This section and other parts of this Quarterly Report on Form 10-Q ("Form 10-Q") contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical fact are forward-looking statements including, but not limited to, statements about our growth, including our long-term growth goals, strategic priorities and initiatives, and liquidity. Forward-looking statements discuss our current expectations, targets and projections relating to our 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," "future," "intend," "likely," "outlook," "potential," "preliminary," "project," "projection," "plan," "seek," "target," "may," "could," "would," "will," "should," "can," "can have," the negatives thereof and other similar expressions. Forward-looking statements reflect our current views with respect to future events and are based on certain assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from trends, plans, or expectations set forth in the forward-looking statement, as set forth in this Form 10-Q. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this Form 10-Q in the context of the risks and uncertainties disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 ("2025 Form 10-K"), our subsequent Quarterly Reports on Form 10-Q, and our other filings with the SEC. The forward-looking statements included in this Form 10-Q are made only as of the date hereof. We undertake 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. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. The following discussion should be read in conjunction with our 2025 Form 10-K, our subsequent Quarterly Reports on Form 10-Q, the Condensed Consolidated Financial Statements and notes thereto included in Part I, Item 1 of this Form 10-Q, and our other filings with the SEC. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years and the associated quarters, months and periods of those fiscal years. OVERVIEW Shake Shack serves elevated versions of American classics using only the best ingredients. We're known for our delicious made-to-order Angus beef burgers, crinkle cut fries, crispy chicken, hand-spun milkshakes, house-made lemonades, and more. With our high-quality food at a great value, warm hospitality, and a commitment to crafting uplifting experiences, Shake Shack has become a cult-brand with widespread appeal. The following definitions apply to these terms as used herein: "Average weekly sales" is calculated by dividing total Shack sales by the number of operating weeks for all Shacks in operation during the period. For Shacks that are not open for the entire period, fractional adjustments are made to the number of operating weeks open such that it corresponds to the period of associated sales. "Same-Shack sales" represents Shack sales for the comparable Shack base, which is defined as the number of Company-operated Shacks open for 24 full fiscal months or longer. For consecutive days that Shacks were temporarily closed, the comparative period was also adjusted. “System-wide sales” is an operating measure and consists of sales from Company-operated Shacks and licensed Shacks. The Company does not recognize the sales from licensed Shacks as revenue. Of these amounts, revenue is limited to licensing revenue based on a percentage of sales from licensed Shacks, as well as certain up-front fees, such as territory fees, opening fees, and termination fees. 26 | Shake Shack Inc. Form 10-Q Table of Contents Key Operating Metrics Same-Shack sales for the thirteen weeks ended July 1, 2026 increased 3.5% compared to the same period last year, driven by a 2.0% increase in guest traffic and a 1.5% increase in price mix. Same-Shack sales for the twenty-six weeks ended July 1, 2026 increased 4.0% compared to the same period last year, driven by a 2.3% increase in price mix and a 1.7% increase in guest traffic. For the purpose of calculating same-Shack sales for the thirteen and twenty-six weeks ended July 1, 2026, Shack sales for 296 Shacks were included in the comparable Shack base. Average weekly sales were $78,000 for the thirteen weeks ended July 1, 2026, which was flat compared to the same period last year, primarily driven by higher menu prices, partially offset by menu mix. Average weekly sales were $75,000 for the twenty-six weeks ended July 1, 2026, which was flat compared to the same period last year, primarily driven by higher menu prices, partially offset by menu mix. System-wide sales for the thirteen weeks ended July 1, 2026 increased 13.8% to $625.8 million compared to the same period last year. System-wide sales for the twenty-six weeks ended July 1, 2026 increased 13.9% to $1,184.1 million compared to the same period last year. Digital sales for the thirteen weeks ended July 1, 2026 increased 34.3% to $164.5 million compared to the same period last year. Digital sales for the twenty-six weeks ended July 1, 2026 increased 27.1% to $305.6 million compared to the same period last year. Digital sales includes orders placed on the Shake Shack app, website and third-party delivery platforms, which represented 40.8% and 40.3%, respectively, of Shack sales during the thirteen and twenty-six weeks ended July 1, 2026. Development Highlights The following tables summarize the Shacks opened and closed during the thirteen and twenty-six weeks ended July 1, 2026. Thirteen Weeks Ended July 1, 2026 Company-operated Licensed System Wide Shack counts at the beginning of period 390 289 679 Openings 16 11 27 Permanent closures — (3) (3) Shack counts at the end of period 406 297 703 Twenty-six Weeks Ended July 1, 2026 Company-operated Licensed System Wide Shack counts at the beginning of period 373 286 659 Openings 33 16 49 Permanent closures — (5) (5) Shack counts at the end of period 406 297 703 Shake Shack Inc. Form 10-Q | 27 RESULTS OF OPERATIONS The following table summarizes our results of operations for the thirteen and twenty-six weeks ended July 1, 2026 and June 25, 2025: Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Shack sales $ 403,437 96.6 % $ 343,224 96.3 % $ 757,484 96.6 % $ 653,062 96.4 % Licensing revenue 14,181 3.4 % 13,242 3.7 % 26,871 3.4 % 24,302 3.6 % TOTAL REVENUE 417,618 100.0 % 356,466 100.0 % 784,355 100.0 % 677,364 100.0 % Shack-level operating expenses(1): Food and paper costs 116,276 28.8 % 96,621 28.2 % 216,299 28.6 % 182,658 28.0 % Labor and related expenses 101,226 25.1 % 88,058 25.7 % 193,943 25.6 % 174,726 26.8 % Other operating expenses 63,118 15.6 % 50,768 14.8 % 120,630 15.9 % 99,030 15.2 % Occupancy and related expenses 30,151 7.5 % 25,593 7.5 % 58,805 7.8 % 50,224 7.7 % General and administrative expenses 48,321 11.6 % 40,671 11.4 % 101,929 13.0 % 81,311 12.0 % Depreciation and amortization expense 30,717 7.4 % 26,545 7.4 % 59,837 7.6 % 53,088 7.8 % Pre-opening costs 6,638 1.6 % 4,955 1.4 % 13,508 1.7 % 8,173 1.2 % Impairments, loss on disposal of assets, and Shack closures 425 0.1 % 881 0.2 % 1,292 0.2 % 2,938 0.4 % TOTAL EXPENSES 396,872 95.0 % 334,092 93.7 % 766,243 97.7 % 652,148 96.3 % INCOME FROM OPERATIONS 20,746 5.0 % 22,374 6.3 % 18,112 2.3 % 25,216 3.7 % Other income, net 2,602 0.6 % 2,850 0.8 % 5,345 0.7 % 5,821 0.9 % Interest expense (553) (0.1) % (548) (0.2) % (1,101) (0.1) % (1,111) (0.2) % INCOME BEFORE INCOME TAXES 22,795 5.5 % 24,676 6.9 % 22,356 2.9 % 29,926 4.4 % Income tax expense 5,913 1.4 % 6,193 1.7 % 5,768 0.7 % 6,930 1.0 % NET INCOME 16,882 4.0 % 18,483 5.2 % 16,588 2.1 % 22,996 3.4 % Less: Net income attributable to non-controlling interests 1,202 0.3 % 1,335 0.4 % 1,198 0.2 % 1,603 0.2 % NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC. $ 15,680 3.8 % $ 17,148 4.8 % $ 15,390 2.0 % $ 21,393 3.2 % (1)As a percentage of Shack sales. Shack Sales Shack sales represent the aggregate sales of food, beverages and Shake Shack branded merchandise at our Company-operated Shacks and gift card breakage income. Shack sales in any period are directly influenced by the number of operating weeks in such period and the total number of open Shacks. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Shack sales $ 403,437 $ 343,224 $ 757,484 $ 653,062 Percentage of Total revenue 96.6 % 96.3 % 96.6 % 96.4 % Dollar change compared to prior year $ 60,213 $ 104,422 Percentage change compared to prior year 17.5 % 16.0 % Shack sales for the thirteen weeks ended July 1, 2026 increased 17.5% to $403.4 million versus the same period last year. The increase was primarily due to the opening of 61 new Company-operated Shacks between June 25, 2025 and July 1, 2026, which contributed $47.2 million, as well as a 3.5% increase in same-Shack sales. 28 | Shake Shack Inc. Form 10-Q Table of Contents Shack sales for the twenty-six weeks ended July 1, 2026 increased 16.0% to $757.5 million versus the same period last year. The increase was primarily due to the opening of 61 new Company-operated Shacks between June 25, 2025 and July 1, 2026, which contributed $76.4 million, as well as a 4.0% increase in same-Shack sales. Licensing Revenue Licensing revenue includes initial territory fees, Shack opening fees, termination fees and ongoing sales-based royalty fees from licensed Shacks. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Licensing revenue $ 14,181 $ 13,242 $ 26,871 $ 24,302 Percentage of Total revenue 3.4 % 3.7 % 3.4 % 3.6 % Dollar change compared to prior year $ 939 $ 2,569 Percentage change compared to prior year 7.1 % 10.6 % Licensing revenue for the thirteen weeks ended July 1, 2026 increased 7.1% to $14.2 million versus the same period last year. The increase was primarily due to the opening of 40 new licensed Shacks between June 25, 2025 and July 1, 2026, which contributed $1.3 million, partially offset by decreased sales at existing international licensed Shacks, primarily in the Middle East. Licensing revenue for the twenty-six weeks ended July 1, 2026 increased 10.6% to $26.9 million versus the same period last year. The increase was primarily due to the opening of 40 new licensed Shacks between June 25, 2025 and July 1, 2026, which contributed $2.2 million. Food and Paper Costs Food and paper costs include the direct costs associated with food, beverage and packaging of our menu items. The components of Food and paper costs are variable by nature, change with sales volume, and are impacted by menu mix, channel mix and fluctuations in commodity costs, as well as geographic scale and proximity. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Food and paper costs $ 116,276 $ 96,621 $ 216,299 $ 182,658 Percentage of Shack sales 28.8 % 28.2 % 28.6 % 28.0 % Dollar change compared to prior year $ 19,655 $ 33,641 Percentage change compared to prior year 20.3 % 18.4 % Food and paper costs for the thirteen weeks ended July 1, 2026 increased 20.3% to $116.3 million versus the same period last year. Food and paper costs for the twenty-six weeks ended July 1, 2026 increased 18.4% to $216.3 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to the opening of 61 new Company-operated Shacks between June 25, 2025 and July 1, 2026, which contributed approximately $14.3 million and $22.9 million, respectively, as well as increased commodity costs, mainly beef. As a percentage of Shack sales, the increases in Food and paper costs for the thirteen and twenty-six weeks ended were primarily driven by unfavorable menu mix and increased commodity costs, mainly beef, and marketing promotions, partially offset by increased menu prices. Shake Shack Inc. Form 10-Q | 29 Table of Contents Labor and Related Expenses Labor and related expenses include Company-operated Shack-level hourly and management wages, bonuses, payroll taxes, equity-based compensation, workers' compensation expense and medical benefits. As we expect with other variable expense items, labor costs should grow as our Shack sales grow. Factors that influence labor costs include minimum wage and payroll tax legislation, health care costs, size and location of the Shack and the performance of our Company-operated Shacks. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Labor and related expenses $ 101,226 $ 88,058 $ 193,943 $ 174,726 Percentage of Shack sales 25.1 % 25.7 % 25.6 % 26.8 % Dollar change compared to prior year $ 13,168 $ 19,217 Percentage change compared to prior year 15.0 % 11.0 % Labor and related expenses for the thirteen weeks ended July 1, 2026 increased 15.0% to $101.2 million versus the same period last year. Labor and related expenses for the twenty-six weeks ended July 1, 2026 increased 11.0% to $193.9 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to the opening of 61 new Company-operated Shacks between June 25, 2025 and July 1, 2026, partially offset by labor efficiencies. As a percentage of Shack sales, the decreases in Labor and related expenses for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to labor efficiencies and sales leverage, partially offset by increased wages and incremental expenses from the opening of 61 new Company-operated Shacks between June 25, 2025 and July 1, 2026 as we accelerate our pipeline and as these Shacks mature. Other Operating Expenses Other operating expenses consist of delivery commissions, Shack-level marketing expenses, repairs and maintenance, utilities and other operating expenses incidental to operating our Company-operated Shacks, such as non-perishable supplies, credit card fees and property insurance. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Other operating expenses $ 63,118 $ 50,768 $ 120,630 $ 99,030 Percentage of Shack sales 15.6 % 14.8 % 15.9 % 15.2 % Dollar change compared to prior year $ 12,350 $ 21,600 Percentage change compared to prior year 24.3 % 21.8 % Other operating expenses for the thirteen weeks ended July 1, 2026 increased 24.3% to $63.1 million versus the same period last year. Other operating expenses for the twenty-six weeks ended July 1, 2026 increased 21.8% to $120.6 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to increased transaction costs associated with higher sales, and increased facilities costs. As a percentage of Shack sales, the increase in Other operating expenses for the thirteen weeks ended July 1, 2026 was primarily due to increased delivery commissions associated with higher delivery sales and increased facilities costs. As a percentage of Shack sales, the increase in Other operating expenses for the twenty-six weeks ended July 1, 2026 was primarily due to increased facilities cost, mainly the timing of repairs and maintenance, and increased transaction costs associated with higher sales. 30 | Shake Shack Inc. Form 10-Q Table of Contents Occupancy and Related Expenses Occupancy and related expenses consist of Shack-level occupancy expenses (including rent, common area expenses and certain local taxes), and exclude occupancy expenses associated with unopened Shacks, which are recorded separately in Pre-opening costs. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Occupancy and related expenses $ 30,151 $ 25,593 $ 58,805 $ 50,224 Percentage of Shack sales 7.5 % 7.5 % 7.8 % 7.7 % Dollar change compared to prior year $ 4,558 $ 8,581 Percentage change compared to prior year 17.8 % 17.1 % Occupancy and related expenses for the thirteen weeks ended July 1, 2026 increased 17.8% to $30.2 million versus the same period last year. Occupancy and related expenses for the twenty-six weeks ended July 1, 2026 increased 17.1% to $58.8 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to the opening of 61 new Company-operated Shacks between June 25, 2025 and July 1, 2026, which contributed approximately $3.2 million and $5.2 million, respectively. As a percentage of Shack sales, Occupancy and related expenses were flat for the thirteen weeks ended July 1, 2026. As a percentage of Shack sales, the increase in Occupancy and related expenses for the twenty-six weeks ended July 1, 2026 was primarily driven by higher common area maintenance charges. General and Administrative Expenses General and administrative expenses consist of costs associated with corporate and administrative functions that support Shack development and operations, as well as equity-based compensation expense. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 General and administrative expenses $ 48,321 $ 40,671 $ 101,929 $ 81,311 Percentage of Total revenue 11.6 % 11.4 % 13.0 % 12.0 % Dollar change compared to prior year $ 7,650 $ 20,618 Percentage change compared to prior year 18.8 % 25.4 % General and administrative expenses for the thirteen weeks ended July 1, 2026 increased 18.8% to $48.3 million versus the same period last year. The increase was primarily due to increased investments in marketing initiatives as well as increased legal costs. As a percentage of Total revenue, the increase in General and administrative expenses for the thirteen weeks ended July 1, 2026 was primarily due to the aforementioned items, partially offset by a reduction in performance-based compensation and forfeitures of equity-based compensation. General and administrative expenses for the twenty-six weeks ended July 1, 2026 increased 25.4% to $101.9 million versus the same period last year. The increase was primarily due to increased investments in marketing initiatives as well as increased wages and other team costs. As a percentage of Total revenue, the increase in General and administrative expenses for the twenty-six weeks ended July 1, 2026 was primarily due to increased investments in marketing and technology initiatives, partially offset by a reduction in performance-based compensation. Shake Shack Inc. Form 10-Q | 31 Table of Contents Depreciation and Amortization Expense Depreciation and amortization expense primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Depreciation and amortization expense $ 30,717 $ 26,545 $ 59,837 $ 53,088 Percentage of Total revenue 7.4 % 7.4 % 7.6 % 7.8 % Dollar change compared to prior year $ 4,172 $ 6,749 Percentage change compared to prior year 15.7 % 12.7 % Depreciation and amortization expense for the thirteen weeks ended July 1, 2026 increased 15.7% to $30.7 million versus the same period last year. Depreciation and amortization expense for the twenty-six weeks ended July 1, 2026 increased 12.7% to $59.8 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to incremental depreciation of capital expenditures related to the opening of 61 new Company-operated Shacks between June 25, 2025 and July 1, 2026. Pre-Opening Costs Pre-opening costs consist primarily of occupancy, manager and team member wages, cookware, travel and lodging costs for our opening training team and other supporting team members, marketing expenses, legal fees and inventory costs incurred prior to the opening of a Company-operated Shack. All such costs incurred prior to the opening of a Company-operated Shack are expensed in the period in which the expense was incurred. Pre-opening costs can fluctuate significantly from period to period, based on the number and timing of Company-operated Shack openings, and the mix of formats we open from period to period. Additionally, Company-operated Shack openings in new geographic markets may initially experience higher pre-opening costs than our established geographic markets, such as the New York City metropolitan area and southern California, where we have greater economies of scale and incur lower travel and lodging costs for our training team. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Pre-opening costs $ 6,638 $ 4,955 $ 13,508 $ 8,173 Percentage of Total revenue 1.6 % 1.4 % 1.7 % 1.2 % Dollar change compared to prior year $ 1,683 $ 5,335 Percentage change compared to prior year 34.0 % 65.3 % Pre-opening costs for the thirteen weeks ended July 1, 2026 increased 34.0% to $6.6 million versus the same period last year. Pre-opening costs for the twenty-six weeks ended July 1, 2026 increased 65.3% to $13.5 million versus the same period last year. The increases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to increased wages and team costs, occupancy costs, and travel and entertainment expense to support our larger development pipeline which includes more Shacks opened during the thirteen and twenty-six weeks ended July 1, 2026 and Shacks under construction compared to the same prior year periods. Impairments, loss on disposal of assets, and Shack closures Impairments, loss on disposal of assets, and Shack closures primarily consists of the net book value of assets that have been retired which primarily consists of furniture, equipment and fixtures that were replaced in the normal course of business; impairment charges related to our long-lived assets, which includes property and equipment, as well as operating and finance lease assets; and miscellaneous Shack closure expenses, including employee-related costs, cleaning, and sign removal costs. 32 | Shake Shack Inc. Form 10-Q Table of Contents Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Impairments, loss on disposal of assets, and Shack closures $ 425 $ 881 $ 1,292 $ 2,938 Percentage of Total revenue 0.1 % 0.2 % 0.2 % 0.4 % Dollar change compared to prior year $ (456) $ (1,646) Percentage change compared to prior year (51.8) % (56.0) % Impairments, loss on disposal of assets, and Shack closures for the thirteen and twenty-six weeks ended July 1, 2026 decreased to $0.4 million and $1.3 million, respectively, versus the same periods last year. The decreases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to the absence of expenses related to the closure of nine Company-operated Shacks in fiscal 2024. Other Income, Net Other income, net consists primarily of interest income, adjustments to liabilities under the Tax Receivable Agreement, dividend income and net unrealized and realized gains and losses from marketable securities. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Other income, net $ 2,602 $ 2,850 $ 5,345 $ 5,821 Percentage of Total revenue 0.6 % 0.8 % 0.7 % 0.9 % Dollar change compared to prior year $ (248) $ (476) Percentage change compared to prior year (8.7) % (8.2) % Other income, net for the thirteen weeks ended July 1, 2026 decreased to $2.6 million versus the same period last year. Other income, net for the twenty-six weeks ended July 1, 2026 decreased to $5.3 million versus the same period last year. The decreases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to lower dividends. Interest Expense Interest expense generally consists of imputed interest related to our financing equipment leases, amortization of deferred financing costs, interest and fees on our Revolving Credit Facility, interest on the current portion of our liabilities under the Tax Receivable Agreement and amortization of debt issuance costs. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Interest expense $ (553) $ (548) $ (1,101) $ (1,111) Percentage of Total revenue (0.1) % (0.2) % (0.1) % (0.2) % Dollar change compared to prior year $ (5) $ 10 Percentage change compared to prior year 0.9 % (0.9) % Interest expense for the thirteen weeks ended July 1, 2026 increased 0.9% to $0.6 million versus the same period last year. The increase for the thirteen weeks ended July 1, 2026 was primarily due to an increase in various sales tax audit assessment charges, partially offset by a decrease in finance lease charges related to new financing equipment leases with lower lease liability balances. Interest expense for the twenty-six weeks ended July 1, 2026 decreased 0.9% to $1.1 million versus the same period last year. The decrease for the twenty-six weeks ended July 1, 2026 was primarily due to a decrease in finance lease charges related to new financing equipment leases with lower lease liability balances, partially offset by an increase in various sales tax audit assessment charges. Shake Shack Inc. Form 10-Q | 33 Table of Contents Income Tax Expense We are the sole managing member of SSE Holdings and, as a result, consolidate the financial results of SSE Holdings. For U.S. federal and certain state and local tax purposes, SSE Holdings is classified as a partnership. Consequently, any taxable income or loss generated by SSE Holdings is passed through to and included in the taxable income or loss of its members, including us, on a pro rata basis. As a result, the Company is subject to U.S. federal income taxes, along with applicable state and local taxes on its allocable share of any taxable income or loss of SSE Holdings. Additionally, the Company is taxed on any standalone income or loss generated by Shake Shack, Inc. The Company is also subject to withholding taxes in certain foreign jurisdictions. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Income tax expense $ 5,913 $ 6,193 $ 5,768 $ 6,930 Percentage of Total revenue 1.4 % 1.7 % 0.7 % 1.0 % Dollar change compared to prior year $ (280) $ (1,162) Percentage change compared to prior year (4.5) % (16.8) % Our effective income tax rates for the thirteen weeks ended July 1, 2026 and June 25, 2025 were 25.9% and 25.1%, respectively. Our effective income tax rates for the twenty-six weeks ended July 1, 2026 and June 25, 2025 were 25.8% and 23.2%, respectively. The increases in the effective income tax rates for the thirteen and twenty-six weeks ended July 1, 2026 were primarily driven by a decrease in forecasted pre-tax income compared to the prior year, including the effects of nondeductible tax items and a nonrecurring deferred tax adjustment recognized in the prior-year period. The Company's ownership interest in SSE Holdings is directly related to its share of the taxable income of SSE Holdings. Our weighted average ownership interest in SSE Holdings was 94.3% for the thirteen and twenty-six weeks ended July 1, 2026 and June 25, 2025. Net Income Attributable to Non-controlling Interests We are the sole managing member of SSE Holdings and have the sole voting power in, and control the management of, SSE Holdings. Accordingly, we consolidate the financial results of SSE Holdings and report a non-controlling interest on our Condensed Consolidated Statements of Income, representing the portion of net income attributable to the other members of SSE Holdings. The Third Amended and Restated Limited Liability Company Agreement of SSE Holdings provides that holders of LLC Interests may, from time to time, require SSE Holdings to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one-for-one basis. In connection with any redemption or exchange, we will receive a corresponding number of LLC Interests, increasing our total ownership interest in SSE Holdings. The weighted average ownership percentages for the applicable reporting periods are used to attribute net income and other comprehensive income to Shake Shack Inc. and the non-controlling interest holders. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Net income attributable to non-controlling interests $ 1,202 $ 1,335 $ 1,198 $ 1,603 Percentage of Total revenue 0.3 % 0.4 % 0.2 % 0.2 % Net income attributable to non-controlling interests for the thirteen and twenty-six weeks ended July 1, 2026 decreased to $1.2 million versus the same periods last year. The decreases for the thirteen and twenty-six weeks ended July 1, 2026 were primarily due to a decline in net results compared to the same periods last year. NON-GAAP FINANCIAL MEASURES To supplement the Condensed Consolidated Financial Statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we use the following non-GAAP financial measures: Restaurant-level profit, Restaurant-level profit margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share (collectively the "non-GAAP financial measures"). 34 | Shake Shack Inc. Form 10-Q Table of Contents Restaurant-Level Profit Restaurant-level profit is defined as Shack sales less Shack-level operating expenses which include Food and paper costs, Labor and related expenses, Other operating expenses and Occupancy and related expenses. How This Measure Is Useful When used in conjunction with GAAP financial measures, Restaurant-level profit and Restaurant-level profit margin are supplemental measures of operating performance that we believe are useful measures to evaluate the performance and profitability of our Shacks. Additionally, Restaurant-level profit and Restaurant-level profit margin are key metrics used internally by our management to develop internal budgets and forecasts, as well as assess the performance of our Shacks relative to budget and against prior periods. It is also used to evaluate team member compensation as it serves as a metric in certain of our performance-based team member bonus arrangements. We believe the presentation of Restaurant-level profit and Restaurant-level profit margin provides investors with a supplemental view of our operating performance that can provide meaningful insights to the underlying operating performance of our Shacks, as these measures depict the operating results that are directly impacted by our Shacks and exclude items that may not be indicative of, or are unrelated to, the ongoing operations of our Shacks. It may also assist investors to evaluate our performance relative to peers of various sizes and maturities and provides greater transparency with respect to how our management evaluates our business, as well as our financial and operational decision-making. Limitations of the Usefulness of this Measure Restaurant-level profit and Restaurant-level profit margin may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of Restaurant-level profit and Restaurant-level profit margin is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Restaurant-level profit excludes certain costs, such as General and administrative expenses and Pre-opening costs, which are considered normal, recurring cash operating expenses and are essential to support the operation and development of our Shacks. Therefore, this measure may not provide a complete understanding of the operating results of our Company as a whole and Restaurant-level profit and Restaurant-level profit margin should be reviewed in conjunction with our GAAP financial results. A reconciliation of Restaurant-level profit to Income from operations, the most directly comparable GAAP financial measure, is as follows. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Income from operations $ 20,746 $ 22,374 $ 18,112 $ 25,216 Less: Licensing revenue 14,181 13,242 26,871 24,302 Add: General and administrative expenses 48,321 40,671 101,929 81,311 Depreciation and amortization expense 30,717 26,545 59,837 53,088 Pre-opening costs 6,638 4,955 13,508 8,173 Impairments, loss on disposal of assets, and Shack closures 425 881 1,292 2,938 Restaurant-level profit $ 92,666 $ 82,184 $ 167,807 $ 146,424 Total revenue $ 417,618 $ 356,466 $ 784,355 $ 677,364 Less: Licensing revenue 14,181 13,242 26,871 24,302 Shack sales $ 403,437 $ 343,224 $ 757,484 $ 653,062 Restaurant-level profit margin(1) 23.0 % 23.9 % 22.2 % 22.4 % (1)As a percentage of Shack sales. Shake Shack Inc. Form 10-Q | 35 Table of Contents EBITDA and Adjusted EBITDA EBITDA is defined as Net income before Interest expense (net of interest income), Income tax expense and Depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA excluding equity-based compensation expense, Impairments, loss on disposal of assets, and Shack closures, amortization of cloud-based software implementation costs, as well as certain non-recurring items that we do not believe directly reflect our core operations and may not be indicative of our recurring business operations. How These Measures Are Useful When used in conjunction with GAAP financial measures, EBITDA and adjusted EBITDA are supplemental measures of operating performance that we believe are useful measures to facilitate comparisons to historical performance and competitors' operating results. Adjusted EBITDA is a key metric used internally by our management to develop internal budgets and forecasts and also serves as a metric in our performance-based equity incentive programs and certain of our bonus arrangements. We believe presentation of EBITDA and adjusted EBITDA provides investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance. Limitations of the Usefulness of These Measures EBITDA and adjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of EBITDA and adjusted EBITDA is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. EBITDA and adjusted EBITDA exclude certain normal recurring expenses. Therefore, these measures may not provide a complete understanding of our performance and should be reviewed in conjunction with our GAAP financial measures. A reconciliation of EBITDA and adjusted EBITDA to Net income, the most directly comparable GAAP measure, is as follows. Thirteen Weeks Ended Twenty-Six Weeks Ended (dollar amounts in thousands) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Net income $ 16,882 $ 18,483 $ 16,588 $ 22,996 Depreciation and amortization expense 30,717 26,545 59,837 53,088 Interest expense, net 468 500 984 1,023 Income tax expense 5,913 6,193 5,768 6,930 EBITDA 53,980 51,721 83,177 84,037 Equity-based compensation 3,922 5,209 9,082 9,750 Amortization of cloud-based software implementation costs 531 560 1,043 1,166 Impairments, loss on disposal of assets, and Shack closures 425 881 1,292 2,938 Executive transition costs(1) 1,121 414 2,251 414 Legal settlements(2) 848 — 848 983 Restatement costs(3) — 100 — 354 Other(4) 374 15 473 3 Adjusted EBITDA $ 61,201 $ 58,900 $ 98,166 $ 99,645 Adjusted EBITDA margin(5) 14.7 % 16.5 % 12.5 % 14.7 % (1)Expenses incurred in connection with the termination, search, and hiring of certain executive positions. (2)Expenses incurred to establish accruals related to the settlements of legal matters. (3)Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K. (4)Amounts related to the conflict in the Middle East and expenses incurred for professional fees related to non-recurring matters. (5)Calculated as a percentage of Total revenue, which was $417.6 million and $784.4 million for the thirteen and twenty-six weeks ended July 1, 2026, respectively, and $356.5 million and $677.4 million for the thirteen and twenty-six weeks ended June 25, 2025, respectively. 36 | Shake Shack Inc. Form 10-Q Table of Contents Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share Adjusted pro forma net income represents Net income attributable to Shake Shack Inc. assuming the full exchange of all outstanding SSE Holdings, LLC membership interests ("LLC Interests") for shares of Class A common stock, adjusted for certain non-recurring items that we do not believe are directly related to our core operations and may not be indicative of our recurring business operations. Adjusted pro forma earnings per fully exchanged and diluted share is calculated by dividing adjusted pro forma net income by the weighted average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC Interests, after giving effect to the dilutive effect of outstanding equity-based awards. How These Measures Are Useful When used in conjunction with GAAP financial measures, adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share are supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to our competitors. By assuming the full exchange of all outstanding LLC Interests, we believe these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income attributable to Shake Shack Inc. driven by increases in our ownership of SSE Holdings, which are unrelated to our operating performance, and excludes items that are non-recurring or may not be indicative of our ongoing operating performance. Limitations of the Usefulness of These Measures Adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share should not be considered alternatives to Net income and earnings per share, as determined under GAAP. While these measures are useful in evaluating our performance, they do not account for the earnings attributable to the non-controlling interest holders and therefore do not provide a complete understanding of the Net income attributable to Shake Shack Inc. Adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share should be evaluated in conjunction with our GAAP financial results. A reconciliation of adjusted pro forma net income to Net income attributable to Shake Shack Inc., the most directly comparable GAAP measure, and the computation of adjusted pro forma earnings per fully exchanged and diluted share are set forth below. Thirteen Weeks Ended Twenty-Six Weeks Ended (in thousands, except per share amounts) July 1 2026 June 25 2025 July 1 2026 June 25 2025 Numerator: Net income attributable to Shake Shack Inc. $ 15,680 $ 17,148 $ 15,390 $ 21,393 Adjustments: Reallocation of Net income attributable to non-controlling interests from the assumed exchange of LLC Interests(1) 1,202 1,335 1,198 1,603 Impairment charge and Shack closures(2) 6 295 35 1,948 Executive transition costs(3) 1,121 414 2,251 414 Legal settlements(4) 848 — 848 983 Restatement costs(5) — 100 — 354 Other(6) 374 15 473 3 Tax impact of above adjustments(7) (326) 169 (1,202) (824) Adjusted pro forma net income $ 18,905 $ 19,476 $ 18,993 $ 25,874 Denominator: Weighted average shares of Class A common stock outstanding—diluted 41,866 41,819 41,873 41,842 Adjustments: Assumed exchange of weighted average LLC Interests for shares of Class A common stock(1) 2,429 2,445 2,431 2,446 Adjusted pro forma fully exchanged weighted average shares of Class A common stock outstanding—diluted 44,295 44,264 44,304 44,288 Adjusted pro forma earnings per fully exchanged share—diluted $ 0.43 $ 0.44 $ 0.43 $ 0.58 Shake Shack Inc. Form 10-Q | 37 Table of Contents Thirteen Weeks Ended Twenty-Six Weeks Ended July 1 2026 June 25 2025 July 1 2026 June 25 2025 Earnings per share of Class A common stock—diluted $ 0.37 $ 0.41 $ 0.37 $ 0.51 Assumed exchange of weighted average LLC Interests for shares of Class A common stock(1) 0.01 0.01 — 0.01 Non-GAAP adjustments(8) 0.05 0.02 0.06 0.06 Adjusted pro forma earnings per fully exchanged share—diluted $ 0.43 $ 0.44 $ 0.43 $ 0.58 (1)Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of the non-controlling interest and recognition of the net income attributable to non-controlling interests. (2)Expenses incurred related to Shack closures and impairment charges during fiscal 2024 and fiscal 2025. (3)Expenses incurred in connection with the termination, search, and hiring of certain executive positions. (4)Expenses incurred to establish accruals related to the settlements of legal matters. (5)Expenses incurred related to the restatement of prior periods in the 2023 Form 10-K. (6)Amounts related to the conflict in the Middle East and expenses incurred for professional fees related to non-recurring matters. (7)Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 24.8% and 26.8% for the thirteen and twenty-six weeks ended July 1, 2026, respectively, and 23.6% and 23.1% for the thirteen and twenty-six weeks ended June 25, 2025, respectively. Amounts include provisions for U.S. federal income taxes, certain LLC entity-level taxes and foreign withholding taxes, assuming the highest statutory rates apportioned to each applicable state, local and foreign jurisdiction. (8)Represents the per share impact of non-GAAP adjustments for each period. Refer to the reconciliation of Adjusted pro forma net income above, for additional information. 38 | Shake Shack Inc. Form 10-Q Table of Contents LIQUIDITY AND CAPITAL RESOURCES Sources and Uses of Cash Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand, and availability under our Revolving Credit Facility. As of July 1, 2026, we maintained a Cash and cash equivalents balance of $308.0 million. In March 2021, we issued 0% Convertible Senior Notes (“Convertible Notes”), and received $243.8 million of proceeds, net of discounts. Refer to Note 6, Debt, in the accompanying Condensed Consolidated Financial Statements, for additional information relating to our long-term debt. On June 6, 2024, we filed a Registration Statement on Form S-3 with the SEC which permits us to issue a combination of securities described in the prospectus in one or more offerings from time to time. To date, we have not experienced difficulty accessing the capital markets; however, future volatility in the capital markets may affect our ability to access those markets or increase the costs associated with issuing debt or equity instruments. Our primary requirements for liquidity are to fund our working capital needs, operating and finance lease obligations, capital expenditures and general corporate needs. Our requirements for working capital are generally not significant because our guests pay for their purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payment is due to the supplier of such items. Our ongoing capital expenditures are principally related to opening new Shacks, existing Shack capital investments (both for remodels and maintenance), as well as investments in our corporate technology infrastructure to support our Shack Support Centers, Shake Shack locations, and digital strategy. In addition, we are obligated to make payments to certain members of SSE Holdings under the Tax Receivable Agreement. As of July 1, 2026, such obligations totaled $246.1 million. Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related payments under the Tax Receivable Agreement. Although the amount of any payments that must be made under the Tax Receivable Agreement may be significant, the timing of these payments will vary and will generally be limited to one payment per member per year. The amount of such payments is also limited to the extent we utilize the related deferred tax assets. The payments that we are required to make will generally reduce the amount of overall cash flow that might have otherwise been available to us or to SSE Holdings, but we expect the cash tax savings we will realize from the utilization of the related deferred tax assets to fund the required payments. We believe our existing cash and cash equivalents balances and cash from operations will be sufficient to fund our operating and finance lease obligations, capital expenditures, Tax Receivable Agreement obligations and working capital needs for at least the next 12 months. Summary of Cash Flows The following table presents a summary of our cash flows from operating, investing and financing activities. Twenty-Six Weeks Ended (in thousands) July 1 2026 June 25 2025 Net cash provided by operating activities $ 65,462 $ 96,220 Net cash used in investing activities (104,901) (67,438) Net cash used in financing activities (12,717) (12,689) Effect of exchange rate changes on cash and cash equivalents (5) (3) Net increase (decrease) in Cash and cash equivalents (52,161) 16,090 Cash and cash equivalents at beginning of period 360,123 320,714 Cash and cash equivalents at end of period $ 307,962 $ 336,804 Shake Shack Inc. Form 10-Q | 39 Table of Contents Operating Activities For the twenty-six weeks ended July 1, 2026, net cash provided by operating activities was $65.5 million compared to $96.2 million for the twenty-six weeks ended June 25, 2025, a decrease of $30.7 million. The decrease was primarily driven by changes in working capital of $36.2 million, partially offset by a $5.5 million improvement in net results after excluding non-cash charges. The changes in working capital primarily included a change in the timing and payments related to general business accruals, mainly related to delivery service providers, and an increase in prepaid rent payments due to the shift of our fiscal calendar, partially offset by a change in the timing and payments related to general business operations. Investing Activities For the twenty-six weeks ended July 1, 2026, net cash used in investing activities was $104.9 million compared to $67.4 million for the twenty-six weeks ended June 25, 2025. The change was primarily driven by an increase of $37.5 million of capital expenditures related to our larger development pipeline, compared to the prior year. Financing Activities For the twenty-six weeks ended July 1, 2026, net cash used in financing activities was $12.7 million, which was flat compared to the same period last year, primarily driven by a decrease in withholding taxes related to net settled equity awards, partially offset by an increase in distributions paid to non-controlling interest holders. Convertible Notes In March 2021, we issued $250.0 million aggregate principal amount of 0% Convertible Senior Notes due 2028 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933. The Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in certain circumstances. Upon conversion, we pay or deliver, as the case may be, cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at our election. Refer to Note 6, Debt, in the accompanying Condensed Consolidated Financial Statements, for additional information relating to our long-term debt. Revolving Credit Facility In August 2019, we entered into a Revolving Credit Facility, which permits borrowings up to $50.0 million, with the ability to increase available borrowings up to an additional $100.0 million, subject to satisfaction of certain conditions. The Revolving Credit Facility also permits the issuance of letters of credit upon our request of up to $15.0 million. In July 2025, the Company entered into the sixth amendment to the Revolving Credit Facility ("Sixth Amendment"), which, among other things, extends the maturity date until the earlier of (a) February 28, 2028, or (b) the date that is 91 days prior to the scheduled maturity date of any Convertible Notes outstanding at any time. Outstanding borrowings under the Revolving Credit Facility bear interest at either: (i) the base rate plus applicable margin ranging from 0.0% to 1.5% or (ii) the Secured Overnight Financing Rate (“SOFR”) plus applicable margin ranging from 1.0% to 2.5%, in each case depending on the net lease adjusted leverage ratio. As of July 1, 2026 and December 31, 2025, no amounts were outstanding under the Revolving Credit Facility. The obligations under the Revolving Credit Facility are secured by a first-priority security interest in substantially all of the assets of SSE Holdings and the guarantors. The obligations under the Revolving Credit Facility are guaranteed by each of SSE Holdings' direct and indirect subsidiaries, with certain exceptions. The Revolving Credit Facility requires us to comply with maximum net lease adjusted leverage and minimum fixed charge coverage ratios, as well as other customary affirmative and negative covenants. As of July 1, 2026, we were in compliance with all covenants. Contractual Obligations Material contractual obligations arising in the normal course of business primarily consist of operating and finance lease obligations, long-term debt, liabilities under the Tax Receivable Agreement and purchase obligations. The timing and nature of these commitments are expected to have an impact on our liquidity and capital requirements in future periods. Refer to Note 6, 40 | Shake Shack Inc. Form 10-Q Table of Contents Debt and Note 7, Leases, in the accompanying Condensed Consolidated Financial Statements, for additional information relating to our long-term debt and operating and financing leases. Liabilities under the Tax Receivable Agreement include amounts to be paid to the non-controlling interest holders, assuming we will have sufficient taxable income over the term of the Tax Receivable Agreement to utilize the related tax benefits. Refer to Note 10, Income Taxes, in the accompanying Condensed Consolidated Financial Statements, for additional information relating to our Tax Receivable Agreement and related liabilities. Purchase obligations include all legally binding contracts, including commitments for the purchase, construction, or remodeling of real estate and facilities, firm minimum commitments for inventory purchases, equipment purchases, marketing-related contracts, software acquisition/license commitments and service contracts. The majority of our purchase obligations are due within the next 12 months. The Company also enters into long-term, exclusive contracts with certain vendors to supply food, beverages and paper goods, obligating the Company to purchase specified quantities. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our discussion and analysis of our consolidated financial condition and results of operations is based upon the accompanying Condensed Consolidated Financial Statements and notes thereto, which have been prepared in accordance with GAAP. The preparation of the Condensed Consolidated Financial Statements requires us to make estimates, judgments and assumptions, which we believe to be reasonable, based on the information available. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. Variances in the estimates or assumptions used to actual experience could yield materially different accounting results. On an ongoing basis, we evaluate the continued appropriateness of our accounting policies and resulting estimates to make adjustments we consider appropriate under the facts and circumstances. There have been no significant changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Recently Issued Accounting Pronouncements Refer to Note 2, Summary of Significant Accounting Policies under Part I, Item 1 of this Form 10-Q.