Shake Shack (SHAK) Q4 2022 earnings summary

Executive summary

• FY22 revenue rose 21.7% to $900.5M and system-wide sales increased 22.7% to $1.38B; GAAP operating and net losses were $26.9M and $26.0M.

• Shack-level profit grew 26.7% to $151.0M, or 17.4% of Shack sales; Adjusted EBITDA increased 25.8% to $70.5M.

• Q4 ended with high-teens YoY revenue growth, Shack-level margin expansion of 240 bps to 18.8%, and Adjusted EBITDA growth above 55%.

Financial highlights

• FY22 total revenue was $900.5M versus $739.9M; Shack sales were $869.3M, up 21.6%, and licensing revenue was $31.2M, up 25.3%.

• GAAP operating loss widened to $26.9M from $15.9M; net loss was $26.0M versus $10.1M, and diluted loss per share was $0.61 versus $0.22.

• Adjusted EBITDA was $70.5M versus $56.0M; Adjusted EBITDA margin was 7.8% versus 7.6%.

• Operating cash flow was $76.7M versus $58.4M; cash and cash equivalents were $230.5M, with $80.7M in marketable securities at year-end.

Outlook and guidance

• FY23 target: 70–75 new Shacks globally, including ~40 domestic operated openings and at least 10–15 additional drive-thrus.

• Margin recovery remains a priority through sales growth, labor efficiency, kiosk adoption, off-premise profitability, tactical pricing, and supply-chain initiatives.

• Additional 2023 menu price increases beyond the normal pattern were anticipated as inflation warranted, with a risk of weakening consumer demand.

• Kiosks were planned for all domestic operated Shacks by year-end 2023; new Shack builds were expected to remain costly.