10-Q · May 7, 2026
Shake Shack experienced a revenue decline in Q1 2026, reporting $366.7 million, below analyst expectations of $372.1 million. The company also reported a net loss of $0.29 per share, significantly missing the…
Earnings analysis · 10-Q
SHAK earnings analysis
Filed August 5, 2026 · Our reading of the company's report
The latest report
Shake Shack delivered Q2 revenue of $417.618 million, up 17.2% year over year, supported by 3.5% same-Shack sales growth, 27 net system openings and a 34.3% increase in digital sales. Sequential earnings and operating…
Read full summary
Shake Shack delivered Q2 revenue of $417.618 million, up 17.2% year over year, supported by 3.5% same-Shack sales growth, 27 net system openings and a 34.3% increase in digital sales. Sequential earnings and operating margin recovered sharply, but year-over-year profitability weakened: diluted EPS declined from $0.41 to $0.37, operating margin fell from 6.3% to 5.0%, and restaurant-level margin declined from 23.9% to 23.0%. Management attributes the pressure principally to beef and other commodity costs, unfavorable mix, delivery/facilities costs, marketing and development-related spending; it provided no quantitative earnings outlook.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.37
What stood out
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Revenue growth accelerated on unit expansion
Q2 revenue rose 17.2% year over year to $417.618 million and approximately 13.9% sequentially from $366.737 million in Q1. Shack sales increased 17.5% to $403.437 million, with 61 Company-operated openings since the prior-year quarter contributing $47.2 million.
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Traffic and digital sales supported comps
Same-Shack sales increased 3.5%, driven by 2.0% guest-traffic growth and 1.5% price/mix. Digital sales rose 34.3% to $164.5 million and represented 40.8% of Shack sales.
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Profitability recovered sequentially
Diluted EPS rebounded to $0.37 from a $0.01 loss in Q1, although it was below the $0.41 reported in Q2 2025. Operating margin similarly improved sequentially from -0.7% to 5.0%, but trailed the prior-year 6.3%.
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Unit development remained strong
The system added 27 net Shacks during Q2, ending with 703 system-wide locations: 406 Company-operated and 297 licensed. System-wide sales increased 13.8% to $625.8 million.
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Cash reserves support development plan
Liquidity remained substantial, with $308.0 million of cash and no borrowings under the $50.0 million revolving credit facility as of July 1, 2026. Management expects existing cash and operating cash flow to cover requirements for at least 12 months.
What to watch
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Year-over-year operating-margin compression
Despite 17.2% revenue growth, operating income declined 7.3% to $20.746 million and operating margin contracted 130 basis points to 5.0% from 6.3% in Q2 2025. Net income attributable to Shake Shack declined to $15.680 million from $17.148 million.
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Commodity and mix pressure reduced restaurant margin
Restaurant-level profit margin fell 90 basis points to 23.0% from 23.9%. Food and paper costs increased to 28.8% of Shack sales from 28.2%, driven by unfavorable menu mix, marketing promotions and higher commodity costs, mainly beef.
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Development spending drove negative free cash flow
Operating cash flow for the first 26 weeks fell $30.758 million year over year to $65.462 million, while investing cash outflow increased to $104.901 million. Derived free cash flow was negative $39.439 million, reflecting a larger development pipeline and $37.5 million higher capital expenditures.
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International licensing sales remain a headwind
Licensing revenue grew only 7.1% to $14.181 million versus 17.5% Company-operated Shack-sales growth; management cited lower sales at existing international licensed Shacks, primarily in the Middle East. Licensed locations also had 3 permanent closures in Q2.
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Future obligations may constrain cash flexibility
The company had $250.0 million of 0% Convertible Senior Notes due March 1, 2028 and $246.1 million of Tax Receivable Agreement obligations at July 1, 2026. The latter can reduce cash otherwise available, although payments depend on future taxable income and tax-law changes.
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No material risk-factor update
Item 1A states there were no material changes to risk factors disclosed in the 2025 Form 10-K. Accordingly, the filing identifies no newly added or materially revised risk-factor disclosure.
Management's outlook
The 10-Q provides no numerical revenue or EPS outlook. Management states that $308.0 million of cash and cash equivalents plus operating cash flow are expected to fund obligations, capital expenditures, Tax Receivable Agreement obligations and working-capital needs for at least the next 12 months.
Earlier filings 4
10-K · February 26, 2026
Shake Shack’s 2025 10-K emphasizes scaling Company-operated and licensed Shacks (373 Company-operated; 286 licensed; 659 system-wide) while investing in digital, kiosk and multi-format operations. The Company opened 80…
10-Q · July 31, 2025
Shake Shack reported quarterly revenue of $356,466,000 (Q2 — thirteen weeks ended June 25, 2025), up from $316,496,000 year-over-year, with operating income rising to $22,374,000 (operating margin ~6.3%). Diluted EPS…
10-Q · October 31, 2024
Shake Shack reported quarterly revenue of $316,924,000 (up $40,717,000 or ~14.7% versus $276,207,000 a year ago) but swung to an operating loss of $(17,988,000) and diluted EPS of $(0.26) versus $0.19 a year ago.…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.