Q2 2020 Shake Shack Inc Earnings Call
Hi, all participants are they listen only mode. A question and answer session will follow the formal presentation. If anyone should require operatorship. During the conference. Please press star zero telephone keypad.
This conference is being recorded I'd now like to turn the conference over to your host Mr., Rick How senior Vice President Finance and Investor Relations.
Thank you door and good evening, everybody joining me to Shake Shack conference call because all C. O one degree C and president and CFO Tavakoli.
During today's call do discuss non-GAAP financial measures, which we believe could be useful in a body weight you helpful.
The presentation of this additional information should not be considered isolation or the substitute results prepared in accordance with.
[noise] reconciliations to comparable GAAP measures are available in our earnings release, the appendix tall supplemental materials.
So what do they statements may be forward looking and actual results may get a maturity just remember risks and uncertainties, including those discussed at our annual report on form 10-K bought in probably the 24 2020.
10-Q, automate the pool Twentytwenty, Oh look as one of the form 8-K business update so called <unk> and into July.
Any forward looking statements represent our views only as of today and we assume no obligation to update any forward looking statements you talk to use change.
By now you should have access to our second quarter Twentytwenty earnings release, which can be found in the best.
Shake shack.
Section. Additionally, we have posted all second quarter, Twentytwenty supplement supporting materials, which we thought any events and presentations section sites.
As an exhibit <unk>.
With that I'll turn the corner Randy.
Thanks, Rick and good evening, everyone. We hope you your families and our entire shake Jackie are all staying healthy I'd say.
It's difficult time I've been incredibly proud of our team. They have continued to show up support each other our guests our community and our suppliers, who had an unwavering commitment to excellence in hospitality in the face of an incredibly challenging operating environment, we owe them a data gratitude and remain committed to their safety wellbeing and I'm going to go.
I'm in a growth in.
The second quarter, we committed to pay an incremental 2.4 million across premium pay guaranteed bonuses and scheduling related premiums to our teams in order to recognize incredibly challenging conditions, they're dealing with every day.
Happy to share that we'll be continuing support our teams in this way in a third quarter.
Moving on to second quarter, Jack Silverdale, 39% compared to last year, well same shack sales declined 49%. However.
Yeah sure continuous improvement through the core sales and you did see it significant impact some temporary shot closures have reduced operating hours the laid a nationwide protest activity.
Oh boy that is in further detail, but given the high growth nature of our business and relative small size of the coffee yet again same shack sales should not be this whole metric on which to understand current business performance.
Total sales and average weekly sales continue to grow.
Fiscal July we saw an 8% increase in average weekly sales compared to the prior period.
Today, approximately 95% of our domestic company operated shacks open and improvements in and roughly 90% open at the time the last earnings call.
Less than half of our shacks are currently operating with interior dining however, a reduction from a few weeks ago. There's some previously reopened in teradata rooms have once again, you the close and we prioritize safety, particularly in high risk States.
Those that are open their operating a limited capacity utilizing outdoor patio seating where available.
Since the beginning of our company we've built some of the world's favorite community gathering places people desire to gather with other people share great food hospitality and the shock experience is a very thing right now most challenged by covert 19.
So much of our real estate put brand has been center.
Thus far in urban office travel and dynamic traffic driving sales environments.
As these are the most impacted restaurants around the globe. That's what do you see in our numbers.
Our suburban shocks toll is slightly different stories that are less acute impact in our urban shocks, achieving a faster recovery and what consistently improving performance across all regions over the last four months.
We continue to believe in the strength of the strategy that has let us the industry, leading or you know deep connection we make with our communities in the meantime, working to improve those shacks most challenged by the current environment doubling down on the places around the country, but we're learning growing and in some case do even better than last year.
We remain fully committed to our long term growth opportunity, which we believe the strong as ever.
Robust real estate pipeline that was pause earlier in the year, we're back in a place where we restarted do shack development.
We've opened for company operated shacks in the first quarter and have successfully opened five shocks a pandemic started the totaled nine opening your day.
We're pleased that this classes open encouraging levels of sales in our so thankful to our team for getting them open during these challenging Todd and working so hard to become an essential part of their new neighborhoods.
Today's ever changing environment, nothing in certain especially the permitting construction and opening of restaurants.
But assuming current conditions persist no major work stoppages getting our way we believe we expect to open between six and 11 additional domestic company operated shacks back weighted towards the end of this year for a total of 15 to 22 the full year.
Golden 19, effectively cuts our development plan and have to this year from our original guidance.
Looking ahead to 2021, we have a strong pipeline of leases were being proactive and opportunistic when it comes a real estate.
Strong balance sheet and a robust multiyear development, while we are aggressively in market looking to benefit from additional opportunities that we expect in a forever changed retail landscape.
You know license business total sales of also shown gradual improvement at approximately 80% of our license shops have now we open.
It's it's definitely returns shack unit growth with the opening of four new license shock since the onset of probably 90.
All shacks right now in Hong Kong mainland, China, Japan, and Korea, the exception of our enjoyed an airport Jack in Korea are now open although in most cases and limited hours in smaller capacity downwards isn't an ever changing situation and even this week, we've seen Hong Kong close and then partially reopened dining rooms again.
Due to recent spike in cases.
In the Middle East the majority of shacks of now reopen the primarily so take out and deliver the slow reopening of dining rooms in the UK approximately half of our shacks every open but we're excited to be testing for new cloud kitchens in various neighborhood due out in London. We just helped offset some sales loss and taught US a lot about this model you get.
Our domestic license business Jackson airports stadiums and roadside remains the hardest hit in our portfolio.
The just half of our airport locations now open.
And operating at severely reduced sales while air travel remains at a fraction of its pretty koby 19 level.
Nearly all of our domestic stadium venues remained close as an example dynamic can quickly evolving environment. Our terminal three location to be L.L.. They actually airport did not reopen the airport has chosen to take this time to tear down and replacing terminal entirely.
As we look ahead continue to build opportunities for growth Worksite did have recently announced the expansion of our existing partnership with magazines caters limited, which targets a development agreement of 15 additional shacks across south China by 2030, including locations in Shenzhen, Guangjo and more disagreement increases development target.
As for mainland China to 55 shocks by 2030 of what you just fiber open at this time, we're really looking forward to continue our grew up in is critical and sizable market.
Moving ahead or menu and product strategies, we've been taken assigned to simplify Herman in order to allow our team to focus on execution.
Temporarily removed some of the most labor intensive items paused LTL and I've been more cautious about new item death.
That said our innovation kitchen is still haven't along we're excited about a few upcoming product initiatives. This fall we plan to bring back hot chicken, a perennial fan favorite well upping the offering this year and adding hot chicken bites and spicy price.
Longer term as we've talked about in the past, we believe we have many opportunities to expand our menu and additional.
Give me with additional vegetarian and began options, we've got a new veggie shack, havent real vegetables, herbs and grains and topped with avocado roasted Tomatoes on a we thought being tested the two shots right now and we hope to expand that test next year.
The grade product something we've been actively tweaking as we solicited guest feedback.
As always we continue to offer rotating beverages and shape such as our current pink lemonade and smaller shape and as we head into the fall we're playing the return of our popular pumpkin and holiday shape.
There's no doubt that this moment is amplified the need and the speed with which we intend to execute our plan in order to return to growth and prepare for strong future.
We've been intentional throughout this crisis to double down on those things that have made shake shack rate and improve those things you know we can do better.
For us that's always med focused on creating an uplifting guest experience crafted one burger at a time.
We've elevated every piece of the traditional Burger experience and now we're focused on adding much greater accessibility convenience and ease of use to that strategy that begins with our real estate selection or shack designs, our digital journey and the expansion of the way our teams guests will experience a shock and indeed, while some of our strongest.
In the country are the hardest hit right now we believe this to be temporary.
Great real estate stand the test Uh huh.
We're excited about the evolution, we have planned to aggressively target a multi format diversified portfolio location that drives under any circumstances.
Can I suppose the progress we've made during covert 19 across digital channels into facilitate more preorders sort of seamless pick up experience here's what we're up to.
We just launched curbside pickup in Iraq.
The first time guests can pure on yeah identify their car and would bring their order out to them with contact was pay in hand.
This is lobbing testing around 10 shacks right now and we expected to be rolled out to possibly 50 checks, but he ended the third quarter. It's really early but we're encouraged by the initial results and convenient this adds for I guess.
Next we're adding shack tracks to both existing and new shacks.
The shock track experience isn't enhanced digital order and pick up solution that includes the ability to order via our web.
Pick up via Curbside walk up window, drybulk window with an improved in shock pick up area.
We ended this year, we'll expect to add at least eight shack truck pickup walkup windows to existing shacks as well as add our first drive up shack track have yet we imagine our Vernon Hills, Illinois Shack would guess will never I believe their car.
2021, we expect roughly half the class to have either you drive up we'll walk up window with the remaining shacks, having a combination of enhanced interior pick up curbside indoor dedicated delivery courier pick up areas.
We're also really excited today to announce when rebuilding our first ever drive through its grants in 2021.
Hope to execute more of these in the future as we learn.
And as you'll see in the initial renderings, we provided in the supplemental deck.
This is not your Robbins dock.
Our design will retain the experience of the great community gathering place that has led our brand for 16 years, while adding the convenience of pre order shack track pick up well then person drive to order.
Not yet announced the initial drive people occasions, but intend to lead with traditional suburban high traffic quarters.
So why are we doing all this the answer is simple as we look ahead. Our goal is to increase the addressable market opportunity for shake shack.
While driving strong maybe even returns on capital.
We're still in the early days for sure I track drive thru and aren't have pickup model and we had a lots of learning from the sales and throughput we're bullish about the potential white space opportunities for not to create while meeting the evolving needs of our path moving.
Moving on the digital.
I guess begin to return the ordering aftershocks of the mix between in check in digital sales will continue to shift during the second quarter total digital sales represented 75% I'll say.
<unk> more than doubled compared to the first quarter of 2020.
Our own native web and App child more than tripled compared to the same period last year and when they've been combine.
Can you to be the fastest growing and largest ordering channels for us throughout Q2 and into July.
For fiscal July digital sales represented 62%. It's also retaining over 90% of the digital sales than we achieved during fiscal may even as in shack sales of gradually return.
In addition, we welcome over 800001st time purchasers near our App and web channels. Since early March. This is nearly four times higher than the same period last year.
We're delighted with these results and we're planning for digital sales were made a significant part of our business and ongoing growth.
As a result, the going down an additional investments that will continue to fuel the guest experience. We launched a number of new features and functionality in response to cover 91 outstanding much of that learning into broader initiatives.
I just spoke about the option, we believe curbside pickup can create now and long term and I'm proud of the quick work. The team did to launch this product will also fully rebuilding our broader webinars functionality over the next year with new and enhanced options that will allow additional personalization of feedback as well as functionality to give guess real time order status among many other.
Features but the most important new feature will be.
Ability to offer delivery directly through our own channels for the first time.
Targeted at keeping guess within our native infrastructure and deepening our ability to connect directly with them overtime.
In addition throughout the next year will be leveraging our improving data inside capabilities along with further guest facing features such as extended payment option gift cards and much more.
Our teams are leaders have use this moment to accelerate the pace of learning and innovation or company.
We're committed to getting after those areas of greatest opportunity as we see them take this time to set ourselves up for a strong future with that I'll turn it over time.
Thanks, Randy and good evening everyone.
The I'd like to reiterate roundys. Thanks, an appreciation to all our teams right now, particularly those in the shack, but also a home office working the nightly everyone. A stepped up such incredible new clients over recent months in support of each other about company as a whole when looking forward to being in personal together again thing in the meantime, Thank you for all you can turn.
Need to do.
Moving onto the result.
As previously shed total revenue for the second quarter was $91.8 million, including Shack sales of 89.5 million license revenue of 2.3 million.
We estimate that shack sales were negatively impacted by approximately $3.2 million due to a nationwide protest and resulting curfews, hoping temporary shack pleasure and reduced operating hours. During the two week average for made a 28 to June 10th.
Same shack sales declined approximately 49% in the second quarter compared to the prior year driven by a decline in traffic at 60.1% and an increase in price mix of 11.1%.
The increase in price mix is driven by 28 with it took an increase in average check as a result of the significant shift into digital channels. We've seen over the last few months, which have historically carries a higher average check than in shock.
In terms of sequential progression of same shack sales throughout the quarter. We were encouraged with the continued improvement.
Year on year decline of 64% and 42% the fiscal April and May respectively, Unstuffy, 9% in fiscal gene when adjusting for the impacts of the protests.
Including the impact of the probably the same shack sales reflective of a decline of 42% in fiscal <unk>.
Same shack sales in fiscal July within 39%, while delivering a further sequential increase in average weekly sales in the period all of which can be seen on page seven of our supplemental materials.
I'll talk about some of the underlying dynamics about sales performance and I'll come back in a moment.
At the end of the second quarter, our trailing 12 month average unit volume was $3.4 million.
The more relevant data points. However, as we gradually rebuilt fail within this code. This 19 environment. Its average weekly sales, which for the second quarter was $45000 with they clearly improving trends right the quota.
Average weekly sales in fiscal July was $56000, representing an increase of only two and a half time average weekly sales at the low point to cope with 19 I break.
The speed at which all businesses recovering deferred generally depending on the location whether that be in relation to the border states. We opening progressed well the extent to which all shacks are located and they typically Dan.
Hi, traffic neighborhood, which many all.
Our up in shacks, which make up half the units and I'll come back accounted for approximately 60% to vote. They fail pre covet 19.
Shanks would continue to be highly impacted by Kevin 19, and what down 57% in the second quarter improving to down approximately 50% the fiscal July.
From a regional perspective, it wasn't making that New York City for the open.
So a shame that same shack sales in fiscal July declined by 56% with Manhattan Shacks, specifically then 65%.
Last quarter, we've included a regional breakdown of comp base performance in our supplemental material and you can see the disparity between regions can be I like that is New York on pages 10 and 11.
The other half about companies shacks are off the bottom shacks with a freestanding or in suburban moves a shopping centers, which represented approximately 40% suppose same shack sales picked up at night seat.
These shacks within 38 defense in the second quarter and predicts is down approximately 24% for fiscal July.
Stocks different in sales performance, it's something we expect to continue to some degree for as long as kind of at 19 continues to impact on 50 oral with is an old travel <unk> recreation and entertainment habit, and it's likely to be particularly treat and telephone larger footprint like New York City, Chicago, Los Angeles, Washington D.C.
Well some of our previous the highest volume shacks, although cases.
We've been encouraged by the initial performance of our Twentytwenty class average weekly sales in fiscal July for all five most recent shack openings were nearly 40% above the company average not there it.
Even in a code at 19 World News shacks opening with strong levels of sale and we believe the return on capital. If it's 20 to 20 class remains healthy.
We had a huge sales opportunity ahead of us and we're committed to capitalizing on that albeit short term sales predictability remains unclear.
Stakes opening up and then regressing is cases like we're focused on remaining flexible in our operations and decision making.
Week to week volatility still a reality, we will not be providing specific sales guidance at this time.
Moving on to shack level operating profit margin, which in the second quarter was 2.2% severely impacted by reduced sales level on a number of exceptional an incremental costs across the business.
In particular for a large part of the second quarter, we experienced significant inflation to be with cost nearly doubled last year, but most of gene.
Beef prices of students returns to more normalized level, but we estimate the spike in beef costs negatively impacted all shack level operating profit by approximately $2.5 million worth 280 basis points during the quarter.
We'll also continue to have significantly higher paper and packaging costs as a percentage of sales with orders package just to go in field bank with additional internal packaging for security.
We estimate this increased level of packaging impact could shack level margins by approximately $1.4 million or 160 basis points in the quarter and will continue for such time as we remain in a heightened cobot 19 risk environment.
In terms of labor or priorities remain safety for our team for okay.
As we adhere to social different thing another safety critical as well as limited capacity going Oh label, a labor costs will continue to show some inefficiency compared to prior level.
In addition, as recognition and graph that you talk teams in the field, we chose to pay 10% premium to hourly team members on top of their existing hourly rate I know theres guaranteed thing shack managers and the second quarter.
Currently in the third quarter, we've extended this premium pay and guaranteed manager bonuses and we'll be continuing continually evaluating this during this time.
Well I didn't catch in the second quarter of a heightened levels of payment from Merrill Lynch use the far work week in relation to scheduling changes hourly team members.
Taking all these incremental payroll like them together they represent that additional cost the $2.4 million in the quarter with an impact 270 basis points would shack level margin.
In addition, we also continue to pay 100 preventable health benefit benefit premiums with other employees.
We greatly appreciate the sacrifice it all teams and making throughout this whole pandemic and are committed to continuing to support them any way possible.
Finally, our other operating expenses in the second quarter was 16% of shack sales driven by higher delivery commissions due to mix, but also due to step up in blended commission rate in our expanded multipart arrangement.
We continue to operate with consistent menu pricing on our end channels and third party marketplaces and may revisit that at some point going forward in order to improve the profitability of this delivery channel.
We will take time to offer delivery through our own channels in the future and while this will still come with a cost it will provide us with greater flexibility and I'll ever pricing in marketing strategies for delivery.
I find the delivery impacting the quarter other operating expenses de leveraged compared to the same period last year due to lower levels of sale.
Despite these increased costs, we were pleased with underlying improvements in shack level operating profit margin as the quarter progress.
Low points in shack level operating margin within its school April at negative 11%.
This improved to positive 7% I'm told that the 5% its fiscal May and June respectively.
I have a June was the periods in which we feel the most acute impact from beef inflation additional labor costs and the impact of protest activity on sale.
Taking these into consideration we would have seen further sequential improvements in shack level operating profit exiting the quarter.
Moving on to DNA social channels. The second quarter was $14 million, then included 1.6 million related to non cash items.
Additionally, we incurred higher professional fees of approximately $250000 relate to see April equity offering and the implementation of Kazakhs, which we expect to continue in the third quarter.
At the beginning of the Koetje given the significant impact it kind of at 19, we quickly cutback spend in many areas, including furthering home office employees capping discretionary spend pausing investment in the majority of our strategic growth initiatives.
A sales performance has continued to improve and with a strong balance sheet. We commenced investment spend during the second quarter across a number of key areas.
He is predominantly sensor around don't digital innovation initiatives, but also includes critical growth areas in design and development among others.
While we maintain high levels of cost diligence across the business.
We do expect all gnh sequentially, increasing the second half of <unk> and reach more normalized levels by the end of the in support of all continued recovery.
On an adjusted pro forma basis, where the net loss of $18.3 million.45, before they exchanged and diluted share.
We estimate an approximate 11 cents impact on E. P S and the quarter due to the exceptional costs related to beef packaging and labor as mentioned earlier.
In addition, there was an additional two cents on favorable tax impact from a top kinda stock compensation related adjustment.
I would like effective tax rate was 27.8 cents a reconciliation to GAAP tax rate increases in the appendix of a supplemental materials and finally, we're continuing to evaluate tax and other regulatory changes well recently enacted related to Kazakh.
These retroactively changed the recovery period qualified investment property, which enables the cost of all leasehold improvements to be 100% eligible for bonus depreciation as opposed to the 39, yet there is enacted the tax reform.
Moving on to cash on cash and marketable securities balance at the end of the quarter with $190.8 million.
We repaid the $50 million, we had previously drawn down more revolving credit facility and so they remain fully available to us if needed.
In terms of cash burn at current sales level cash flows positive at the shack level and continues to improve a sales growth business recover.
At the enterprise level weekly cash that has also improved to approximately $100000 per week, excluding the temporary pay increase and guaranteed benefits. The shack team a new shack capital expenditure. This cash burn increased DNA at current levels.
As we look at all financial result, the sequential sales and profitability improvement Oh strong digital performance or investment priorities and accompanying would best balance sheet. We're confident in all future. What lies ahead, we believe it as we fully executed with 19 whenever that may ultimately be the return metrics of all shacks remain robust and compare.
In the meantime, we will continue to proactively embedded in both safety practical and support and recognition of our team as we navigate the journey through a night the other side that's kind of in 19.
Randy back to you.
Thanks Dara.
Despite this being one of the most challenging environments any of us could have ever imagine we're moving forward with confidence the team is looking out for each other our business is gradually working towards recovery along with the rest of our country.
And we're excited about the progress being made across the key strategic growth areas of our company.
We entered this crisis with tremendous momentum and the position of strength our balance sheet. Today is now stronger than it's ever been and we will come out at this moment with an unmatched resolve and determination to grow again and improve the lives of our team along the way.
Cities recover and people ultimately gather again.
Well position to capitalize on the many opportunities that lie ahead in the meantime, we'll continue to use the moment has one for learner, we're testing and innovation ensuring that we come out of this crisis, even stronger than how we entered it till then hope you'll stay safe and stay healthy.
With that operator, please open up the call for questions. Thanks.
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A question.
[noise] My first question comes from the line up Sharon.
With William Blair You May proceed with your question.
Hi, good afternoon, good try and the name.
Thanks for all detailing and Hank.
Hi, Congratulations on on you know pivoting a lot and the current environment I guess I'm sure a lot of the other questions are gonna be as someone asked about cloud kitchens I was actually pretty curious it all that led to that decision and the UK I know that have very different delivery architecture, there, but are there applicable.
Elements, there that might make sense as all do you think about.
<unk>.
Yeah, maybe so I mean, it's not something we're focused on we haven't really bad where we're really much more focused on shock truck and taking our current shots and obviously are the ones with capacity right now more than ever and making sure. We can easy access for all channels at our current Jack in the UK. It was this it for the UK comply.
We shut down Okay, and <unk> you know, we support our partners and the test and things that they want to try as long as we think it's great for the business overall, what's been cool about artisan in London, and sorry, one other back you know the way that UK boards have worked with landlords and paying rent to.
Sort of things you got to be sure you can kind of recover in order to make it work, while opening a little bit different structure. There. So you got the team aggressive they've got to be thinking about what else. They could do to recapture some of that lost sales what it did but the fourth we have been sent us two different neighborhoods. So it was that one.
Tom a sales you know saving.
Let's figure and as and at another time, a test of new neighborhoods. That's the kind of learning, we Wanna get too, especially in urban centers as we think about our ability to drive deeper overtime and let's remember we only have 72 shakes out to be able to this country and the U.S.. We got a long way to go we got a long way to go in London. So.
Yeah, not our top focus today, but we love working with our partners to get the learning, we can and we'll see where it goes from here. Thanks.
Okay. Thank you.
Our next question comes from the line of Josh with Piper Sir You May proceed with your question [noise].
Great. Thanks for taking the question [laughter] wanted to see if you could dive into some of the items you alluded to in terms of helping out those shock sort of been most impacted.
I'm curious on kind of how that's evolved.
Ah, Yes, first quarter going to second quarter and that now as some of the markets have started to close back down again, just what you've been able to do and what you found most impactful.
Well you know this is this goes there where we started at the beginning you're talking about our teams I mean, it's been incredible to pivot that we made you go back to March it seems both like yesterday and 100 years ago, right, where we were immediately slipping towards stay at home orders, taking orders outside change into these pop up drive.
As we've been able to shift a lot of that now to more of a better understanding more contact was our shacks before at the beginning of this we didn't have that immediately ready now we've got it.
Really making sure our outdoor patios, we have over 80% of our shops have the opportunity for some type of outdoor patio seating.
We're lucky you know as part of our real estate strategy, even in the hardest hit areas, where next to parts were next to places where people can gather so it's been really about making sure. We can improve the access convenience then we sort of do some really fun I'm you know brand marketing we've done shot cap.
For our families at home this summer Weve continue to engage with our guess, it's been really fun for us and as we've said you know I hope you caught some of those notes, where we had 800000 new users on our out channels that is a huge number for a small companies like ours on top of only 172 restaurant.
That's a huge we're going to capitalize on that so the digital initiatives the opportunity to drive digital engagement is huge and as we look ahead you look at kind of a first product where we've kind of gone you know purposely slimmer on product now we're going to start to expand that as we head into the fall with our chicken I think got to be a good opportunity to hopefully drive some.
Sales, but just what the.
Neighborhoods are impacted their impacted you know there's not a lot. We can do on 44th Street in eighth Avenue with Broadway shut down with tourism shutdown in New York City, one of our best restaurants in the World Our theater district location. It today, one of our lowest performing I mean to think that that could have ever happen.
It's crazy right, there's not a lot you can do what make it great every time with every guest you have in that restaurant and as things recover we fully expect it to recover but the impact to your easier seamless you know the lag in our numbers.
That you're seeing is really a do that urban suburban breakdown.
And the kind of shacks that we've built over the years that have been our sweet spot as our brand and will be again, certainly but in the meantime, there that's all for a comeback, but we'll get there werent deep learning and drive.
Our next question comes from the line of Jared.
You May proceed with your question.
Hi, Thanks for taking my question today.
Really cool renderings of B.
Drive through locations essentially work here I just wanted to get a sense of how you think about that long term. It's just something that you know it's going to be a major focus for the brand as we continue to see new units go up and then I also want.
Got a little bit of an understanding about how you're thinking about the sort of the unit level economics.
These locations versus your turtle sort of 33 million to about 20% margin figures.
Well look our goal I'll start with the second part of your question, our as I said am I know, it's our goal.
Always is to increase the addressable market for shakes out <unk> as well as drive those long term value views and profits and returns on capital that this company has been known for since day, one it's too early to comment on what those numbers are gonna look like we'll let you know as we before our hope is that we create access in places where we may now.
Got it that access before and we create opportunity in real estate that we may not have had before and you know we're really excited about if you look at that rendering you know these are evolving thing we've got our sites on a.
Our sites on a few locations that we think we can execute but we'll see I think initially it'll be a smaller part of our portfolio, where we'll be leaning more into shack track, both drive up and pick up for preordering on yet.
Because we think that digital engagement, we've created is gonna be sticky, but we'll see you know I think one other things that we've learned overtime and you see it certainly now you're lucky in the moment of safety people want to stay in their cars, that's not going to last forever, but obviously this country that's proven that drive through its.
Old form works, we want to doing this newborn we want to do it better than ever with an experience that you say you drive through whichever you want and it's everything said Jack has always been a modern version of that old roadside community gathering place.
Thank you.
Our next question comes from.
Well.
With credit Suisse. You May proceed with your question.
Just a quick follow up any other quite a prior question are you Rethinking your unit development pipeline at all over that period three years in terms of work, where you'll look to grow and then my actual question that you've talked a lot about your holistic approach to digital across the business. We've seen a large number of restaurant companies want.
Well he program recently to complement their digital strategies. So how are you thinking about loyalty and your thoughts about as you've been tracking more customers into the digital ecosystem.
Oh, a I'll take the first part of a topic the loyalty and digital part along we've always had a multi format approach I think what this does it accelerate and amplifies our desire to get as many sites as we can that meet all those goals that also have accessibility you know look we still have.
A number of fantastic side, given an urban Manhattan or that we hope to do in the near future.
So we were going to keep doing those there are many great cities in this country that we've talked a bit and you get in many that are we can go a lot deeper in in both urban and suburban and look we fundamentally believe that real estate great real estate is great real estate, there's no question that hurts us today.
Or just more than others that are just drive thru and suburban atmospheres, and you're seeing a but we know that that'll come back right that will come back and that's important for us to continue to build a diverse portfolio that can sustain all of those so as you look at next year as I said.
Roughly a quarter of the class should have a a walk up shack truck window, roughly a quarter that class should have a drive up shack track window for preordering, we'll throw a well test our first drive through in there and the rest will be similar shack experiences that you've known.
Which just continue to enhance curbside pickup.
And the pickup experience to add new conveniences to the way that the shack is still continue to be we're gonna. We're gonna do you need to be that Tara.
Yeah, and then he learned.
So we have no plan today to launch a any sort of formal loyalty program, but I would say what underpins loyalty program in terms of its objectives.
Whether they whether that be if I knew guess acquisition or more typically iran, driving increased retention and frequency sometimes average spend it looks so all these different types of component, but it typically a loyalty program is trying to achieve or absolutely possible.
I bought a digital strategy and boxing and text develop a plan.
Well just in that we're in a position today, what we're really in the Grand scheme of things will they digital has been a priority for us. So a couple of years now we feel that you relatively early in that journey and I think as you can see from some of the things that would just launching and so behind the scenes behind things like <unk> sites.
Or ultimately delivery city and or will you know as makes bundle payment options behind the scenes. We're also working very hard cute further build <unk> and in some cases upgrade all digital infrastructure. So that we can build a more holistic view is that go on and as we talked about before then ultimately go another kind of dates it in.
Like from that holistic view in that single view of the guest but open more importantly builds a more engaging dynamic personal relationship with them. So I think no to the formal loyalty program, but absolutely yes in terms of the types of functionality, but we're putting into these pull that drives the same.
Type of bank comes with a loyalty program ultimately would.
Thanks, so much.
Our next question comes from the line.
<unk> with Suntrust. You May proceed with your question.
Our next question comes from the line of John Glass with Morgan Stanley. You May proceed with your question.
Thanks, perhaps two unrelated questions, but one is what is the percentage of your so it's actually consumed off premise now a lot of brands sort of realized in hindsight, well, you've got a dining room, but really actually very few people are using it relative to the size of it so.
One is what did that often it's mix in total people walking eligibles delivery and all the other things do you think that on average the shock sizes could come down over time as a result, I know, there's a lot of different formats, but it's not a goal or not really and then just the unrelated part as you added some aggregators this quarter I just wonder if that's Gotta result, you hope to.
We did it expand delivery any any comments on home delivery stood.
And your second quarter since that was such a heavy delivery quarter for the consumer.
Yeah, so as a percentage of sales John the most recent data that we shared P. seven was 62% of orders happening digitally. Okay that includes our channels the biggest and most of our biggest growing channel as well as delivery channels now of the people who order of the remaining 38%.
Lot of Im still take it to go so we haven't shared that exact number but the vast vast majority are taking it to go where you know even noted in the notes just about only half of our shacks, even have some kind of dining room continuing to be open and that and we were we were well on that roads reopening dining rooms, as many others work but.
It's harder hit States like California, Texas, Florida, We also pull back and we're gonna we're going to take on time on that we're not going to put our teams in danger unnecessarily.
More guests and we want to make sure when we open and we feel like it's a it can be a in a place that that makes sense. So vast majority of people happening off site right now and we can't wait to get them back and I know they can't wait to get back to.
Your second question on check size that nothing's gonna be all the above a there'd be some that are the current.
Larger shack side, and we do continue to target, especially as we think about somebody's urban locations for the future that can be smaller that can really lean into this new and improved digital architecture here, where people are taking it to go and and so many of urban shacks always had a higher percentage of to go then the suburban shack.
Anyway. So I think we can we can look at it that way and possibly benefit from there not to be balanced out by the pool experience checks that we will continue to build in the portfolio on delivery.
Yeah, I think the answer is yes to certainly has had an impact we have great relationships with all the major delivery carriers really excited with the growth. Most released recently of overreach were but we're excited with what that's going I think.
<unk> as in check has come.
Does come up.
And our own channels continue to grow delivery will likely settle in a very comfortable place still much more elevated than it ever was and we're excited about that but I want to also note that we mentioned that we are working through delivery in our own up and we hope that we can continue to build that channel.
Great growth and keeping people in our infrastructure over time so.
Lots of that lots of relationships to go to be answered to see how the delivery world continues to to go as as it's a pandemic and beyond goes thanks John.
Our next question comes from the line of Jake Bartlett with Suntrust. You May proceed with your question.
Great. Thanks can you hear me now.
Well.
Good good alright, so I'll try to make a quick you. My my my first question really is on on on Dine in you being offered you mentioned it was less than 50% of the system is that could you give us the percentage on bet. It's open in suburban checks versus the urban shacks and also in that context, maybe you know how would this.
Sales at the stores that have Jining open performing your relative to your overall same store sales and then my second question you know sorry, Oh, that's the second after a few up your research go ahead go to get good Oh, Okay. The second one is just on development going forward in in the I'm wondering you know if it's fair to kind of.
Assume that the the stores are slipping out of 2020, I'm, you've talked about a being confident in the real estate pipeline, but you should we assume that that basically kind of layered what we would have happened in 20 into 21 or are there any constraints like like like labor or or any other constraints that.
It should kind of caution us away from assuming you kind of feel not double up quite what kind of make up for the loss development in 2021.
Okay. So I'm on the dine in and we haven't really broken out whether suburban to urban dine in works better or or or worse. I think that really is a shock by shack conversation again with us being still not having that many units. It's really regionally based more than suburban urban look if you go around New York City right now.
You're not meeting inside any of our shacks. There are only opened outside that impacts US right. If it's at 95, a you know degree July day in New York City that impacts us.
But some of our suburban shacks that have opened do quite well and to your second part of your question, Yes, generally as we reopened dining room that benefit sales yeah that is a direct correlation for us I. So as we've had to revert to some closures there would be seven that's harder right that you see that slowed.
During the recovery.
And we'll see this is something that is unknown, we're going to take our time as development did you look forward. You know look we do not expect to do the lost 2020, plus a full class of 2021, we're working on what we believe will be appropriate class for 2021, and what gets underway.
It's pretty straight answer the uncertainty of covered and making sure that we can continue to execute I'm not the real estate there, but we've also you know we've also got to make sure. We're rebuilding we've got to make sure we're staffing.
<unk>, it's a it's a time, where you have a lot of people want employed you have a lot of people shifting how they want to work and we really do need to get pass. This over time that said we are committed to openings were committed to continue to higher and provide those development opportunities for our team that we always have so no guidance that on 2020.
One four yeah, Jake still Clos that needs to come together and it's a world.
That needs to come together, so well keep you posted all that goes I I told recovery goes I.
I think we'll we'll we'll try to capitalize on as you can.
Our next question comes on line of Don.
Morgan you May proceed with your question.
Hi, Thank you I to related ones, if I may Terra in your prepared remarks, you kind of your top 10, a comment around the you're looking at pricing for delivery and you know when I do you Wonder if you know if if that potential pricing could be used to potentially fully offset the cost of delivery, making it more or less profit neutral to the in store transaction. That's the first question.
Then secondly, you did mention second some data and analytics to be rolled out in 21, what are the benefits that you can see the near term and 21, Yeah from you know this new program or the functionality in that year that your that you haven't gotten either this year in and around the pass it could potentially change your trajectory. Thank you.
Hey, John at well, we're actually really pleased about trajectory when it comes to that so I mean, some of those that we gave you on the cool with.
Retained 90% of the Highpoint tool the ER.
Quadrupling of New uses for example on year on year basis, what we're really excited.
But this momentum continues in such force as it relates to delivery pricing Yeah. I mean, we mentioned that they plan today or to increase our prices will change up prices in the delivery channel, but it remains you know it remains something that we look at remains something that is an option to Ah Ah on a go forward basis.
And it's something that you know we may consider at some point in time I believe when the minority in terms of restaurants here and you know or have some sort of pricing differential, but well see a it's it's good because I have that optionality and I think really we will look at it.
In totality, and then with a broader lens as we bring delivery into our own channels. For example, and then think banks it really within that context. So you know there's a there's a lot of program or when it comes to a little bit delivery will that additional initiatives, but across the board outside of just deliberate and.
I apologize, if if I miss heard or I misspoke separating digital what's very clear that you are doing a very good job with but I thought I heard something around data and analytics and 21, maybe I didnt, maybe I didn't hear that are heard that on a previous conference call I'm not sure.
But you can you kind of talk about the data and analytic side of your business in terms of your understanding some of that digital understanding some of that customer you how to get your customer instead of you can see more frequently are broaden that customer base or have that customer you spend more what have you mean, it did I hear correctly that that is a.
New functionality that may be coming in 21, and if I didn't miss here that just comment on that broadly speaking. Thank yet no I I don't know I didn't think I mentioned that specifically in my prepared remarks, but you certainly heard me talk about data and insights many times before and so I I you know not show that we got a a light switch that's about to be.
Slips at any point today on 2021, as we look at the vast amounts of development and innovation that's going on across the company right now in the did so I'm kind of ecosystem behind the scenes in building the data analytic infrastructure is absolutely I thought to that but.
Its something that we felt it down there in the yet it's something that its halted the investment that we have we started and you're absolutely right. It underpins all of these different digital channels, because it will allow us to build a single view of our customer and as I as I mentioned in my own for too long and also begins.
Engaged with them in a much more personalized any much more individual mount and much more relevant now that you drive all those type of that comes that we're talking about which again you rightly mentioned, so you're absolutely right that as critical it's just not guest facing.
And John you're right. It was <unk>. He was in my section where I noted it quickly as we were talking about some of the investments that we're making to digital so.
Both right [noise].
Yep.
Our next question comes from the line of out.
No, but Longbow Research you May proceed with your question.
[laughter].
Yes, I got it thanks, taking my question I, just Wonder press on you know you know what I see was asked earlier about it's Gotta go over next couple of years, you know I play Devil's advocate, if we don't see the consumer go back sort of pretty cool normal you know because they have any impact on your decisions, maybe you feel more suburban versus urban locations or is just too early.
Now, it's really no sure I'm, if it's going to have that it back or not.
Well all since it's a good question none of us I'll leave that to the economist and the.
<unk> future tellers to figure that out for us what we're going to do is make sure that our company is well positioned for value, which it always has been for experience [noise].
Even if the economy, and we see a deeper and longer lasting recession that certainly could happen as or maybe some impact from that and we will see what we want to do is make sure our products our pricing and everything we do fits into a world that bashing work for people that that is who we have been.
From the beginning bulk and good economic times entering the last a great recession. When we began the growth of our company no way no nine and in today. So you know look I think when we think about the portfolio.
It is going to be balance as I've said, a few times on this call. We absolutely think there'll be a mix of suburban or we think there will be a return to cities or might look a little different for a while but but ultimately we believe urban centers are going to continue their path that they began but it may take some time and we're going to balance out our portfolio in the meantime.
And to make sure we've got strength everywhere.
Our next question comes on line of Chris Ocull with Stifel.
With your question.
Great. Thanks, Good afternoon, guys its Patrick on for a for Chris I was curious when you start planning or one of your planning to start testing your own delivery channel and that's something you see rolling out across the system or do you believe it's just certain markets relocation type for that makes more sense and then secondly on the shack track additions that you mentioned a in the deck.
Do you think the total opportunity is to potentially add a shack track to or retrofit of shack track with existing units.
So I'll focus on track.
Well John I.
I mean on the delivery I think and you know we didn't have a specific launch date.
For you you know I think we expect that to be a capability that we can offer within the next three to six to 12 month hopefully the other parts of that but there's a lot going on in the in the digital development team right now and I suspect like most new functionality, we will test that in different ways in different places so all of that still.
Well to be Worksite, and we'll update you once we've got sort of a mobile only launched on it certainly not tomorrow and but it's very much on the right.
Yeah, I understand when we look at contracts.
Uh huh.
No okay.
Yes, as we look at shots US you know it's hard to say.
Not every shackled you ought to be easily converted when we think about the exterior.
Really to have either delivery drivers at a separate area and our pre order channels really the definition of shock is going to be our preorder channels in the ability to to get that pickup.
In an extra away that's separate and easy for you whether you choose to stay or take it to go.
There's a lot that Ken there's a lot that a little phones year than others. We showed a couple of pictures of some of the ones. We think we're going to work towards execution in the supplemental deck and you'll get an idea for that so at a minimum the inter pick up experience will continue to improve Doug we know one grace childhood Shake Shack is were high volume Russell.
As a whole bunch people and we know in that with each on pre covenants certainly can be a challenge now so that we want to make sure. We can improve that use of use and convenience for our guests to get their great. You know premium shake shack food and little bit the easier easier fashion.
Our next question comes from the line of Jeffrey Bernstein with Barclays. You May proceed with your question.
Great. Thank you very much and again, thank you for the incremental color on the slide deck the period and geography stuff is very helpful.
Think about the the comp recovery as you progressed over the past three or four months. It seemed like you had a huge improvement in may north of 20 percentage points.
Off of the April troughs, but then in June I guess, it slowed down to 300 basis points. After you adjust it in July seems like it's totally flat with June at the same down 39.
I'm not I guess it despite.
Some reopening.
I know when you look by region. It shows like the northeast sort huge improvement in July but yet it was only single digit improvements in noncore markets. So.
My question really what what do you think the recovery maybe.
Slowed or stalled out a little bit and the most recent month or two and how do you getting confidence that the headwind is all corporate related rather than perhaps the brand maybe not resonate against certain new markets. I'm. Just wondering how you decide for that as a new kind of growth company going into some of these markets, whether it's the brand or whether it's just the covert headwinds. Thank you.
Well I wouldn't I wouldn't put a whole lot on their brand.
Trying to establish that during cobot, I think the brand stronger than ever and <unk>.
Remains one of the great brands in our industry. So we're really confident that look the pop to may was coming off of massive lows.
June were deeply hit by protests again, a result of our urban architecture.
You see and then as you look in July we had re closing of diamonds and that's another kind of bump back as as some of those regions like California, Texas, Florida, many others.
Were hit if you really look at the Regionality you'll see.
And this is let's go back from the beginning of what we've said since we've gone public comp is not the only way to look at this business, we have about half of our restaurants in here and there are wildly swaps. One if you look at some of our top restaurants.
Okay. In this company I understand the impact that they have.
Do you ever District in New York City Penn station. These shacks haven't gotten any better because of the summer King. These are some of our best restaurants, and some of the best restaurants I'm not sure there a whole lot of five dollar Burger joint and the world that looked like these and there's a lot of those in the shake shack system not job.
The Manhattan, but those really drag it down those big impacts really drag it down.
And that's that's that as part of the story, we've told for the Shake Shack.
Same shack sales comp base from are getting its frustrating for us and we've got some are best restaurant still close Grand Central terminal one of our best restaurants in the country. It's close right. These are these are these are unfortunate truths and the cobot reality. So look I think our brand is strong.
I think a you know July was better than it wasn't the Boston well, we're hopeful that we'll continue to tick up and as as a world can we hope continues on a positive trajectory. There's no guarantees we're gonna we're going to try to capitalize on that and get ourselves back to a gradual recovery.
Our next question comes from the line of Andrew Charles with Cowen You May proceed with your question.
Randy I appreciate the commentary for 15 to 20 planned openings for 2020, but can you talk about the decision to resume development. Following same shack shale sales at a however to the similar levels last three months you know given the cash positioning it's an opportunity to secure the leasing get you could sites for the future apology actual construction development in order to concentrate the efforts and increase.
The focus the recovery rather than growth.
I think we can continue to focus on bowl Andrew there's not a cash issue we have fortified our balance sheet to an incredible amount that gives us total flexibility as we look forward I want to call out no the.
Our shared that our new shocks in the encourage seven July performed at 40% higher average weekly sales than our current system.
So that gives you any indication or whether people are excited to find the new shacking their neighborhood I think that answers. It for you now you know, we'll we'll see where that goes it's very hard to measure what a new shack looks like during cobot, but you know we've opened in places like Sacramento, California, If the first time two extraordinary start I will.
Deepened our our footprint in L.A., given our footprint Saint Louis North Carolina, and many other places. So we were excited to keep growing but we shouldn't do it at the same rage, why we're not going to hit our original guidance for good reason.
But it certainly is not taking the focus off of recovery recovery for us I believe our teams are working hard and doing so many of the right things recovery for US is is a big part of covert allowing go to return returned to travel we exist in some of the best <unk> most high traffic demand areas.
In the world.
And you know.
We'll keep focusing on that with everything we can and we also need some tailwinds of a of the world to covert to start going our way a little bit to get back to full recovery as it takes some time.
Our next question comes from the line of David Tarantino with Baird.
With your question.
Hi, good afternoon.
My question on the shape of the sales recovery are saying.
Oh I appreciate the challenges you have in some of the urban markets.
I wanted to focus the question on the suburban shacks, so if I look at.
How that's trended and how that is trending down 24% in July it does seem like the absolute level of.
For the recovery.
Shallower than what we're saying elsewhere.
I would put in your peer group. So just wondering if you could comment on that and what you think might be the biggest impediment in the suburban Chicago.
In terms of recovering the sales.
I'll start let's start with anyone you had put in our peer group probably has thousands or multiples of that more restaurants than we do so let's just start there we have less than 100 shake shacks in the comp base of which we're talking about right now so it's wildly swung by just a few so it's really hard to to compare us.
To the industry in that regard there are some trucks that are up there are some suburban Jackson that are up but you have to remember when you think about suburban.
A lot of these are high traffic destinations as well the malls.
Hey, there the malls and not the busiest places right now other places where people would necessarily gather where even where traffic traveled tourism and business suburban business centers as well so.
You know the greatness of our real estate is exactly the challenge we have today.
I think with you when you compare us to companies with thousands of other restaurants that have a more regular real estate and much more diversified overtime.
It's much more.
I I mean, not speak for them, but it's a little bit more spread out.
Our our real estate as little more special and therefore impacted and that's really the sort of we're trying to tell with these extra numbers to that.
Great. Thanks for the perspective.
Our next question cultural alignment.
Yes, Sir you May proceed with your question.
Thank you.
Thanks for taking the call and thanks for sharing on the detailed Tara if you could just.
Recap again, what you said on the on the cash burn rate I think you would say.
I'll, just what you speak on that and also.
You've given us great segmentation on sales would you care to share anything in terms of.
Buckets of margins by other suburbans for the regions just.
What's the Delta looks like.
In the best and worst Cortiles Ah. Thank you.
Hey, Brett and Yeah, I'm happy to just restate accounts than Pete So what we said wasn't we're pleased that we all know oppose it then cash at the shack level and or improved at the enterprise level to the tune as 100000 and battling with isn't excludes the temporary I feel.
In pay in the guaranteed manage it benches in the shack, an opex, great New shack and development Capex. It. It is that number is also reflective of a current DNA spends it shows they mentioned a in my prepared remarks, we're beginning to gradually increase if they'll come back and we only become much more proactive.
Oh, no strategic investment strategy.
In terms of Oh flexibility, we own because they haven't reported in broken down for up to their thing comes with any kind of segmentation.
The biggest correlation to cope with it wouldn't surprise me Tonight and its sales.
So I think you can look at Directionally as sales performance and assume that profitability and to some degree will mirror that sales will be as sales recover they will profitability and therefore, you can you can apply that rationale and I'm shocked by soccer or region by region basis.
And it's fair to say the open shacks, a another thing a bit more right now generally speaking.
Our next question cultural I know, Peter certainly would be T. G. You May proceed with your question.
Great. Thanks for taking my question.
I appreciate all the color you guys provided today I want to come back to the conversation.
[laughter] development side and that all the formats.
[laughter].
That's all.
Real estate strategy going forward.
With that formats, [laughter], such that you're targeting.
Be available for lease or ticked off to spend more to acquire some plan to maybe changing shot.
Oh.
Yeah, we don't really intend to purchase a that's part of the question. We do continue a intend to lease as we have we don't own any real estate today, and it's not saying we would never but you know that's not our.
The best return on capital for Shake Shack today look we're finding that there is an ever shifting Bowman here a big landlords in small are waking up to see who's out there.
Many restaurants, and retail will struggle Fulton dry retail and restaurant and or you're going to see a pretty radical shift look I think drive through locations will continue to be kind of what they were there pretty good locations, we'll see.
What the expectations are because I think people are going to continue to grow in those.
But there are no they're available there's lot of brand to I mean, you follow it you see the number of brands that are either bankrupt or struggling there's going to be a lot of sites available you want to make sure. We go after the best as we always have and when we view that will do in each category. So if we're going after some suburban.
Real estate that can either be a drive through or a shock track drive off or pick up I'm going to make sure. That's very real estate and has a great return on capital going to go right. After it.
I think this is a great moment to be in market and being a buyer its a great moment to be one of the not so many brands that are out there being opportunistic being aggressive and getting after it we've got a lot of water phone calls are coming our way about great real estate opportunities and we're going to do.
That appropriately so the whole point of sharing with you. These new format. Today is to again continue to encourage the understanding of the growth of the addressable market and the amount of locations that we think we can get to a that's that's taking the next step for us in that opportunity next year.
Our next question comes on line of Brian Vaccaro with Raymond James You May proceed with your question.
Hi, Thanks, and good evening had a question. It's all about just a quick clarification on the question is based on the disclosures from many of your peers. It's been interesting to see how to consumers utilized takeout versus delivery and the Tobin environment I'm just curious what percentage of your digital sales were delivery in the second quarter and I know, it's still early but could you.
They're a little more on how that curbside pickup test performed in the test a the 10 test units.
Yeah. So we haven't broken out the delivery, it's within the 62% total we haven't broken it out what we have said and reiterates our channels all the stronger one and a higher growing channels.
Well again, we're excited about the amount of delivery, we're doing and excited to continue that channel we haven't broken it out when we talk about curbside. It's literally just spend a couple of weeks. So it's really new it's only about 10 shacks and the initial data is that each day, it's grown a little bit each day people are figuring it out we haven't market. It is.
We haven't told anyone it literally just popped up in the App. So if you're savvy enough you say, Oh cool new option I'm a true this I'm not try this.
And people are trying it more and more every day and we're really excited about it. So you know that to US. We believe had the opportunity there were everything about guests experience, especially now and everything now we've got guest experience, including safety you know make sure I can come to your brand and feel good about it feel good about these say.
We're going to live that for a while and curbside, we believe can be a solid additions so.
We're hoping to get the 50 shacks by the end of this quarter and we'll keep you posted I'm I'm excited about this I think this is a fundamental a big opportunity for shake shack, just a shift to share count people use us make it easier on him reduce some of that stress and in the meantime use that and we'll see and you can even do it you know if you intend to say.
Yeah, well see so preorder hedges me a lot of opportunities to either convenience.
Ladies and gentlemen, we have reached the end of the question and answer session I would like to turn the call back to Mr. Randy go rooting for closing remarks.
I want to thank you everyone on the call today.
Second quarter for us for our country for so many companies had real hard one it's been a hard one for our team and I'm a incredibly painful for their resilience you know, we're all hopeful that that was a trough moment and I will continue to see the gradual recovery coming out of it and looking forward. We've got a lot of new ways of new.
We're excited it's going to be doing it shake shack to capture a great future. Thanks, everybody. We look forward to talking with you soon.
This concludes Tonight's conference you may disconnect. Your lines at this time. Thank you for your participation have a great day.
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Is there anybody on that is I'm wanting to go into the sell side Conference. Please press Star zero.
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