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# Shake Shack Revenue Grows 15.2% — Delivery And Labor Costs Take A Bigger Bite
- URL: https://www.bullished.co/shake-shack-revenue-grows-15-2-delivery-and-labor-costs-take-a-bigger-bite-4ae37c58/
- Published: 2026-11-06T16:42:41.000Z
- Updated: 2026-11-06T16:42:41.000Z
- Description: Traffic rose 0.8%, but restaurant margins narrowed even as lower food costs helped offset spending on labor and delivery.
- Author: Matteo Parrino
- Tags: SEC Filings, SHAK, Industry: Consumer Discretionary

Shake Shack, which operates and licenses burger restaurants, grew third-quarter revenue 15.2% to [$423.3 million](https://www.businesswire.com/news/home/20261105581347/en/Shake-Shack-Announces-Third-Quarter-2026-Financial-Results?ref=bullished.co), but higher labor and operating costs squeezed restaurant margins. The company announced the results Thursday in an [SEC filing](https://www.sec.gov/Archives/edgar/data/0001620533/000162053326000040/shak-20261105.htm?ref=bullished.co).

## More Profit, Less Per Sales Dollar

Restaurant profit reached $91.7 million, up 13.8% from a year earlier. That measure excludes corporate overhead, restaurant pre-opening expenses and certain other costs; as a share of company-operated sales, it fell to [22.5% from 22.8%](https://www.sec.gov/Archives/edgar/data/0001620533/000162053326000040/a3q26shareholderletter.htm?ref=bullished.co), a decline of 0.30 percentage points.

Labor consumed 25.4% of restaurant sales, compared with 24.9% a year earlier, as Shake Shack invested in staffing and the employee experience. Other operating expenses took 16.1%, versus [15.2%](https://finance.yahoo.com/markets/stocks/articles/shake-shack-nyse-shak-reports-120934534.html?ref=bullished.co), primarily because of delivery commissions, spending to attract customers through those channels and faster restaurant expansion.

Food and paper costs provided some relief, falling to 28.3% of restaurant sales from 29.3%. Menu pricing and cheaper commodities helped, with lower bun, chicken and dairy costs offsetting elevated beef costs. Occupancy costs held at 7.7%.

Company-wide operating income increased to $21.5 million from $18.5 million. Net income was [$17.8 million](https://www.sec.gov/Archives/edgar/data/0001620533/000162053326000040/shak-20261105%5Fexhibit991.htm?ref=bullished.co), versus $13.7 million; diluted earnings were $0.39 per share. Adjusted earnings were $0.40 per fully exchanged and diluted share, a measure that assumes outstanding interests in the operating business convert to common stock.

Adjusted earnings before interest, taxes, depreciation and amortization rose [16.0%](https://www.businesswire.com/news/home/20261105581347/en/Shake-Shack-Announces-Third-Quarter-2026-Financial-Results?ref=bullished.co) to $62.8 million. SHAK shares rose about 2% to $71.11 in Friday trading, with a market value of $2.8 billion.

## Digital Orders Bring Traffic And Costs

Sales at company-operated restaurants open for at least 24 full fiscal months rose 2.5% year-over-year, including 0.8% traffic growth. That was Shake Shack’s fifth consecutive quarter of growing traffic and its 23rd consecutive quarter of sales growth at comparable restaurants.

Shake Shack Chief Financial Officer Michelle Hook said, "Both our owned digital channels and third-party delivery are [driving traffic growth](https://www.sec.gov/Archives/edgar/data/0001620533/000162053326000040/a3q26shareholderletter.htm?ref=bullished.co)."

Kiosks, the app and the website accounted for approximately 60% of company-operated sales. Those channels let Shake Shack communicate directly with customers and collect guest data as it develops loyalty and personalized marketing capabilities.

Price and sales mix contributed 1.7% to comparable-sales growth, while gross pricing across channels was approximately 4%. Targeted offers and promotions helped attract customers but reduced the benefit from sales mix. Shake Shack added another 1% to menu prices in October to offset inflation.

## New Restaurants Expand The Sales Base

Company-operated restaurants generated $408.0 million in sales, up 15.6%, while licensing revenue increased 4.7% to $15.3 million. Across both owned and licensed restaurants, sales reached $644.8 million, up 12.8%; licensed restaurants’ sales are not counted as company revenue, which instead includes licensing fees.

Shake Shack sells made-to-order Angus beef burgers, chicken sandwiches, fries and milkshakes through restaurants, digital ordering and delivery. Licensing takes the brand into international markets and U.S. airports, travel plazas and entertainment venues.

The quarter brought 21 company-operated openings and 16 licensed openings, along with two licensed closures. Shake Shack ended the quarter with 427 company-operated restaurants and 311 licensed locations. Average weekly restaurant sales fell 3.8% to $75,000, primarily because newer restaurants still building sales made up a larger share of the business.

For 2026, management forecasts revenue of $1.6 billion–$1.7 billion, net income of $45 million–$55 million and adjusted earnings before interest, taxes, depreciation and amortization of $225 million–$235 million. The outlook rests on preliminary, unaudited information and assumes continued pressure on consumer spending and inflation.

Shake Shack expects 60–65 company-operated openings this year and licensed openings at the high end of its 40–45 range. Planned fourth-quarter licensed debuts include Panama, Vietnam and U.S. regional casinos with PENN Entertainment.

Learn

- [Item 2.02: results of operations →](https://www.bullished.co/learn/8-k-items-explained/#item-202-results-of-operations)  
From 8-K Items Explained: What Every Item Code From 1.01 To 9.01 Tells You, With Examples

### Sources

- [8-K Filing — Shake Shack Inc. (SHAK)](https://www.sec.gov/Archives/edgar/data/0001620533/000162053326000040/shak-20261105.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit shak-20261105\_exhibit991.htm — Shake Shack Inc. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001620533/000162053326000040/shak-20261105%5Fexhibit991.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit a3q26shareholderletter.htm — Shake Shack Inc. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001620533/000162053326000040/a3q26shareholderletter.htm?ref=bullished.co) — SEC EDGAR
- [Shake Shack (NYSE:SHAK) reports sales below analyst estimates in Q3 2026 earnings](https://finance.yahoo.com/markets/stocks/articles/shake-shack-nyse-shak-reports-120934534.html?ref=bullished.co) — Yahoo Finance
- [Shake Shack Announces Third Quarter 2026 Financial Results](https://www.businesswire.com/news/home/20261105581347/en/Shake-Shack-Announces-Third-Quarter-2026-Financial-Results?ref=bullished.co) — businesswire.com