Notes from Shake Shack (NYSE:SHAK) Earnings CC (1st Qtr. 2015)

Financials

  • 13 weeks ending 04/01/15
  • revenue grew 56% to 37.8 mm
  • adjusted EBITDA increase of 94% to 7 mm
  • same-store SHAK sales (corporate owned) grew 11%
    • this is versus a 9% same-store sales growth of 9% from last year
  • EPS grew to $0.04
  • licensing revenues grew 13.2% to 1.8 mm this quarter
  • SHAK projects beef prices to remain high thru 2016, but dairy prices have lowered
  • Of the total operating costs, 30.5% is on paper and 25.2% is on labor/employee salaries
    • general operating costs = $18.4 mm
      • $12.8 mm of the operating costs is due to the compensation from the IPO on 01/30/15
  • net loss of $12.7 mm this quarter, but $13.2 mm is due to costs related to the IPO in January
  • projected revenue for 2015 is $161-165 mm

Other Corporate Information

  • strong growth in SHAKs located in Las Vegas, Chicago, Baltimore, and Boston
  • 3 new SHAKs opened in this past quarter (2 in Boston and 1 in Baltimore)
    • Bridgewater (NJ), Orlando (FL), Chicago (IL), Dallas (TX), Skokie (IL) = SHAK’s areas for expansion in 2015
    • Madison Square Park SHAK is being renovated and has been closed since October 2014
      • Other SHAKs located in Manhattan have benefited from the closure of the flagship store
      • when re-opened, the MSP SHAK may “cannibalize” the other Manhattan SHAKs
    • First SHAK in Japan to be opened in Tokyo in 2016
    • 2nd UK SHAK to open in second quarter of 2015
    • 1st California location to open in West Hollywood in late 2015/early 2016
  • In September 2014 and January 2015, SHAK increased the prices of its menu items to due increase in prices of certain commodities (specifically beef)
  • SHAK re-introduced crinkle-cut french fries, a new custard of the week, and shake of the week, all of which were popular and increased sales this quarter
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