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Table of Contents
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
This section and other parts of this Annual Report on Form 10-K (“Form 10-K”) contain forward-looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995, which are subject to risks and uncertainties. Forward-looking statements provide current expectations of future events based on
certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by
words such as "aim," "anticipate," "believe," "estimate," "expect," "forecast," "future," "intend," "outlook," "plan," "potential," "predict," "project," "seek," "may,"
"can," "will," "would," "could," "should," the negatives thereof and other similar expressions. Forward-looking statements are not guarantees of future
performance and actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences
include, but are not limited to, those discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors,” which are incorporated herein by reference.
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in Part II, Item 8 of this Form 10-
K. 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. We undertake no obligation to revise or update any forward-looking
statements for any reason, except as required by law.
OVERVIEW
Shake Shack is a modern day "roadside" burger stand serving a classic American menu of premium burgers, hot dogs, crispy chicken, crinkle-cut fries, shakes,
frozen custard, beer and wine. Our fine dining heritage and commitment to community building, hospitality and the sourcing of premium ingredients have helped
us pioneer what we believe is a new "fine casual" restaurant category. Fine casual couples the ease, value and convenience of fast casual concepts with the high
standards of excellence grounded in fine dining—thoughtful ingredient sourcing and preparation, hospitality and quality.
Our mission is to Stand For Something Good ® in all aspects of our business, including the exceptional team we hire and train, the premium ingredients making up
our menu, our community engagement and the design of our Shacks. Stand For Something Good is a call to action for all of our stakeholders—our team, guests,
communities, suppliers and investors—and we actively invite them all to share in this philosophy with us. This commitment drives our integration into the local
communities in which we operate and fosters a deep and lasting connection with our guests.
FISCAL 2015 HIGHLIGHTS
Fiscal 2015 was a remarkable year for Shake Shack in many ways. We completed an initial public offering of 5,750,000 shares of our Class A common stock and
received $112.3 million in net proceeds, which will provide the capital we need to continue growing our business for years to come. In fiscal 2015 , we opened 13
domestic company-operated Shacks, successfully executing on our targeted growth plan for the year. We entered two new markets this year—Baltimore,
Maryland, in the heart of Inner Harbor, and Austin, Texas at The Domain. We also deepened our roots in our current markets, opening Shacks in New York, New
Jersey, Massachusetts, Illinois, Florida and Nevada. Internationally, we expanded our footprint by opening eight international licensed Shacks in six countries,
including Russia, Kuwait, Qatar, the United Kingdom, and Saudi Arabia, as well as our first Shack in Japan, in Tokyo's renowned Meiji-Jingu Park. In December
2015, we also announced plans to enter South Korea with a new licensed partner with a development agreement that spans 25 Shacks in Korea over the next 10
years.
Fiscal 2015 marked a year of great achievements in menu innovation for us as well. We began a new limited time offering ("LTO") program where we plan to
feature a new premium burger every six months. The ShackMeister Burger launched in January 2015, the first major burger to debut at Shake Shack since the
SmokeShack in April 2012, and was a huge success, driving positive shifts in mix at a premium price point. We retired the ShackMeister Burger in July 2015 and
introduced the Roadside Shack, which was
49 | Shake Shack Inc. Form 10-K