All right, we're going to get started. I'm Andrew Charles, I'm TD Cowen's restaurant analyst, and we're thrilled to host Shake Shack CEO, Rob Lynch, and new CFO, Michelle Hook. Shake Shack was born in New York City in 2004 and has since grown to 440 U.S. locations and 245 international locations. The business is known for fresh, never frozen burgers, hand-breaded chicken sandwiches, crinkle-cut fries, and premium milkshakes. What I think we'll do this morning, Rob or Michelle, I'll turn it over to you guys to address this morning's release, and we'll take it from there. Great. Thank you, Andrew. I'll just start by saying that we have a ton of confidence in the Shake Shack model. We are delivering double-digit revenue growth, operating margins between 22% and 23%, and double-digit new store sales growth. Those foundational principles put you in some pretty rarefied air in this industry. We are seeing some challenges, short-to-midterm challenges, on the cost side. Obviously, I think everyone is aware of the beef prices that we're battling. They've continued to escalate. We are also seeing fuel surcharge prices on some of our distribution and some of the other input costs in the middle of the P&L. We felt like it was prudent today to reflect that in our margin guidance, both for the quarter, there's only four weeks left in the quarter, and then for the year. We have done a lot to mitigate a lot of inflation over the last two years. We've significantly improved our operations in our restaurants, and we've done a lot of work in our supply chain to mitigate our cost of goods sold. We've also done our best to hold on pricing. We've taken less pricing over the last year than we've taken in any of the three years prior. Those efforts have resulted in, once again, 22%+ restaurant margins and double-digit revenue growth, obviously, it's not what we communicated at the beginning of the year. We wanted to make sure that the investment community had the most updated information as we've gotten it. Michelle coming on three weeks ago has been a godsend for our team. She's come in with a lot of energy, has really dug into the business. We talked a lot about what the right opportunity was for us to share the updated information, and that's why we chose to do that today. I think to Rob's point, Andrew, just as we are two-thirds into the quarter, to Rob's point, we have four weeks left. I know we gave an update to everyone a month ago, but updates are good, and what we're seeing in the business today is what was reflected in the updated guidance that we delivered. To Rob's point, when I look at the health of this business and you look at three straight quarters of positive traffic growth, 21 straight quarters of positive comp growth. When you look at how we're opening our new Shacks, I think the returns on those Shacks are very healthy. We're opening more Shacks than we have in the past. I think when you look at just the core fundamentals of the business, very strong. To Rob's point, there's going to be some headwinds in the macro, and we acknowledge that, and that's part of what you see in the updated guidance today, reflecting our views on the current cost structure and what our views are just given the competitive landscape and all the things that we know of today. Very good. Michelle, I believe this is your first public appearance since taking the role. Maybe talk a little bit more about what brought you into the role and your, not observations so far, but more so your priorities. Yeah. Obviously, the brand is amazing. To join a brand such as Shake Shack was something I'm just grateful for the opportunity that Rob gave me and just the faith in stepping into this seat. My background is in restaurants, having spent quite a number of years at Domino's and the last five and a half years at Portillo's, I live and breathe this industry. Just when I think about an iconic brand in this industry, Shake Shack is at the top of the list. When I look at just the growth potential of this brand, it's tremendous. I know we put out the 1,500 Shack number, but when you look at that coupled with just the international growth that we've seen and the opportunities there, it's just a tremendous brand, tremendous opportunity. Culture is also important to me. When I met Rob and the rest of the team and the core of this culture built on our founder, Danny Meyer, and the concept of Enlightened Hospitality just resonates very strongly with me. All of that weighed into me sitting here today, and I'm happy to be a part of the team and look forward to being part of the growth in the future. Very good. We're super thankful to have her. Having somebody with her experience come in, she's hit the ground running. I think you took, what, three days off from Portillo's. Yeah. Has dug in on every facet of the business and is adding value right out of the gate. That's great to hear. Okay. Rob, I want to talk about some of your priorities, starting with marketing. You've made a lot of investments around this the past few years, really doing a nice job making sure there's no holes in the menu innovation calendar over the last 12 months. I'm curious about as we go from here, second half of this year, you're going to lap over some successful menu innovation for the back half of the year. What do you think are going to be the most meaningful sales drivers as we go forward? Yeah, we're going to have great innovation this year as well. It always starts with culinary. You have to have something to sell, and we have the best culinary in the business. We're excited about what's coming, both this quarter and in the back half. On the marketing front, what I would tell you is the first time we ever bought a paid media ad was Q3 last year. We were really excited about the initial results, right? We saw 5% comp growth in Q3 last year with 3% traffic, and that was our first positive traffic quarter in quite some time. Really emboldened us, and then we continued to invest in Q4 and delivered positive comp and positive traffic in Q4 as well. That continued into last quarter. Last quarter, we delivered 4.6% comp and 1.4% traffic growth. Really great numbers in the context of the industry in which we're competing. Three straight quarters of traffic growth. We're really excited about our ability to drive the top line, particularly on the comps. Then on our new Shacks, we are delivering really strong returns. We've obviously managed the cost of opening those and building those, and we're seeing with our 22% margins and continued revenue growth, the returns on those are really promising. We'll open up more this year than we've ever opened up in history. We think we're getting a great return on our capital. In the back half of this year, we will continue to make investments. What I get really encouraged about is we didn't know what we didn't know in Q3 last year. It was the first time we'd ever bought media on this brand. I think over the last nine months, we've gotten a lot more proficient. We've brought in some really good talent to lead a lot of our marketing efforts. Jim Taylor, who was the President of Sonic prior to this role, has come in as our Chief Commercial Officer. We've got some great talented people on our media side. I think the returns that we're going to see from our media investments are going to outpace what we saw last year. Even though on a relative spend level, we're going to see pretty consistent, I do think that we're going to continue to see improved performance of those investments. Yep. Okay. My follow-up question is around given the current macro, if there was a desire to deviate from that 2%-3% that you guys have outlined as long-term opportunity, sounds like that's still the right range, just better opportunity that you guys are seeing to improve the return on ad spend, though. Yeah, I think we're going to keep in that range because I'm highly focused on our G&A. Our marketing is funded by our G&A. We have made big investments over the last two years to build the supply chain capability, the operations infrastructure, our tech capabilities, and then our marketing investments. All of those capabilities are in place now, and now we need to start driving leverage. I don't have an appetite for increasing our G&A investment. If anything, we're going to start ratcheting it down. I've committed to G&A leverage in 2027. I'm already pushing those buttons in 2026. There won't be a significant infusion of investment into the marketing budget. Very good. Okay. Let's talk a little bit more about menu innovation. It seems like the cadence obviously has gotten a bit faster as you guys have found more opportunity and just more things that you can explore since the third quarter of last year. What do you find to be the right cadence for the new menu launch? I feel like you've gone from this crawl, walk, run strategy, but you tell me if you think of it a little bit differently from a cadence perspective. Yeah, what I would tell you is we're pretty consistent with the way Shake Shack has delivered innovation over the last number of years. We have one big platform innovation every quarter or either every three or four months. We do a lot of work to build a platform. It's not just a sandwich. It's a sandwich, it's the toppings that we put on the fries, it's other sides that could tie into that, what I would say is a story, right? We start with our guest, and we identify what type of flavor profiles, what type of things they're going to love, we build a story around that. Right now we've got barbecue, right? We got a barbecue burger, we got a barbecue chicken sandwich, we got a barbecue rub, we also have barbecue fries. We try to build that story, and that big story is going to happen three to four times a year. That, believe it or not, is pretty consistent with what has been in the past year. In between those big quarterly initiatives, we're going to have other things that we believe are compelling and can drive news and virality. That's where Dubai Shake kind of fit in last year. We did something around the Masters, around pimento cheese and timed it with the Masters this year. Obviously, we're not a sponsor, so we couldn't call that out, but I think a lot of folks know that. We just want to insert ourselves into culture with our culinary. We want to be the culinary leaders in this industry. We're going to continue to leverage innovation to insert ourselves in when the story makes sense, and that's going to complement the big platform innovation we launch three or four times a year. Great. Let's talk about the loyalty program, launching later this year. You talked a lot about how the vision for the program goes beyond typical points and discounts-based program that's common in the industry. Can you provide an example or two of how the program is going to be different than what consumers are used to at other fast casual concepts? Our aspiration is that when you walk into a Shake Shack and you're a loyalty program member, the person standing behind the counter is going to know your name and is going to know what you order regularly. That's the vision. If you go back to our roots and you go back to Danny and Union Square Hospitality Group, that's what differentiated USHG. Great food, great chefs. I'm not saying taking anything away from that, but what really differentiated that company was the hospitality. That means you know what's important to your guest. That's our aspiration. It's not just, hey, we can send them emails or SMS, and with discounts or offers, or they can just accrue points. Those are components of every loyalty program, right? The goal of a loyalty program is to drive frequency. We aspire to do much more than that. We want to drive true brand love, not just frequency. Loyalty you can define as like, okay, how often do they come back? Loyalty you can define as like, this is a brand I love, and our aspiration is to make sure that we accomplish both of those objectives. Okay. The kiosks right now, they record phone numbers for users. Is that an opportunity to kind of blast text that, "Hey, we have the numbers. You have my name, can you tell me that you're launching a loyalty program? Yeah, we absolutely do. All of those folks are tied into our guest recognition platform. We know by your phone number if you're coming in to order at the kiosk or if you're ordering on our app. We manage our current guest recognition program. We don't have a points-based loyalty, but we do have that facet of a loyalty program where we know what people are buying, how often, and we can reach out to them either through email or phone numbers. Yep. Okay. World Cup's starting next week. Obviously, you guys are excited about what's to come there. Can you talk about the activations you guys have planned in place as New York City is going to see a lot of tourism and a lot of other major metros for you guys? Yeah. Look, we have been really bullish on the World Cup. I will tell you that some of our guidance today was impacted by some of the tourism trends we're seeing, particularly in New York City. Tourism has softened over the last three or four weeks. We've been tracking that, we've been monitoring that. We still think there's going to be a big benefit to our business. We've actually removed any of that from our guidance going forward. We believe that Shake Shack is a destination restaurant. Right? When people come to these cities from, not just internationally, but from the surrounding metros that people will be driving in to watch these matches because it's a once in a generation opportunity. When they come in and they have opportunities to eat, they're going to go to the special place, we are the special place in this industry. We've always been kind of a destination special place. We feel like we should benefit disproportionately from the World Cup. For the size of our company, we have a big global footprint in a lot of these countries that are coming to visit. We're in those countries. We're really excited about the World Cup and we're activating both primarily on social media, but also at our Shacks. We're preparing. Obviously, once again, we're not a sponsor of the World Cup, we can't highlight FIFA or highlight the World Cup, but we can definitely make sure that our team members know that it's going on, are representing the fact that it's going on. We can make sure that our restaurants highlight the fact that it's going on, even if it just says, "We love soccer." Something as simple as that. Yeah, we think it's going to be a disproportionate benefit relative to the industry for us. Very good. I want to talk about the operations summit you guys hosted back in 1Q. What were the takeaways from this event, both in terms of what has seen the most success so far and opportunities as well on the horizon within operations? We have become significantly better operators. We are measuring everything and we are managing everything, and we're supporting our team members, supporting our GMs, but also holding them accountable to deliver on our targets. What that's led to is a significant improvement in productivity on the labor line. Right? Despite continued labor inflation, we don't talk about it that much anymore because it's not 10%-15%, but it's still going up 3%-4% a year. We've been able to mitigate that. We've been able to deliver margin growth despite inflation, both on the COGS line and the labor line. We've optimized our labor based on the way we deploy it, and our focus is on labor attainment, right? It's not just pure labor hours. Based on the number of hours that you've been given, allocated based on your sales forecast, are you hitting the number? Attainment is how close you get to that number because sometimes people will cut too deep and then that causes all kinds of problems. It's not just about being under what you've been allocated, it's about being close to what you've been allocated. We've seen a much higher level of performance, and when you build an operating model like that that's efficient and productive, other things start to happen. Like team members stay longer because they can count on the hours that they're getting. Overtime goes down because now you're not plugging holes, right? All of those things have come to fruition in our operations. It doesn't mean that we can't continue to get better. It doesn't mean that we're not searching every day for ways that we can get more productive. We have done the heavy lifting there. When you talk about our cost structure, where we are really focused right now is on the supply chain, and there's no better time to be focused on the supply chain given where the cost structure is and how it's impacting our P&L and our determination to take as little price as possible to make sure we can offer value to our guests. It becomes super critical that we have a productive supply chain, and our team has really worked on that. We have gone out and RFP'd a lot of our businesses and even where we have kept our business with the incumbent supplier, it's made them better. Right. It's forced them to really look at their process, to look at their cost structure, to get better, to maintain the business. Lots of benefits coming out of that. We're probably in inning four of that with a lot of opportunity left to go. Both of those initiatives, supply chain and operation/labor management, have really improved the middle of the P&L. Yep I think when you look at, just to jump in, where our margins have gone over the last two years, there's been 170 basis points of restaurant-level margin expansion over the past two years. I think that speaks to exactly what Rob said, is just operationally, the efficiencies that the team's been able to generate, whether it's in supply chain or on the labor front. You see it. For sure. I want to dig into margins in a little bit. Speaking about more operations, on the top line, though, you've seen a significant improvement in speed of service from seven minutes to just under six minutes over the last few years, since you've been here, Rob. What are the key drivers of that, and is there opportunity for, say, another minute, or how do you think about the opportunity going forward for speed of service? I'm just going to be transparent. I don't think that we're trying to get another minute out. We're never going to be fast food. We cook everything to order, and that takes time. I think what we need to do is make sure that our guests' expectations are set accordingly. Right? It's really not an issue in the dining room. People come into our dining room, there's music playing, it's always clean. Our team members are hospitable. Coming in and waiting for six or seven minutes in the dining room, not a problem. Drive-through, the guest has been conditioned that a drive-through, especially an empty drive-through, should be a one-minute model. That's never going to be our model. We're working to test and optimize the way that we can appropriately set the expectations for the guest in the drive-through so that we're not disappointing. Someone who comes to us for the first time who's used to going to fast food, who pulls up and puts their order in and pulls around to the window and has to wait five minutes, is going to leave a dissatisfied customer. Satisfaction is a function of expectations, and we all know that based on guidance and things like that, right? That is what we need to do better in the drive-through. Then I think we do a really nice business in our digital channels and on delivery. We have a big, healthy delivery business. The one thing I would say is that we are absolutely focused on not disappointing the guests. I want to eliminate. It's not about moving from six to five minutes, it's about eliminating, nine- and ten-minute occasions. That's really the metric that I'm watching. What percent of our transactions are above eight or nine minutes? Is that happening in a core Shack? Is that a new Shack? Is it a drive-through? Is it suburbs, urban? All those things I watch, and if I see things kind of start to go sideways, then I pull in our operators and I say, "What's going on here?" We fix it. I want to eliminate the really disappointing instances. I don't know that we're going to get down below five minutes, or that we have a goal to. Yep. No, super helpful level set there on eliminating the outliers rather than get the whole base faster. Appreciate that. Congruence with operations, I want to talk about technology and the opportunity there with Project Catalyst. It's a consortium of technology initiatives that you guys are undertaking, and I guess for the outside world, if you had to break it down, what are the one or two ways you expect this to have the impact to either same-store sales growth or to improving restaurant-level margins? Yeah. I've always been kind of the youngest executive in the room and the youngest CEO and all that stuff, so I kind of thought I was on the cutting edge of technology, but I totally am not. This stuff that our team has put together on the AI front, I honestly can't believe it. From an operations standpoint, we've developed tools for our operators, both store level and above store level, that are going to make them significantly more productive. Our operators today, our GMs, store-level management, they're going to be able to go on their phone and ask any question about anything going on in their restaurant and get a real answer grounded in real data. Every piece of data we have in our company is in our data stack, all of our AI platforms tap into that. When they ask a question, they're getting the best answer they could possibly get. That never used to be the case. "This is broken. What do I do about this?" Or, "I'm having trouble with inventory. How do I manage this?" They're going to get direction that is going to be best in class. Above restaurants, a lot of time for our ADs who run anywhere between eight and 10 restaurants, a lot of their times are pulling the analytics of the business so that they can get that information to go and sit down with their GMs and walk through the business. You're thinking about if it's like a five-day week, one of those days is spent really just getting all the data. Today, with the tools that we've built, they're going to be able to get all that data in minutes. That's going to be time that they're then going to be able to go and spend in the restaurants with the GMs, hands-on, coaching, developing. That's just going to make them way more productive. Ideally, long-term, that should help increase their ability to manage and improve the spans of our restaurants, right? That should add productivity to our above-restaurant levels. At the corporate level, I don't know if we ever have a meeting anymore where we have a question. You remember when Google was the first thing and everyone would have a debate and you're like, "Well, let's ask Google." On really detailed, kind of analytical stuff, we're having a discussion at the executive team level, and two or three people are typing into Shack AI, like, "Hey, we're thinking about this." Literally, a minute later, we've got all this insight and all this perspective that's grounded in our data stack. That's going to help us make more informed decisions. It's going to help us make faster decisions, which is definitely going to drive productivity. That's great. Less more kind of top lines ties a little bit into cap allocation, just remodels has come up the last two conference calls. Can you just give us a sense of the scope of this initiative in terms of the number of restaurants to expect? You do have some restaurants now that are starting to eclipse 15 years or so. How should we expect this to unfold over the coming years? Our remodel decisions are very different than what you would see in a scaled franchise where they're contractually obligated to remodel. I talk about we don't need new restaurants to be great restaurants. Some of my favorite Shacks are some of our 15, 20-year-old Shacks. Both in the city, there's one down in Orlando, in Winter Park, Orlando. I don't know if you've ever been there, but it was one of the first 20 Shacks. You walk in and it's warm, it's inviting. What I tell the team is, "Look, I want our Shacks to look cared for, and I want them to be comfortable." Right? If we get to a point where that's not the case, then yeah, we've got to make sure. We're not going to wait 10 or 15 years to do that, right? We're going to do that in real-time if we have some of these super high volume Shacks here in the city, a lot of people, a lot of traffic. They may need a touch-up every year or every two years. Our plan does not have a significant number of full remodels in place. When we talk about remodels, it may be a tenth of the cost of a full QSR-obligated remodel program. It's not a significant use of our capital. Yeah, to speak to capital allocation as we think about that, the cash that we're generating, obviously, we're putting primarily back into our new Shacks that we're opening. You're always going to have some capital that you're allocating to existing restaurants or Shacks, right? As we think about that, how we rate and pace that, to Rob's point, over the course of the years, will be decided on maybe these five need a little bit more love in this year, then you move on. Yeah, you have a plan, right? When you think about capital allocation, it's still primarily going to be into our new Shack openings because we're getting great returns right on that capital. There's always going to be that repair and maintenance capital, and then investments that you're making in other, call it corporate initiatives, and we think about Project Catalyst and the investments we're making on the tech side. That plays into capital allocation, too. All that weighs into how we view capital allocation. The good news is we generate plenty of cash flow, and then how we deploy that, I think is, in those three buckets. Great. Let's touch on margins for a minute. We talked a lot about it already, but just, Rob, take us through the process of, okay, beef obviously is higher for longer. It's an industry challenge. Talk us through the process, though, around the supply chain efficiencies and the guardrails you put in place. Say, there's opportunities that we can take what was previously under-professionalized, put it in opportunities today. But what are the guardrails as you go through those processes, particularly as it relates to beef? Yeah. First and foremost, we will not negatively impact the quality of any of our ingredients. We will either maintain or improve it. That goes for our ingredients. That also goes for our recipes. We're not shrinking the amount of anything on our products. We're actually looking at, and we have a couple examples of where we actually have increased some of our costs to try to make our food better. The real guardrails are simply quality. We're either going to meet or beat the quality in any change that we're looking at from a supply chain standpoint. That's really the only guardrail. Other than that, we need high-quality suppliers that we can count on, that we know have a reputation of delivering service levels commensurate with our needs. We've RFP'd almost every ingredient. We're now going non-direct on some of our cleaning supplies and some of our other things that show up in our restaurants. We've just done some work on the packaging side. We're looking at every facet of the business and making sure we get the right supplier who can deliver the quality that we need in a sustainable and confident way at a cost that makes sense. Okay. I want to turn and spend some time on development. After three years of opening around 40- 45 company-operated Shacks, big step up this year to 60- 65. These decisions obviously were made in arrears, presumably back in 2024. I'm kind of curious to know what gave you the confidence to make that kind of a stair step higher rather than just kind of ratchet it up to that level? Yeah. The number of openings is really a function of the size of the pipeline. We've never had a bigger pipeline at Shake Shack, so I got to hand it to our real estate team and our development group for finding great real estate. We have a ton of white space and a ton of markets that we're already in, as well as new markets that we have yet to open up. Real estate is not the limiting factor, so we've been able to go and find a lot of great sites. We've also gotten a lot better at construction. When we were opening up 40- 45 units a year, when that pipeline was built, our construction costs were about $2.5 million. Today, our construction costs are right around $2 million. That gives you a lot more confidence to go and open more because you know the returns are going to be better. In addition to that, when that pipeline was built, our restaurant operating margins were probably, three years ago, right around 19%, under 20%. Today, what we guided to today is 22%-23%. Once again, it's all a function of expectations because when you think about restaurant operational margin, 22%-23% is best in industry. Most concepts are operating around 15%-16%, right? Now there's royalties baked in there, so make it 18%-20% is kind of like what the best operators are doing. We're doing 22%-23%. I know we revised the guide today, but still a really healthy operating margin. When you have lower costs, high operating margins, and better operators running your restaurants, that gives you the confidence that you can open more restaurants. Yeah. Rob, let's take a look at the denominators as well. Building costs after so much inflation peaked at $2.6 million in 2023. You're just under $2 million last year. Some of that decline is driven by fewer drive-thru Shacks, but what else has been kind of the keys to reducing those build costs? A little bit, particularly two years ago or last year was fewer drive-thru Shacks, but we're going to open up a fair number of drive-thru Shacks this year. I think it's really just we've leveraged our scale with our contractors and our suppliers the same way we're RFPing our beef or our french fries or our other ingredients. We're RFPing the input costs that go into our development platform. We have been able to work with our suppliers and say, "Look, we're going to open up 30% more restaurants this year than we did last year." We've guided to low double digits, right? Low teens restaurant growth. That's about as fast as any individual entity is building restaurants in this industry, right? People with higher growth typically have large franchise systems where you have 100 different franchisees opening two or three restaurants. We're one entity opening 60 restaurants. Chipotle and Cava, they're probably the only two that are out there doing that. We have a lot of confidence in our ability to open the restaurants with excellence, and the flow-through is going to be there because of the lower build costs and the higher margins. Yep. Accelerating the drive-thrus this year, I know it's been a passion project of yours and Stephanie's. Can you talk about what gave you that confidence that you inherited some drive-thru sites, but obviously they need to be optimized. What was it that made you confident that, hey, now is the right time to step up the development of drive-thrus? I'm curious as well if you've seen enough consistency to talk about the sales volumes and the margins throughout drive-thru as relative to the overall base. What I would tell you is we are better at operating drive-thrus today than we were at any time in our past. We're still not all the way to bright. The point that I made with you about setting the appropriate expectations, a drive-thru guest just has a different set of expectations on speed and on price. It's the highest value channel. People are buying combos, they want deals, and they want it fast. That's not our model. We have built these drive-thrus and we're going to continue to build drive-thrus to take advantage of great real estate, but we have a lot of work to do to make sure that we are setting the expectation going through our drive-thru, knowing that everything that they're ordering is made fresh, knowing that everything they're ordering is the highest quality it can be. We still have work to get there. We're going to build more drive-thrus this year than we did last year, but we're still focused. The bulk of our restaurant expansion is going to come from dining room, pick-up window, real estate. Okay, very good. I see we only have a couple seconds left, so with that, we're going to conclude the discussion. I want to thank Rob and Michelle for their time and insights, and for institutional investors, I want to end by asking for your support in the Institutional Investor poll. Thank you, everyone, for coming today, and thank you both so much. Thanks, Andrew. Thank you.