Shake Shack Inc. (NYSE:SHAK) reported second-quarter (Q2) results Wednesday, posting adjusted earnings of 43 cents per share, above the 30-cent analyst estimate.

Revenue rose 17.2% to $417.6 million from $356.5 million, exceeding the $417.2 million estimate.

Earnings and Sales Performance

GAAP net income was $16.9 million, down from $18.5 million a year earlier.

Net income attributable to Shake Shack was $15.7 million, or 37 cents per diluted share, compared with $17.1 million, or 41 cents per share.

Adjusted pro forma net income was $18.9 million, compared with $19.5 million.

Shack sales increased 17.5% to $403.4 million, while licensing revenue rose 7.1% to $14.2 million. Systemwide sales grew 13.8% to $625.8 million, and same-Shack sales increased 3.5%.

The company opened 16 company-operated Shacks and 11 licensed Shacks during the quarter. Shake Shack had more than 710 locations systemwide, including about 460 in 35 U.S. states and the District of Columbia and more than 250 international locations.

Restaurant Margins and Costs

Restaurant-level profit increased 12.8% to $92.7 million, while restaurant-level profit margin narrowed to 23% from 23.9%.

Food and paper costs increased to 28.8% of Shack sales from 28.2%, and other operating expenses rose to 15.6% from 14.8%.

Labor and related expenses improved to 25.1% from 25.7%, while occupancy costs remained at 7.5%. Operating income declined to $20.7 million from $22.4 million.

Adjusted EBITDA increased 4% to $61.2 million, though adjusted EBITDA margin fell to 14.7% from 16.5%.

Cash Flow and One-Time Costs

For the first 26 weeks of 2026, operating cash flow declined to $65.5 million from $96.2 million. Capital expenditures totaled $104.9 million.

Cash and cash equivalents were $308 million as of July 1, down $52.2 million from year-end.

Quarterly adjustments included $1.1 million of executive transition costs, $848,000 of legal settlement costs, $425,000 of impairment and Shack closure costs, and $374,000 related to the conflict in the Middle East and professional fees for nonrecurring matters.

Fiscal 2026 Outlook

Shake Shack affirmed fiscal 2026 sales guidance of $1.6 billion to $1.7 billion, compared with the $1.65 billion analyst estimate.

SHAK Stock Price Activity: Shake Shack shares were up 0.24% at $66.35 at the time of publication on Wednesday, according to Benzinga Pro data.

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