ICR CONFERENCE JANUARY 9, 2018 1
Cautionary note on forward looking statements This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"), which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different. All statements other than statements of historical fact included in this press release are forward-looking statements, including, but not limited to, expected financial outlook for fiscal 2018, expected Shack openings, expected same- Shack sales growth and trends in the Company’s operations. Forward-looking statements discuss the Company's current expectations and projections relating to their 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," "outlook," "potential," "project," "projection," "plan," "intend," "seek," "may," "could," "would," "will," "should," "can," "can have," "likely," the negatives thereof and other similar expressions. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this presentation in the context of the risks and uncertainties disclosed in the Company’s Annual Report on Form 10 -K for the fiscal year ended December 28, 2016, as amended, and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC"). All of the Company's SEC filings are available online at www.sec.gov, www.shakeshake.com or upon request from Shake Shack Inc. The forward-looking statements included in this presentation are made only as of the date hereof. The Company undertakes 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. 2
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Shake Shack is a growing, loyal, connected community. We are relentlessly focused on excellence, experience and hospitality. 4
Domestic growth delivering increased momentum • Domestic Company-Operated Shacks at Period End 2017 represented a record year with 26 domestic 90 openings • New Market entries included Detroit, San Diego, Milwaukee, St. Louis, 64 Lexington and San Antonio CAGR 47% • Continued market penetration in major existing markets 44 including NYC, DC, Chicago, and LA 31 • Strategic development across 21 multiple formats: urban, free- 13 standing pad and shopping/lifestyle center ’12 ’13 ’14 ’15 ’16 ’17 Note: CAGR is the compounded annual growth rate represented by ’17 in relation to ‘12 5
Photo credit: Zagat 2017 6
Get pic from Matt Meyer - nighttime Rice Village, Houston, TX Troy, MI Troy, MI 7
[INSERT 2017 DOMESTIC OPENING PIC 4] Rice Village, Houston, TX El Segundo, CA 8
[INSERT 2017 DOMESTIC OPENING PIC 4] Rice Village, Houston, TX The Wharf, DC 9
Milwaukee, WI 10 10
STL St. Louis, MO 11 11
Domestic growth delivering increased momentum Domestic Company-Operated Shacks at Period End • 2018 targeted to deliver our 122 - 125 largest class of domestic openings at 32-35 Shacks, although 2H back-weighted • Strength of brand continues to 90 enable premium real estate choices CAGR 46% • 64 Openings will continue to represent a balance between new markets, further 44 penetration of existing markets and with a multi- 31 format strategy 21 • New 2018 markets will include 13 Seattle, Denver, and Charlotte ’12 ’13 ’14 ’15 ’16 ’17 ’18 Note: CAGR is the compounded annual growth rate represented by the maximum of the ’18 range in relation to ‘12 12 12
Denver, CO 13 13
Rice Village, TX 14 14
Seattle, WA 15 15
Diversified and strong licensing growth Licensed Shacks at Period End • Operating globally across 69 12 countries 8 • Capital light, high margin expansion model 10 50 CAGR 54% • 5 Key partnerships with top- 11 40 5 tier international 1 restaurant/retail operators 4 7 32 5 1 5 • 2017 openings across all regions with particularly 19 40 1 strong performance in 33 4 30 Japan and Korea 26 8 14 3 5 ’12 ’13 ’14 ’15 ’16 ’17 Middle East, Turkey, Russia UK Japan, Korea US Note: CAGR is the compounded annual growth rate represented by ’17 in relation to ‘12 16 16
LAX, T3 17 17
M&T Stadium, Baltimore, MD Minute Maid Park, Houston, TX 18 18
Riyadh, KSA 19 19
Cambridge Circus, London, UK 20 20
Goyang, Seoul, Korea 21 21
Roppongi, Tokyo, Japan 22 22
2018 - Significant growth year with focus on Asia Licensed Shacks at Period End 85 - 87 • International brand strength continues to represent significant ongoing expansion 69 opportunity 8 • Most recent partnership with 10 CAGR 49% 50 Maxim’s will see us entering 5 Hong Kong in 2018 and 11 40 5 Shanghai in 2019 1 4 7 32 5 1 • Domestic license strategy 5 focused around major airports 19 40 and sports stadiums 1 33 4 30 26 8 14 3 5 ’14 ’15 ’17 ’16 ’18 ’12 ’13 Middle East, Turkey, Russia UK Japan, Korea US Note: CAGR is the compounded annual growth rate represented by ’the maximum of the ’18 range in relation to ‘12 23 23
Avenues, Bahrain IFC, Hong Kong, China 24 24
Consistently strong financial performance Shack System-wide Sales 1 ($M) Total Revenue ($M) CAGR 49% CAGR 47% $499 $336 $403 $268 $295 $191 $217 $119 $140 $82 $57 $81 ’12 ’13 ’14 ’15 ’16 Q3 ’17 ’12 ’13 ’14 ’15 ’16 Q3 ’17 TTM 2 TTM 2 Adjusted EBITDA 3 ($M) Cash Flow From Operations ($M) CAGR 58% CAGR 46% $61 $68 $50 $54 $37 $41 $15 $13 $14 $12 $13 $8 ’12 ’13 ’14 ’15 ’16 Q3 ’17 ’12 ’13 ’14 ’15 ’16 Q3 ’17 TTM 2 TTM 2 1. See appendix for definition. 2. Represents trailing twelve months (TTM) as of Q3’17 period -end. 3. Adjusted EBITDA is a Non-GAAP measure. Definition and reconciliation of adjusted EBITDA to Net Income, the most directly comparable financial measure presented in accordance with GAAP, is included in the appendix of this presentation. Note: CAGR is the compounded annual growth rate between ’12 and ’16 25 25
Born in NYC; strong nationwide Midwest 1 $4.5M AUV 2 31% SLOP 3 (7) Northeast 1 (32) $3.8M AUV 2 25% SLOP 3 Q3 ‘17 TTM Portfolio 79 Shacks West 1 NYC 1 (10) (16) $4.7M AUV 2 $4.8M AUV 2 $7.2M AUV 2 27% SLOP 3 28% SLOP 3 28% SLOP 3 Southeast 1 (14) $3.5M AUV 2 26% SLOP 3 Note: The above represents the results for the trailing twelve months (TTM) for all Shacks open as of the Q3’ 17 period -end. 1. Regions defined as NYC, which represents 5 boroughs; Northeast, which represents non-NYC NY, CT, DC, DE, MA, MD, NJ, PA, VA; Southeast, which represents FL, GA, TX; Midwest, which represents IL, KY, MI, MN; and West, which represents AZ, CA, NV. 2. See appendix for definition of Average Unit Volumes (AUV). 3. Shack-Level operating profit (SLOP) is a non-GAAP measure. A definition and reconciliation of Shack-level operating profit to operating income is included in the appendix of this presentation. 26 26
Preliminary assessment of tax reform • Reviewing and analyzing the full impact of the bill and will provide tax guidance on Q4 earnings call (Feb ‘18) • Decreased Federal corporate rate will lower our effective tax rate and benefit EPS • Revaluation of Deferred Tax assets & Tax Receivable Agreement liability on the balance sheet will occur in Q4 ‘17 (non-cash P&L charge) • Currently reviewing impact of new rules for Qualified Improvement Property and associated expensing • Use of existing cash will focus on key investments in business infrastructure, digital innovation and quality Shack development 27 27
Digital innovation a key focus & area of investment Experience meets Convenience • iOS app launched Jan ’17; Android Jul ‘17 • Seamless order-to-pickup experience • Encouraging download and retention performance • Average check >15% higher than in- Shack • Increased ability to connect directly with guests • Drive to personalized marketing and app-based promotions 28 28
Digital innovation a key focus & area of investment Astor Place, NYC • Our latest NYC Shack, designed to experiment • Kiosk only, no cashiers with guests supported by hospitality champs • Kiosk experience highly visual and mirrors the app • Cashless environment • Split kitchen allows for greater throughput at peak times • Starting wage $15 per hour 29 29
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