Shake Shack (SHAK) Baird 2024 Global Consumer, Technology, & Services Conference summary

Business overview and strategic priorities

• Reiterated 2Q and fiscal 2024 guidance, focusing on guest experience and operational consistency.

• Emphasizing high standards across restaurants and in the midst of a COO search to support these goals.

• Improving restaurant margins, with nearly 400 basis points gained over the past years, approaching pre-COVID levels.

• Committed to at least a 10% reduction in pre-open expenses and build costs for 2024, with further improvements expected.

• Investing in people and retention, which has positively impacted both guest experience and profitability.

Leadership and organizational updates

• Rob Lynch joined as CEO on May 20th, coinciding with the opening of the first Pittsburgh location.

• COO search was paused during CEO transition and is now resuming, seeking an experienced operator who fits the culture.

• Over 300 U.S. locations are company-operated, requiring a COO with large-scale operational expertise.

Consumer environment and marketing strategy

• Consumer spending shows pressure on lower-income segments, but the brand over-indexes to higher-income consumers.

• Guidance for 2024 is low single-digit same-store sales growth, with price increases rolling off through the year.

• Promotional activity is targeted and brand-aligned, avoiding deep discounting and focusing on premium positioning.

• Marketing efforts balance value offers with brand awareness, leveraging both own channels and third-party opportunities.

• Incremental promotions have driven profitable new guest traffic and larger check sizes.