||||||||||||||||||
Openings | 54 | 32 | 86 | ||||||||||||||||||||
Permanent closures | — | (7) | (7) | ||||||||||||||||||||
Shack counts at the end of period | 427 | 311 | 738 | ||||||||||||||||||||
Shake Shack Inc. Form 10-Q | 27
Form 10-Q | 27RESULTS OF OPERATIONS
The following table summarizes our results of operations for the thirteen and thirty-nine weeks ended September 30, 2026 and September 24, 2025:
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||||||||||||||||
| Shack sales | $ | 408,026 | 96.4 | % | $ | 352,846 | 96.0 | % | $ | 1,165,510 | 96.5 | % | $ | 1,005,908 | 96.3 | % | ||||||||||||||||||||||
| Licensing revenue | 15,247 | 3.6 | % | 14,565 | 4.0 | % | 42,118 | 3.5 | % | 38,867 | 3.7 | % | ||||||||||||||||||||||||||
| TOTAL REVENUE | 423,273 | 100.0 | % | 367,411 | 100.0 | % | 1,207,628 | 100.0 | % | 1,044,775 | 100.0 | % | ||||||||||||||||||||||||||
Shack-level operating expenses(1): | ||||||||||||||||||||||||||||||||||||||
| Food and paper costs | 115,276 | 28.3 | % | 103,461 | 29.3 | % | 331,575 | 28.4 | % | 286,119 | 28.4 | % | ||||||||||||||||||||||||||
Labor and related expenses | 103,823 | 25.4 | % | 88,033 | 24.9 | % | 297,766 | 25.5 | % | 262,759 | 26.1 | % | ||||||||||||||||||||||||||
| Other operating expenses | 65,828 | 16.1 | % | 53,779 | 15.2 | % | 186,458 | 16.0 | % | 152,809 | 15.2 | % | ||||||||||||||||||||||||||
| Occupancy and related expenses | 31,366 | 7.7 | % | 26,995 | 7.7 | % | 90,171 | 7.7 | % | 77,219 | 7.7 | % | ||||||||||||||||||||||||||
General and administrative expenses | 44,989 | 10.6 | % | 44,381 | 12.1 | % | 146,918 | 12.2 | % | 125,692 | 12.0 | % | ||||||||||||||||||||||||||
| Depreciation and amortization expense | 32,930 | 7.8 | % | 27,079 | 7.4 | % | 92,767 | 7.7 | % | 80,167 | 7.7 | % | ||||||||||||||||||||||||||
| Pre-opening costs | 6,978 | 1.6 | % | 4,625 | 1.3 | % | 20,486 | 1.7 | % | 12,798 | 1.2 | % | ||||||||||||||||||||||||||
| Impairments, loss on disposal of assets, and Shack closures | 601 | 0.1 | % | 510 | 0.1 | % | 1,893 | 0.2 | % | 3,448 | 0.3 | % | ||||||||||||||||||||||||||
| TOTAL EXPENSES | 401,791 | 94.9 | % | 348,863 | 95.0 | % | 1,168,034 | 96.7 | % | 1,001,011 | 95.8 | % | ||||||||||||||||||||||||||
| INCOME FROM OPERATIONS | 21,482 | 5.1 | % | 18,548 | 5.0 | % | 39,594 | 3.3 | % | 43,764 | 4.2 | % | ||||||||||||||||||||||||||
| Other income, net | 2,459 | 0.6 | % | 3,103 | 0.8 | % | 7,804 | 0.6 | % | 8,924 | 0.9 | % | ||||||||||||||||||||||||||
| Interest expense | (567) | (0.1) | % | (504) | (0.1) | % | (1,668) | (0.1) | % | (1,615) | (0.2) | % | ||||||||||||||||||||||||||
| INCOME BEFORE INCOME TAXES | 23,374 | 5.5 | % | 21,147 | 5.8 | % | 45,730 | 3.8 | % | 51,073 | 4.9 | % | ||||||||||||||||||||||||||
| Income tax expense | 5,607 | 1.3 | % | 7,436 | 2.0 | % | 11,375 | 0.9 | % | 14,366 | 1.4 | % | ||||||||||||||||||||||||||
| NET INCOME | 17,767 | 4.2 | % | 13,711 | 3.7 | % | 34,355 | 2.8 | % | 36,707 | 3.5 | % | ||||||||||||||||||||||||||
| Less: Net income attributable to non-controlling interests | 1,281 | 0.3 | % | 1,210 | 0.3 | % | 2,479 | 0.2 | % | 2,813 | 0.3 | % | ||||||||||||||||||||||||||
| NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC. | $ | 16,486 | 3.9 | % | $ | 12,501 | 3.4 | % | $ | 31,876 | 2.6 | % | $ | 33,894 | 3.2 | % | ||||||||||||||||||||||
(1)As a percentage of Shack sales.
Shack Sales
Shack sales represent the aggregate sales of food, beverages and Shake Shack branded merchandise at our Company-operated Shacks and gift card breakage income. Shack sales in any period are directly influenced by the number of operating weeks in such period and the total number of open Shacks.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Shack sales | $ | 408,026 | $ | 352,846 | $ | 1,165,510 | $ | 1,005,908 | |||||||||||||||||||||
| Percentage of Total revenue | 96.4 | % | 96.0 | % | 96.5 | % | 96.3 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | 55,180 | $ | 159,602 | |||||||||||||||||||||||||
| Percentage change compared to prior year | 15.6 | % | 15.9 | % | |||||||||||||||||||||||||
Shack sales for the thirteen weeks ended September 30, 2026 increased 15.6% to $408.0 million versus the same period last year. The increase was primarily due to the opening of 69 new Company-operated Shacks between September 24, 2025 and September 30, 2026, which contributed $47.4 million, as well as a 2.5% increase in same-Shack sales.
28 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
Shack sales for the thirty-nine weeks ended September 30, 2026 increased 15.9% to $1,165.5 million versus the same period last year. The increase was primarily due to the opening of 69 new Company-operated Shacks between September 24, 2025 and September 30, 2026, which contributed $102.5 million, as well as a 3.5% increase in same-Shack sales.
Licensing Revenue
Licensing revenue includes initial territory fees, Shack opening fees, termination fees and ongoing sales-based royalty fees from licensed Shacks.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Licensing revenue | $ | 15,247 | $ | 14,565 | $ | 42,118 | $ | 38,867 | |||||||||||||||||||||
| Percentage of Total revenue | 3.6 | % | 4.0 | % | 3.5 | % | 3.7 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | 682 | $ | 3,251 | |||||||||||||||||||||||||
| Percentage change compared to prior year | 4.7 | % | 8.4 | % | |||||||||||||||||||||||||
Licensing revenue for the thirteen weeks ended September 30, 2026 increased 4.7% to $15.2 million versus the same period last year. The increase was primarily due to the opening of 49 new licensed Shacks between September 24, 2025 and September 30, 2026, which contributed $1.7 million, partially offset by decreased revenue from existing licensed Shacks, and the permanent closure of nine licensed Shacks between September 24, 2025 and September 30, 2026.
Licensing revenue for the thirty-nine weeks ended September 30, 2026 increased 8.4% to $42.1 million versus the same period last year. The increase was primarily due to the opening of 49 new licensed Shacks between September 24, 2025 and September 30, 2026, which contributed $3.5 million.
Food and Paper Costs
Food and paper costs include the direct costs associated with food, beverage and packaging of our menu items. The components of Food and paper costs are variable by nature, change with sales volume, and are impacted by menu mix, channel mix and fluctuations in commodity costs, as well as geographic scale and proximity.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Food and paper costs | $ | 115,276 | $ | 103,461 | $ | 331,575 | $ | 286,119 | |||||||||||||||||||||
| Percentage of Shack sales | 28.3 | % | 29.3 | % | 28.4 | % | 28.4 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | 11,815 | $ | 45,456 | |||||||||||||||||||||||||
| Percentage change compared to prior year | 11.4 | % | 15.9 | % | |||||||||||||||||||||||||
Food and paper costs for the thirteen weeks ended September 30, 2026 increased 11.4% to $115.3 million versus the same period last year. Food and paper costs for the thirty-nine weeks ended September 30, 2026 increased 15.9% to $331.6 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to the opening of 69 new Company-operated Shacks between September 24, 2025 and September 30, 2026, which contributed approximately $14.0 million and $30.8 million, respectively.
As a percentage of Shack sales, the decrease in Food and paper costs for the thirteen weeks ended September 30, 2026 was primarily due to increased menu prices and lower blended commodity costs, partially offset by marketing promotions. As a percentage of Shack sales, Food and paper costs were flat for the thirty-nine weeks ended September 30, 2026.
Shake Shack Inc. Form 10-Q | 29
Form 10-Q | 29Table of Contents
Labor and Related Expenses
Labor and related expenses include Company-operated Shack-level hourly and management wages, bonuses, payroll taxes, equity-based compensation, workers' compensation expense and medical benefits. As we expect with other variable expense items, labor costs should grow as our Shack sales grow. Factors that influence labor costs include minimum wage and payroll tax legislation, health care costs, size and location of the Shack and the performance of our Company-operated Shacks.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Labor and related expenses | $ | 103,823 | $ | 88,033 | $ | 297,766 | $ | 262,759 | |||||||||||||||||||||
| Percentage of Shack sales | 25.4 | % | 24.9 | % | 25.5 | % | 26.1 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | 15,790 | $ | 35,007 | |||||||||||||||||||||||||
| Percentage change compared to prior year | 17.9 | % | 13.3 | % | |||||||||||||||||||||||||
Labor and related expenses for the thirteen weeks ended September 30, 2026 increased 17.9% to $103.8 million versus the same period last year. Labor and related expenses for the thirty-nine weeks ended September 30, 2026 increased 13.3% to $297.8 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to the opening of 69 new Company-operated Shacks between September 24, 2025 and September 30, 2026, which contributed $13.7 million and $29.6 million, respectively.
As a percentage of Shack sales, the increase in Labor and related expenses for the thirteen weeks ended September 30, 2026 was primarily due to increased wages and incremental expenses from the opening of 69 new Company-operated Shacks between September 24, 2025 and September 30, 2026. As a percentage of Shack sales, the decrease in Labor and related expenses for the thirty-nine weeks ended September 30, 2026 was primarily due to labor efficiencies and sales leverage, partially offset by increased wages and incremental expenses from the opening of 69 new Company-operated Shacks between September 24, 2025 and September 30, 2026.
Other Operating Expenses
Other operating expenses consist of delivery commissions, Shack-level marketing expenses, repairs and maintenance, utilities and other operating expenses incidental to operating our Company-operated Shacks, such as non-perishable supplies, credit card fees and property insurance.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Other operating expenses | $ | 65,828 | $ | 53,779 | $ | 186,458 | $ | 152,809 | |||||||||||||||||||||
| Percentage of Shack sales | 16.1 | % | 15.2 | % | 16.0 | % | 15.2 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | 12,049 | $ | 33,649 | |||||||||||||||||||||||||
| Percentage change compared to prior year | 22.4 | % | 22.0 | % | |||||||||||||||||||||||||
Other operating expenses for the thirteen weeks ended September 30, 2026 increased 22.4% to $65.8 million versus the same period last year. Other operating expenses for the thirty-nine weeks ended September 30, 2026 increased 22.0% to $186.5 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to increased transaction costs associated with higher sales and increased facilities costs.
As a percentage of Shack sales, the increases in Other operating expenses for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to increased delivery commissions associated with higher delivery sales and increased facilities costs.
30 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
Occupancy and Related Expenses
Occupancy and related expenses consist of Shack-level occupancy expenses (including rent, common area expenses and certain local taxes), and exclude occupancy expenses associated with unopened Shacks, which are recorded separately in Pre-opening costs.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Occupancy and related expenses | $ | 31,366 | $ | 26,995 | $ | 90,171 | $ | 77,219 | |||||||||||||||||||||
| Percentage of Shack sales | 7.7 | % | 7.7 | % | 7.7 | % | 7.7 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | 4,371 | $ | 12,952 | |||||||||||||||||||||||||
| Percentage change compared to prior year | 16.2 | % | 16.8 | % | |||||||||||||||||||||||||
Occupancy and related expenses for the thirteen weeks ended September 30, 2026 increased 16.2% to $31.4 million versus the same period last year. Occupancy and related expenses for the thirty-nine weeks ended September 30, 2026 increased 16.8% to $90.2 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to the opening of 69 new Company-operated Shacks between September 24, 2025 and September 30, 2026, which contributed approximately $3.3 million and $6.6 million, respectively.
As a percentage of Shack sales, Occupancy and related expenses were flat for the thirteen and thirty-nine weeks ended September 30, 2026.
General and Administrative Expenses
General and administrative expenses consist of costs associated with corporate and administrative functions that support Shack development and operations, as well as equity-based compensation expense.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| General and administrative expenses | $ | 44,989 | $ | 44,381 | $ | 146,918 | $ | 125,692 | |||||||||||||||||||||
| Percentage of Total revenue | 10.6 | % | 12.1 | % | 12.2 | % | 12.0 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | 608 | $ | 21,226 | |||||||||||||||||||||||||
| Percentage change compared to prior year | 1.4 | % | 16.9 | % | |||||||||||||||||||||||||
General and administrative expenses for the thirteen weeks ended September 30, 2026 increased 1.4% to $45.0 million versus the same period last year. The increase was primarily due to investments in our team members and technology capabilities, partially offset by efficiencies in our marketing spend. As a percentage of Total revenue, the decrease in General and administrative expenses for the thirteen weeks ended September 30, 2026 was primarily due to sales leverage, partially offset by the aforementioned items.
General and administrative expenses for the thirty-nine weeks ended September 30, 2026 increased 16.9% to $146.9 million versus the same period last year. The increase was primarily due to increased investments in marketing initiatives, increased wages and other team member costs to support our Shack growth and increased investments in technology initiatives. As a percentage of Total revenue, the increase in General and administrative expenses for the thirty-nine weeks ended September 30, 2026 was primarily due to the aforementioned items.
Shake Shack Inc. Form 10-Q | 31
Form 10-Q | 31Table of Contents
Depreciation and Amortization Expense
Depreciation and amortization expense primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Depreciation and amortization expense | $ | 32,930 | $ | 27,079 | $ | 92,767 | $ | 80,167 | |||||||||||||||||||||
| Percentage of Total revenue | 7.8 | % | 7.4 | % | 7.7 | % | 7.7 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | 5,851 | $ | 12,600 | |||||||||||||||||||||||||
| Percentage change compared to prior year | 21.6 | % | 15.7 | % | |||||||||||||||||||||||||
Depreciation and amortization expense for the thirteen weeks ended September 30, 2026 increased 21.6% to $32.9 million versus the same period last year. Depreciation and amortization expense for the thirty-nine weeks ended September 30, 2026 increased 15.7% to $92.8 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to incremental depreciation of capital expenditures related to the opening of 69 new Company-operated Shacks between September 24, 2025 and September 30, 2026.
Pre-Opening Costs
Pre-opening costs consist primarily of occupancy, manager and team member wages, cookware, travel and lodging costs for our opening training team and other supporting team members, marketing expenses, legal fees and inventory costs incurred prior to the opening of a Company-operated Shack. All such costs incurred prior to the opening of a Company-operated Shack are expensed in the period in which the expense was incurred. Pre-opening costs can fluctuate significantly from period to period, based on the number and timing of Company-operated Shack openings, and the mix of formats we open from period to period. Additionally, Company-operated Shack openings in new geographic markets may initially experience higher pre-opening costs than our established geographic markets, such as the New York City metropolitan area and southern California, where we have greater economies of scale and incur lower travel and lodging costs for our training team.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Pre-opening costs | $ | 6,978 | $ | 4,625 | $ | 20,486 | $ | 12,798 | |||||||||||||||||||||
| Percentage of Total revenue | 1.6 | % | 1.3 | % | 1.7 | % | 1.2 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | 2,353 | $ | 7,688 | |||||||||||||||||||||||||
| Percentage change compared to prior year | 50.9 | % | 60.1 | % | |||||||||||||||||||||||||
Pre-opening costs for the thirteen weeks ended September 30, 2026 increased 50.9% to $7.0 million versus the same period last year. Pre-opening costs for the thirty-nine weeks ended September 30, 2026 increased 60.1% to $20.5 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to increased wages and team costs, occupancy costs and other operating expenses to support our larger development pipeline which includes more Shacks opened during the thirteen and thirty-nine weeks ended September 30, 2026 and Shacks under construction compared to the same prior year periods.
Impairments, loss on disposal of assets, and Shack closures
Impairments, loss on disposal of assets, and Shack closures primarily consists of the net book value of assets that have been retired which primarily consists of furniture, equipment and fixtures that were replaced in the normal course of business; impairment charges related to our long-lived assets, which includes property and equipment, as well as operating and finance lease assets; and miscellaneous Shack closure expenses, including employee-related costs, cleaning, and sign removal costs.
32 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
Impairments, loss on disposal of assets, and Shack closures | $ | 601 | $ | 510 | $ | 1,893 | $ | 3,448 | |||||||||||||||||||||
| Percentage of Total revenue | 0.1 | % | 0.1 | % | 0.2 | % | 0.3 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | 91 | $ | (1,555) | |||||||||||||||||||||||||
| Percentage change compared to prior year | 17.8 | % | (45.1) | % | |||||||||||||||||||||||||
Impairments, loss on disposal of assets, and Shack closures for the thirteen weeks ended September 30, 2026 increased $0.1 million to $0.6 million versus the same period last year. The increase was primarily due to expenses related to the relocation of one Company-operated Shack in fiscal 2026.
Impairments, loss on disposal of assets, and Shack closures for the thirty-nine weeks ended September 30, 2026 decreased $1.6 million to $1.9 million, versus the same period last year. The decrease was primarily due to the absence of expenses related to the closure of nine Company-operated Shacks in fiscal 2024.
Other Income, Net
Other income, net consists primarily of interest income, adjustments to liabilities under the Tax Receivable Agreement, dividend income and net unrealized and realized gains and losses from marketable securities.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Other income, net | $ | 2,459 | $ | 3,103 | $ | 7,804 | $ | 8,924 | |||||||||||||||||||||
| Percentage of Total revenue | 0.6 | % | 0.8 | % | 0.6 | % | 0.9 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | (644) | $ | (1,120) | |||||||||||||||||||||||||
| Percentage change compared to prior year | (20.8) | % | (12.6) | % | |||||||||||||||||||||||||
Other income, net for the thirteen weeks ended September 30, 2026 decreased $0.6 million to $2.5 million versus the same period last year. Other income, net for the thirty-nine weeks ended September 30, 2026 decreased $1.1 million to $7.8 million versus the same period last year. The decreases for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to lower dividends.
Interest Expense
Interest expense generally consists of imputed interest related to our financing equipment leases, amortization of deferred financing costs, interest and fees on our Revolving Credit Facility, interest on the current portion of our liabilities under the Tax Receivable Agreement and amortization of debt issuance costs.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Interest expense | $ | (567) | $ | (504) | $ | (1,668) | $ | (1,615) | |||||||||||||||||||||
| Percentage of Total revenue | (0.1) | % | (0.1) | % | (0.1) | % | (0.2) | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | (63) | $ | (53) | |||||||||||||||||||||||||
| Percentage change compared to prior year | 12.5 | % | 3.3 | % | |||||||||||||||||||||||||
Interest expense for the thirteen weeks ended September 30, 2026 increased $0.1 million to $0.6 million versus the same period last year. Interest expense for the thirty-nine weeks ended September 30, 2026 increased $0.1 million to $1.7 million versus the same period last year. The increases for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to increases in various sales tax audit assessment charges, partially offset by decreases in finance lease charges related to new financing equipment leases with lower lease liability balances.
Shake Shack Inc. Form 10-Q | 33
Form 10-Q | 33Table of Contents
Income Tax Expense
We are the sole managing member of SSE Holdings and, as a result, consolidate the financial results of SSE Holdings. For U.S. federal and certain state and local tax purposes, SSE Holdings is classified as a partnership. Consequently, any taxable income or loss generated by SSE Holdings is passed through to and included in the taxable income or loss of its members, including us, on a pro rata basis. As a result, the Company is subject to U.S. federal income taxes, along with applicable state and local taxes on its allocable share of any taxable income or loss of SSE Holdings. Additionally, the Company is taxed on any standalone income or loss generated by Shake Shack, Inc. The Company is also subject to withholding taxes in certain foreign jurisdictions.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Income tax expense | $ | 5,607 | $ | 7,436 | $ | 11,375 | $ | 14,366 | |||||||||||||||||||||
| Percentage of Total revenue | 1.3 | % | 2.0 | % | 0.9 | % | 1.4 | % | |||||||||||||||||||||
| Dollar change compared to prior year | $ | (1,829) | $ | (2,991) | |||||||||||||||||||||||||
| Percentage change compared to prior year | (24.6) | % | (20.8) | % | |||||||||||||||||||||||||
Our effective income tax rates for the thirteen weeks ended September 30, 2026 and September 24, 2025 were 24.0% and 35.2%, respectively. Our effective income tax rates for the thirty-nine weeks ended September 30, 2026 and September 24, 2025 were 24.9% and 28.1%, respectively. The decreases in the effective income tax rates for the thirteen and thirty-nine weeks ended September 30, 2026 were primarily due to state tax rate true-ups recorded in the prior year.
The Company's ownership interest in SSE Holdings is directly related to its share of the taxable income of SSE Holdings. Our weighted average ownership interest in SSE Holdings was 94.4% and 94.3%, respectively, for the thirteen weeks ended September 30, 2026 and September 24, 2025 and 94.3% for the thirty-nine weeks ended September 30, 2026 and September 24, 2025.
Net Income Attributable to Non-controlling Interests
We are the sole managing member of SSE Holdings and have the sole voting power in, and control the management of, SSE Holdings. Accordingly, we consolidate the financial results of SSE Holdings and report a non-controlling interest on our Condensed Consolidated Statements of Income, representing the portion of net income attributable to the other members of SSE Holdings. The Third Amended and Restated Limited Liability Company Agreement of SSE Holdings provides that holders of LLC Interests may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one-for-one basis. In connection with any redemption or exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in SSE Holdings. The weighted average ownership percentages for the applicable reporting periods are used to attribute net income and other comprehensive income to Shake Shack Inc. and the non-controlling interest holders.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Net income attributable to non-controlling interests | $ | 1,281 | $ | 1,210 | $ | 2,479 | $ | 2,813 | |||||||||||||||||||||
| Percentage of Total revenue | 0.3 | % | 0.3 | % | 0.2 | % | 0.3 | % | |||||||||||||||||||||
Net income attributable to non-controlling interests for the thirteen weeks ended September 30, 2026 increased to $1.3 million versus the same period last year. The increase was primarily due to an increase in net results compared to the same period last year, partially offset by a decrease in the non-controlling interest holders' weighted average ownership, which was 5.6% and 5.7%, respectively for the thirteen weeks ended September 30, 2026 and September 24, 2025.
Net income attributable to non-controlling interests for the thirty-nine weeks ended September 30, 2026 decreased to $2.5 million versus the same period last year. The decrease was primarily due to a decline in net results compared to the same period last year.
34 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
NON-GAAP FINANCIAL MEASURES
To supplement the Condensed Consolidated Financial Statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we use the following non-GAAP financial measures: Restaurant-level profit, Restaurant-level profit margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share (collectively the "non-GAAP financial measures").
Restaurant-Level Profit
Restaurant-level profit is defined as Shack sales less Shack-level operating expenses which include Food and paper costs, Labor and related expenses, Other operating expenses and Occupancy and related expenses.
How This Measure Is Useful
When used in conjunction with GAAP financial measures, Restaurant-level profit and Restaurant-level profit margin are supplemental measures of operating performance that we believe are useful measures to evaluate the performance and profitability of our Shacks. Additionally, Restaurant-level profit and Restaurant-level profit margin are key metrics used internally by our management to develop internal budgets and forecasts, as well as assess the performance of our Shacks relative to budget and against prior periods. It is also used to evaluate team member compensation as it serves as a metric in certain of our performance-based team member bonus arrangements. We believe the presentation of Restaurant-level profit and Restaurant-level profit margin provides investors with a supplemental view of our operating performance that can provide meaningful insights to the underlying operating performance of our Shacks, as these measures depict the operating results that are directly impacted by our Shacks and exclude items that may not be indicative of, or are unrelated to, the ongoing operations of our Shacks. It may also assist investors to evaluate our performance relative to peers of various sizes and maturities and provides greater transparency with respect to how our management evaluates our business, as well as our financial and operational decision-making.
Limitations of the Usefulness of this Measure
Restaurant-level profit and Restaurant-level profit margin may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of Restaurant-level profit and Restaurant-level profit margin is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Restaurant-level profit excludes certain costs, such as General and administrative expenses and Pre-opening costs, which are considered normal, recurring cash operating expenses and are essential to support the operation and development of our Shacks. Therefore, this measure may not provide a complete understanding of the operating results of our Company as a whole and Restaurant-level profit and Restaurant-level profit margin should be reviewed in conjunction with our GAAP financial results. A reconciliation of Restaurant-level profit to Income from operations, the most directly comparable GAAP financial measure, is as follows.
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| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||||
| Income from operations | $ | 21,482 | $ | 18,548 | $ | 39,594 | $ | 43,764 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Licensing revenue | 15,247 | 14,565 | 42,118 | 38,867 | ||||||||||||||||||||||
| Add: | ||||||||||||||||||||||||||
General and administrative expenses | 44,989 | 44,381 | 146,918 | 125,692 | ||||||||||||||||||||||
| Depreciation and amortization expense | 32,930 | 27,079 | 92,767 | 80,167 | ||||||||||||||||||||||
| Pre-opening costs | 6,978 | 4,625 | 20,486 | 12,798 | ||||||||||||||||||||||
Impairments, loss on disposal of assets, and Shack closures | 601 | 510 | 1,893 | 3,448 | ||||||||||||||||||||||
| Restaurant-level profit | $ | 91,733 | $ | 80,578 | $ | 259,540 | $ | 227,002 | ||||||||||||||||||
| Total revenue | $ | 423,273 | $ | 367,411 | $ | 1,207,628 | $ | 1,044,775 | ||||||||||||||||||
| Less: Licensing revenue | 15,247 | 14,565 | 42,118 | 38,867 | ||||||||||||||||||||||
| Shack sales | $ | 408,026 | $ | 352,846 | $ | 1,165,510 | $ | 1,005,908 | ||||||||||||||||||
Restaurant-level profit margin(1) | 22.5 | % | 22.8 | % | 22.3 | % | 22.6 | % | ||||||||||||||||||
(1)As a percentage of Shack sales.
EBITDA and Adjusted EBITDA
EBITDA is defined as Net income before Interest expense (net of interest income), Income tax expense and Depreciation and amortization expense. Adjusted EBITDA 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.
How These Measures Are Useful
When used in conjunction with GAAP financial measures, EBITDA and adjusted EBITDA are supplemental measures of operating performance that we believe are useful measures to facilitate comparisons to historical performance and competitors' operating results. Adjusted EBITDA is a key metric used internally by our management to develop internal budgets and forecasts and also serves as a metric in our performance-based equity incentive programs and certain of our bonus arrangements. We believe presentation of EBITDA and adjusted EBITDA provides investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance.
Limitations of the Usefulness of These Measures
EBITDA and adjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of EBITDA and adjusted EBITDA is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. EBITDA and adjusted EBITDA exclude certain normal recurring expenses. Therefore, these measures may not provide a complete understanding of our performance and should be reviewed in conjunction with our GAAP financial measures. A reconciliation of EBITDA and adjusted EBITDA to Net income, the most directly comparable GAAP measure, is as follows.
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| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
| (dollar amounts in thousands) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||||
| Net income | $ | 17,767 | $ | 13,711 | $ | 34,355 | $ | 36,707 | ||||||||||||||||||
| Depreciation and amortization expense | 32,930 | 27,079 | 92,767 | 80,167 | ||||||||||||||||||||||
| Interest expense, net | 525 | 472 | 1,509 | 1,495 | ||||||||||||||||||||||
| Income tax expense | 5,607 | 7,436 | 11,375 | 14,366 | ||||||||||||||||||||||
| EBITDA | 56,829 | 48,698 | 140,006 | 132,735 | ||||||||||||||||||||||
| Equity-based compensation | 4,995 | 4,423 | 14,077 | 14,173 | ||||||||||||||||||||||
| Amortization of cloud-based software implementation costs | 291 | 510 | 1,334 | 1,676 | ||||||||||||||||||||||
Impairments, loss on disposal of assets, and Shack closures | 601 | 510 | 1,893 | 3,448 | ||||||||||||||||||||||
Executive transition costs(1) | 31 | — | 2,282 | 414 | ||||||||||||||||||||||
Legal settlements(2) | — | — | 848 | 983 | ||||||||||||||||||||||
Restatement costs(3) | — | — | — | 354 | ||||||||||||||||||||||
Other(4) | 47 | — | 520 | 3 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 62,794 | $ | 54,141 | $ | 160,960 | $ | 153,786 | ||||||||||||||||||
Adjusted EBITDA margin(5) | 14.8 % | 14.7 % | 13.3 % | 14.7 % | ||||||||||||||||||||||
(1)Expenses incurred in connection with the termination, search, and hiring of certain executive positions.
(2)Expenses incurred to establish accruals related to the settlements of legal matters.
(3)Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.
(4)Amounts related to the conflict in the Middle East and expenses incurred for professional fees related to non-recurring matters.
(5)Calculated as a percentage of Total revenue, which was $423.3 million and $1,207.6 million for the thirteen and thirty-nine weeks ended September 30, 2026, respectively, and $367.4 million and $1,044.8 million for the thirteen and thirty-nine weeks ended September 24, 2025, respectively.
Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share
Adjusted pro forma net income represents Net income attributable to Shake Shack Inc. assuming the full exchange of all outstanding SSE Holdings, LLC membership interests ("LLC Interests") for shares of Class A common stock, adjusted for certain non-recurring items that we do not believe are directly related to our core operations and may not be indicative of our recurring business operations. Adjusted pro forma earnings per fully exchanged and diluted share is calculated by dividing adjusted pro forma net income by the weighted average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC Interests, after giving effect to the dilutive effect of outstanding equity-based awards.
How These Measures Are Useful
When used in conjunction with GAAP financial measures, adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share are supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to our competitors. By assuming the full exchange of all outstanding LLC Interests, we believe these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income attributable to Shake Shack Inc. driven by increases in our ownership of SSE Holdings, which are unrelated to our operating performance, and excludes items that are non-recurring or may not be indicative of our ongoing operating performance.
Limitations of the Usefulness of These Measures
Adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share should not be considered alternatives to Net income and earnings per share, as determined under GAAP. While these measures are useful in evaluating our performance, they do not account for the earnings attributable to the non-controlling interest holders and therefore do not provide a complete understanding of the Net income attributable to Shake Shack Inc. Adjusted pro forma net income and adjusted pro forma
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earnings per fully exchanged and diluted share should be evaluated in conjunction with our GAAP financial results. A reconciliation of adjusted pro forma net income to Net income attributable to Shake Shack Inc., the most directly comparable GAAP measure, and the computation of adjusted pro forma earnings per fully exchanged and diluted share are set forth below.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| (in thousands, except per share amounts) | September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | |||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||
| Net income attributable to Shake Shack Inc. | $ | 16,486 | $ | 12,501 | $ | 31,876 | $ | 33,894 | |||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
Reallocation of Net income attributable to non-controlling interests from the assumed exchange of LLC Interests(1) | 1,281 | 1,210 | 2,479 | 2,813 | |||||||||||||||||||||||||
Impairment charge and Shack closures(2) | 32 | (44) | 67 | 1,904 | |||||||||||||||||||||||||
Executive transition costs(3) | 31 | — | 2,282 | 414 | |||||||||||||||||||||||||
Legal settlements(4) | — | — | 848 | 983 | |||||||||||||||||||||||||
Restatement costs(5) | — | — | — | 354 | |||||||||||||||||||||||||
Other(6) | 47 | — | 520 | 3 | |||||||||||||||||||||||||
Tax impact of above adjustments(7) | (123) | 2,187 | (1,325) | 1,363 | |||||||||||||||||||||||||
| Adjusted pro forma net income | $ | 17,754 | $ | 15,854 | $ | 36,747 | $ | 41,728 | |||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||
| Weighted average shares of Class A common stock outstanding—diluted | 41,910 | 41,874 | 41,885 | 41,852 | |||||||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
Assumed exchange of weighted average LLC Interests for shares of Class A common stock(1) | 2,400 | 2,437 | 2,420 | 2,443 | |||||||||||||||||||||||||
| Adjusted pro forma fully exchanged weighted average shares of Class A common stock outstanding—diluted | 44,310 | 44,311 | 44,305 | 44,295 | |||||||||||||||||||||||||
| Adjusted pro forma earnings per fully exchanged share—diluted | $ | 0.40 | $ | 0.36 | $ | 0.83 | $ | 0.94 | |||||||||||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
| September 30 2026 | September 24 2025 | September 30 2026 | September 24 2025 | ||||||||||||||||||||||||||
| Earnings per share of Class A common stock—diluted | $ | 0.39 | $ | 0.30 | $ | 0.76 | $ | 0.81 | |||||||||||||||||||||
Assumed exchange of weighted average LLC Interests for shares of Class A common stock(1) | 0.01 | 0.01 | 0.02 | 0.02 | |||||||||||||||||||||||||
Non-GAAP adjustments(8) | — | 0.05 | 0.05 | 0.11 | |||||||||||||||||||||||||
| Adjusted pro forma earnings per fully exchanged share—diluted | $ | 0.40 | $ | 0.36 | $ | 0.83 | $ | 0.94 | |||||||||||||||||||||
(1)Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of the non-controlling interest and recognition of the net income attributable to non-controlling interests.
(2)Expenses incurred related to Shack closures and impairment charges during fiscal 2024 and fiscal 2025.
(3)Expenses incurred in connection with the termination, search, and hiring of certain executive positions.
(4)Expenses incurred to establish accruals related to the settlements of legal matters.
(5)Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K.
(6)Amounts related to the conflict in the Middle East and expenses incurred for professional fees related to non-recurring matters.
(7)Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 24.4% and 25.7% for the thirteen and thirty-nine weeks ended September 30, 2026, respectively, and 24.9% and 23.8% for the thirteen and thirty-nine weeks ended September 24, 2025, respectively. Amounts include provisions for U.S. federal income taxes, certain LLC entity-level taxes and foreign withholding taxes, assuming the highest statutory rates apportioned to each applicable state, local and foreign jurisdiction.
(8)Represents the per share impact of non-GAAP adjustments for each period. Refer to the reconciliation of Adjusted pro forma net income above, for additional information.
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LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash
Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand, and availability under our Revolving Credit Facility. As of September 30, 2026, we maintained a Cash and cash equivalents balance of $319.0 million. In March 2021, we issued 0% Convertible Senior Notes (“Convertible Notes”), and received $243.8 million of proceeds, net of discounts. Refer to Note 6, Debt, in the accompanying Condensed Consolidated Financial Statements, for additional information relating to our long-term debt.
On June 6, 2024, we filed a Registration Statement on Form S-3 with the SEC which permits us to issue a combination of securities described in the prospectus in one or more offerings from time to time. To date, we have not experienced difficulty accessing the capital markets; however, future volatility in the capital markets may affect our ability to access those markets or increase the costs associated with issuing debt or equity instruments.
Our primary requirements for liquidity are to fund our working capital needs, operating and finance lease obligations, capital expenditures and general corporate needs. Our requirements for working capital are generally not significant because our guests pay for their purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payment is due to the supplier of such items. Our ongoing capital expenditures are principally related to opening new Shacks, existing Shack capital investments (both for remodels and maintenance), as well as investments in our corporate technology infrastructure to support our Shack Support Centers, Shake Shack locations, and digital strategy.
In addition, we are obligated to make payments to certain members of SSE Holdings under the Tax Receivable Agreement. As of September 30, 2026, such obligations totaled $245.4 million. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related payments under the Tax Receivable Agreement. Although the amount of any payments that must be made under the Tax Receivable Agreement may be significant, the timing of these payments will vary and will generally be limited to one payment per member per year. The amount of such payments is also limited to the extent we utilize the related deferred tax assets. The payments that we are required to make will generally reduce the amount of overall cash flow that might have otherwise been available to us or to SSE Holdings, but we expect the cash tax savings we will realize from the utilization of the related deferred tax assets to fund the required payments.
We believe our existing cash and cash equivalents balances and cash from operations will be sufficient to fund our operating and finance lease obligations, capital expenditures, Tax Receivable Agreement obligations and working capital needs for at least the next 12 months.
Summary of Cash Flows
The following table presents a summary of our cash flows from operating, investing and financing activities.
| Thirty-Nine Weeks Ended | |||||||||||
| (in thousands) | September 30 2026 | September 24 2025 | |||||||||
| Net cash provided by operating activities | $ | 136,032 | $ | 159,219 | |||||||
| Net cash used in investing activities | (162,405) | (106,697) | |||||||||
| Net cash used in financing activities | (14,741) | (15,479) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (5) | — | |||||||||
| Net increase (decrease) in Cash and cash equivalents | (41,119) | 37,043 | |||||||||
| Cash and cash equivalents at beginning of period | 360,123 | 320,714 | |||||||||
| Cash and cash equivalents at end of period | $ | 319,004 | $ | 357,757 | |||||||
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Operating Activities
For the thirty-nine weeks ended September 30, 2026, net cash provided by operating activities was $136.0 million compared to $159.2 million for the thirty-nine weeks ended September 24, 2025, a decrease of $23.2 million. The decrease was primarily driven by changes in working capital of $42.5 million, partially offset by a $19.3 million improvement in net results after excluding non-cash charges. The changes in working capital primarily included a change in the timing and payments related to general business accruals, mainly related to delivery service providers, an increase in prepaid payments primarily related to software subscription fees, and a change in timing and payments related to general business operations, partially offset by improved collection of receivables as compared to prior period.
Investing Activities
For the thirty-nine weeks ended September 30, 2026, net cash used in investing activities was $162.4 million compared to $106.7 million for the thirty-nine weeks ended September 24, 2025. The change was primarily driven by an increase of $55.7 million of capital expenditures related to our larger development pipeline, compared to the prior year.
Financing Activities
For the thirty-nine weeks ended September 30, 2026, net cash used in financing activities was $14.7 million compared to $15.5 million for the thirty-nine weeks ended September 24, 2025, a decrease of $0.8 million. This decrease was primarily driven by a decrease in withholding taxes related to net settled equity awards, partially offset by an increase in distributions paid to non-controlling interest holders.
Convertible Notes
In March 2021, we issued $250.0 million aggregate principal amount of 0% Convertible Senior Notes due 2028 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933. The Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in certain circumstances. Upon conversion, we pay or deliver, as the case may be, cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at our election. Refer to Note 6, Debt, in the accompanying Condensed Consolidated Financial Statements, for additional information relating to our long-term debt.
Revolving Credit Facility
In August 2019, we entered into a Revolving Credit Facility, which permits borrowings up to $50.0 million, with the ability to increase available borrowings up to an additional $100.0 million, subject to satisfaction of certain conditions. The Revolving Credit Facility also permits the issuance of letters of credit upon our request of up to $15.0 million.
In July 2025, the Company entered into the sixth amendment to the Revolving Credit Facility ("Sixth Amendment"), which, among other things, extends the maturity date until the earlier of (a) February 28, 2028, or (b) the date that is 91 days prior to the scheduled maturity date of any Convertible Notes outstanding at any time.
Outstanding borrowings under the Revolving Credit Facility bear interest at either: (i) the base rate plus applicable margin ranging from 0.0% to 1.5% or (ii) the Secured Overnight Financing Rate (“SOFR”) plus applicable margin ranging from 1.0% to 2.5%, in each case depending on the net lease adjusted leverage ratio. As of September 30, 2026 and December 31, 2025, no amounts were outstanding under the Revolving Credit Facility.
The obligations under the Revolving Credit Facility are secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors. The obligations under the Revolving Credit Facility are guaranteed by each of SSE Holdings' direct and indirect subsidiaries, with certain exceptions.
The Revolving Credit Facility requires us to comply with maximum net lease adjusted leverage and minimum fixed charge coverage ratios, as well as other customary affirmative and negative covenants. As of September 30, 2026, we were in compliance with all covenants.
Contractual Obligations
Material contractual obligations arising in the normal course of business primarily consist of operating and finance lease obligations, long-term debt, liabilities under the Tax Receivable Agreement and purchase obligations. The timing and nature of
40 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
these commitments are expected to have an impact on our liquidity and capital requirements in future periods. Refer to Note 6, Debt and Note 7, Leases, in the accompanying Condensed Consolidated Financial Statements, for additional information relating to our long-term debt and operating and financing leases.
Liabilities under the Tax Receivable Agreement include amounts to be paid to the non-controlling interest holders, assuming we will have sufficient taxable income over the term of the Tax Receivable Agreement to utilize the related tax benefits. Refer to Note 10, Income Taxes, in the accompanying Condensed Consolidated Financial Statements, for additional information relating to our Tax Receivable Agreement and related liabilities.
Purchase obligations include all legally binding contracts, including commitments for the purchase, construction, or remodeling of real estate and facilities, firm minimum commitments for inventory purchases, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts. The majority of our purchase obligations are due within the next 12 months. The Company also enters into long-term, exclusive contracts with certain vendors to supply food, beverages and paper goods, obligating the Company to purchase specified quantities.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our discussion and analysis of our consolidated financial condition and results of operations is based upon the accompanying Condensed Consolidated Financial Statements and notes thereto, which have been prepared in accordance with GAAP. The preparation of the Condensed Consolidated Financial Statements requires us to make estimates, judgments and assumptions, which we believe to be reasonable, based on the information available. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. Variances in the estimates or assumptions used to actual experience could yield materially different accounting results. On an ongoing basis, we evaluate the continued appropriateness of our accounting policies and resulting estimates to make adjustments we consider appropriate under the facts and circumstances. There have been no significant changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Recently Issued Accounting Pronouncements
Refer to Note 2, Summary of Significant Accounting Policies under Part I, Item 1 of this Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes to our exposure to market risks as described in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Item 4. Controls and Procedures.
DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
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Form 10-Q | 41Table of Contents
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes to our internal control over financial reporting that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
42 | Shake Shack Inc. Form 10-Q
Form 10-QTable of Contents
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
The information required by this Item is incorporated by reference to Part I, Item 1, Note 13, Commitments and Contingencies.
Item 1A. Risk Factors.
There have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 5. Other Information.
Rule 10b5-1 Trading Plans
No officer or director adopted terminated
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Item 6. Exhibits.
Exhibit Number | Incorporated by Reference | Filed Herewith | ||||||||||||||||||||||||||||||
| Exhibit Description | Form | Exhibit | Filing Date | |||||||||||||||||||||||||||||
3.1 | Amended and Restated Certificate of Incorporation of Shake Shack Inc., effective February 4, 2015 | 8-K | 3.1 | 2/10/2015 | ||||||||||||||||||||||||||||
3.2 | Second Amended and Restated Bylaws of Shack Shake Inc., dated October 1, 2019 | 8-K | 3.1 | 10/4/2019 | ||||||||||||||||||||||||||||
4.1 | Form of Class A Common Stock Certificate | S-1/A | 4.1 | 1/28/2015 | ||||||||||||||||||||||||||||
10.1 | Employment Agreement, effective as of May 11, 2026, by and among Michelle Hook, Shake Shack Inc., SSE Holdings, LLC, and Shake Shack Enterprises, LLC | 8-K | 10.1 | 5/7/2026 | ||||||||||||||||||||||||||||
31.1 | Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | * | ||||||||||||||||||||||||||||||
31.2 | Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | * | ||||||||||||||||||||||||||||||
32 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | # | ||||||||||||||||||||||||||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document | * | ||||||||||||||||||||||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | * | ||||||||||||||||||||||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | * | ||||||||||||||||||||||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | * | ||||||||||||||||||||||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | * | ||||||||||||||||||||||||||||||
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# Furnished herewith.
44 | Shake Shack Inc. Form 10-Q
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Shake Shack Inc. | ||||||||
| (Registrant) | ||||||||
| Date: November 5, 2026 | By: | /s/ Robert Lynch | ||||||
Robert Lynch | ||||||||
| Chief Executive Officer (Principal Executive Officer and Duly Authorized Officer) | ||||||||
| Date: November 5, 2026 | By: | /s/ Michelle Hook | ||||||
| Michelle Hook | ||||||||
| Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer) | ||||||||
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