Operations

Shake Shack enjoys robust Q2 earnings, digital boasts double-digit growth

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August 6, 2021

The second quarter of 2021 was a big win for fast casual Shake Shack as the brand saw revenue increase 104%, hitting $187 million, and sales spike 52.7% compared to Q2 of 2020.

The average weekly sales also spiked, hitting $72,000, and that figure has already increased again to $74,000 in July, according to a press release.

CEO Randy Garutti attributes the robust earnings to stronger urban and in-Shack sales.

"We remain on the path toward full sales recovery, with total revenue up over 104% versus the second quarter of 2020. Additionally, even as more of our guests came back to meet us in person, we still grew our digital business double digits and retained approximately 80% of the digital sales versus fiscal January 2021, when digital sales peaked," he said in the release.

He also noted, that in terms of profitability, the Shack level operating margin improved significantly along with sales.

"However do expect margins to moderate in the coming quarters as we make significant investments in our team. Our Shack team members are at the core of all we do and we have committed an additional $10 million in raises, incentives and leadership development over the next year. Our strategic plan centers on the evolution of our Shack formats through physical and digital transformation with the objective of delivering a seamless, elevated guest experience," he said in the release.

Additional financial highlights include:

• Licensed revenue increased 164.2% to $6.0 million versus the same period last year.
• Shack system-wide sales increased 127.7% to $281.9 million, versus the same period last year.
• Operating income was $3.3 million compared to an operating loss of $24.1 million in the same period last year.
• Shack-level operating profit increased 1,699.7% in the second quarter of 2021 versus the same period last year, to $34.8 million, or 19.2% of Shack sales.
• Net income was $2.1 million and adjusted EBITD) was $20.6 million in the second quarter of 2021, compared to a net loss of $18.0 million and adjusted EBITDA of $(8.8) million in the same period last year.
• Net systemwide Shack openings comprised of eight net domestic company-operated Shacks and 10 net licensed Shacks.