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Joining us now at the conference on site is Katie Fogerty, chief financial officer of Shakeshack. Katie, thanks so much for joining us here. Love to get a sense of everybody's talking about Harris and what it might do to economic growth, what it might do to the consumer. Who is the consumer shakescheck, and what is that consumer telling you these days?
Great? So you know who we think of as our consumer. We have you know, went out there and we have this amazing real estate strategy, real estate strategy, and what we've done is we've put these great community gathering places in a lot of these you know, great communities, and where we have attracted is just really kind of more of a I would say, you know, more a middle
income to higher income guests. And we've seen that guest be able to weather a lot more of the economic headwinds than other you know, then the low income consumer has been facing. And you know what we continue to see is by leaning into our strength, which is delivering a fine casual experience. So we think about kind of bringing all those great guts of fine dining, elevated food, premium ingredients, doing the things that you know, other you know, Fast casual and QSR just are not willing to do.
Putting that in an amazing hospital or hospitable environment and getting great guest service. That together has been a winning formula to help us outpunch what has been you know, some consumer headwinds that has been facing the industry, and we are going to continue to lean into that. It's it's helping us to differentiate and kind of pull apart from the pack. And it's it's been our strength. Where are our samples? I know, I mean what is this about?
You know, who doesn't want to burger at ten am on a Wednesday close to open? So who are your competitors then? So if you're a middle and high end consumer, who would you.
Say as a competitor, Yeah, I mean we sell burgers, shakes, fries, I think the best chicken sandwich out there in the business. We view our competitors as being you know, anybody who you know you might consider having lunch at or dinner at. So that is a pretty wide array, and it also can be you know, food at home. I mean that can also be in you know, in an area where
you would have some share of stomach. So you know, for the vast amount of you know, of our restaurants out there, we are competing with a lot of people. Now we are differentiated and we are kind of in that category of one in the fine casual sector. But at the same time we know that, you know, people have lots of different options where they can go out to eat, Katy.
There's a lot of concern out there about inflation. If inflation were to come into your business, where would you see it and how do you plan for that?
So we actually have been navigating through inflationary pressures for a number of years here and doing so quite successfully. I'll say, you know, we've had wage inflationary pressures in COVID. It was actually very hard to get restaurant talent in our restaurants to staff and to deliver our food. It was not a desirable job at the time. And we had we raised wages and had a very competitive and
compelling opportunity for our team members. We also introduced tips as a way to compensate our team members as well and give them added benefit. And then last year with you know, with California Fast Food Wage Act, you know, we faced through that as well. We've also had on the food side, you know, inflationary pressures that have been we've been navigating for a number of years as well.
But through all of this, through leaning in on our strength, which is you know, again delivering that elevated you know, experience to guests, giving them that you know, twenty five dollars, uh, you know black truffle burger that we were actually selling for ten dollars and giving them that great value. On that side, we've been able to both grow sales and grow margins at a faster pace. Just even last year, we expanded our margins in the fourth quarter by three hundred basis points.
So I've never had Shakeshack, but it looked I know, I know, but it looks like I may be able to now in Delta.
Yeah.
So, and this really also goes to your expansion plans. Delta's to offer Shakeshack Burgers on additional domestic roots this year, and that could expand international flights next year. Talk about these expansion kind of plans.
Yeah, I mean, if you look at Delta at its core and what this does, you know, this is an opportunity where we're able to surprise and delight our guests, give them that thing that they weren't really expecting. You know, you have your expectation for what airline food is like, and you know, this this opportunity to get a shake Shack Burger and are great. We have a special brownie that we've made for for Delta as well through this program.
People are just absolutely elated at the opportunity to have that on their flights, and so much so that it's exceeded our internal expectations. We're rolling it out to more airports. You're gonna be able to get it, you know, New York, Atlanta, a number of airports, and that will just you know,
probably continue to grow. And you know, if you look at that opportunity and I can make so many different parallels to how we've gone into an area where the consumer had a certain expt actation and we just really raised the bar on it and out punched above our weight and transformed what people were expecting from you know, it's airline food, if it's roadside food, and across the board, Katie, in terms of growth, how many locations do you have
today and what's your outlook for the next year or two. Yeah, we have you know, across both our company operated and our license business, we're you know, about five hundred and fifty five hundred and seventy locations, but we are growing very fast. We're going to add another forty five domestic company operated shacks this year, and we're going to open about thirty five to forty licensed shacks as well. Those license shacks are ones that we operate, that our partners operate.
We have locations in the US, but most of that is kind of outside of the US and Asia, and we have UK, the Middle East, Mexico, and most recently we opened up in Canada.
Well, great stuff. We really appreciate it. We know you got to run, Katie. Thank you very much. Next time snacks. Katie Boogerty, chief financial Officer at Shake Shack.