All right. Thanks, everyone, for participating in Oppenheimer's 26th Annual Consumer Conference. I'm Michael Tamas on the restaurant team, and I lead the coverage on Shake Shack. Shake Shack has about 400 company-owned units today and another 300 in its licensed business, with an opportunity to expand its footprint to 1,500 company units over the long term. The company targets annual unit growth in the low teens and EBITDA growth of low to high teens. We're excited to have Rob Lynch, the CEO, and Michelle Hook, CFO. Rob joined the company in May of 2024, and Michelle joined just a few weeks ago on May 11th. Thank you both for taking some time to speak with us today. Thanks for having us, Mike. Thanks, Mike. Over the last month or so, you've reduced your EBITDA guidance twice but really only by about 5% in total. The business is solid, and you're still targeting 2.5%-3% same-store sales for the second quarter here. Can you just talk about maybe what changed in your assumptions when you did alter that guidance last week? Do you think you've appropriately set the bar now for the rest of 2026 to avoid any further reductions? Yeah. I'll start and let Michelle add some color. She's come on the business and had a really material impact, positive impact. Over the last month, we've been watching really closely the cost structure of the business. The beef prices have gone up relative to what we were forecasting back in late April. I think everyone recognizes that. We recognize it. We've done a lot of supply chain work to mitigate a lot of the inflation in beef this year, but June will be the highest beef prices that we've seen. So with the opportunity last week and this week to meet with investors, we wanted to make sure that we are giving the most updated, appropriate guide and look forward. That's what we reflected last week. That's what we brought. We have a lot of confidence in the run rate of the business right now. Obviously, we disclosed in April a 0.6% on an April comp. So we guided 2.5%-3% last week, which the math implies that we're seeing acceleration in the business relative to April. We also want to make sure that everyone recognizes we determined that we were going to take any of the revenue attributed to the World Cup out of our guide. That decision was made based on seeing some less than optimized trends on the tourism rates in some of the cities that we have Shacks that are participating in the World Cup. To give a clean look at the business without any modeling that we've done around World Cup, we wanted to reflect that, and that's what this guide reflects. Any impact from World Cup would be additive to this guide. We chose not to put that in. On the year, we didn't change our comp guidance for the year. Comp guidance for the year has been low single digits. On the EBITDA side, it reflects the increase in some of the cost structure. Look, we could take more pricing to try to maintain margin, we are doing everything we can to be as competitive as we can in this marketplace. We feel like we've held the line on core pricing a lot more so than we have in the past. We do see this cost inflation, particularly the beef inflation, is ever-evolving. So we don't want to take a lot of price to mitigate short-term inflation that then puts us in a tough position where we're out ahead of pricing. That's been our decision. That is why the margin guide came down and commensurately the EBITDA guide. I would say, Mike, the only thing I'll close with, and let Michelle come in, I still feel great about 22%-23% restaurant operating margins. I know it's not where we thought we were going to be with all the great supply chain work that we've done and where we had forecasted beef prices to be. In this environment, where you've got a lot of incremental cost on fuel, we're seeing fuel surcharges in our supply chain, in our distribution network. The beef prices remain elevated. We've been able to still deliver 22%-23% margins. I can't give the team more credit. The work that they've done on the operations and the supply chain have really allowed us to continue to deliver best-in-class margins in an environment like this. Michelle, I don't know if you have anything to add to that. The only thing I'd add is when we look at our new Shack openings, we're still targeting approximately 16 in Q2 and didn't change our licensed openings. We're targeting eight there. When you look at the full year, we're still targeting 60-65 new Shack openings and licensed openings to be in the 40-45 range. We feel good about the number of new Shacks that we're opening as well as other performance. Our recent classes of new Shacks have been at our expectations. In addition to what Rob said, which is we think 22%-23% restaurant level margins is really healthy, we're really excited about the pipeline that we have and the new Shacks that we're opening, and those continuing to help us grow the top line as well. Makes a lot of sense. Sort of just sticking with guidance as a broader theme right now. I think last week you also talked about potentially changing the way you guide going forward. What are your thoughts on that? When can we expect to hear more? I think your 2027 targets are under review. What changed in that algorithm and how you're thinking about that as well? We're definitely assessing aspects of guidance. Rob and I have been discussing and us giving Mike quarterly guidance and the amount that we give is an anomaly in our industry. We're going to move away from that. When we do is still TBD, but as we go into 2027, we're going to be on an annual guidance cadence, and we'll talk about what that looks like in terms of the amount of guidance we give annually. I think we give a pretty robust set of guidance today, so we're going to assess the annual guidance, but we're going to be moving away from quarterly guidance. When we rip that Band-Aid off, if we do this year, is something Rob and I are still talking about and assessing. When we look at the long-term targets that we put out, and those, again, were from fiscal year 2025 to fiscal year 2027. We've been very open that we're assessing those as well. Part of that more has to do with what we just talked about on the margin side, which is Rob and I believe that 22%-23% is a healthy level of margins for this business. But as we look at how our new Shacks are going to be opening in the future and the rate and pace of those, we just want to make sure that we get that assessment done and that it's an appropriate time, considering we'd be going into the last year of those long-term targets. That's something we'll assess the remainder of this year and as we go into 2027. If those need to be updated, we'll give everyone an update on those as well. Yeah. Great. I just want to take a step back. Rob, since you joined, there's been a lot of changes, and that goes from strategy to marketing, management team. You really accomplished quite a bit over the last, say, two years or so. Now that you've had a chance to really dig in and you have this new team in place, what are the greatest opportunities that are still ahead of you for the company? Can you maybe split that into the near term, say, over the next 12 months and longer term over the next few years? Yeah. Look, the only thing that I don't love in our P&L right now, and frankly, in our company, is kind of our rate of G&A, right? To your point, we have invested a lot in the last two years to get to this point. We had to professionalize our operations. We had to professionalize our supply chain. We didn't have a procurement team two years ago, and now we do. They're driving huge amounts of value right now for us, and operations has step changed from where it was two years ago. Now, we need to maintain that given these ongoing challenges in the macro and the costs associated with them. We also need to make sure that we're driving two things, well, three things. One is, to Michelle's point, the new restaurant openings. We're really happy. It's a huge part of our model. We just want to make sure that we don't get out in front of our skis, and we continue to open these restaurants with excellence. Right? The last thing we want to do is, this will be the highest growth year we've had in a long time. It'll be by far the greatest number of company-operated Shacks that we've opened. When we talk about assessing things, we're not talking about there's a problem, we need to assess it. We're just talking about this is the first time we've opened up this number of Shacks, and there's some implications. Like in Q1, where we landed when we opened 16 Shacks this year versus four last year, there were some implications. Not necessarily huge negative implications, but things that we learned from that. We need to make sure that we're continuing to optimize the rate at which we open up our Shacks so that we can make sure we open them with excellence. The second thing is, I'm really impressed with the way the marketing team has been able to drive growth on this business without nearly as much pricing as we've leveraged in the past. We have three straight quarters of traffic growth. We hadn't had three straight quarters of traffic growth in a very long time. We have built a model that can help us control our comp and drive comp sales growth. We need to make sure we're doing that in the most efficient way, right? Because that's another G&A investment in our marketing and the infrastructure to support that. We need to make sure that we have the right balance of some of our new guest acquisition and trial-driving platforms, as well as our premium culinary differentiating LTOs. That's like the barbell, right? We're 135, which has now just transitioned to 246. That's driving a huge amount of traffic for our business, and it's bringing people in for the first time and increasing frequency as well. When they get in, we need to make sure that they see our LTOs and our premium sandwiches. We trade them up and deliver that differentiating experience that only Shake Shack can. That's the revenue model between the new Shacks and the marketing. Those are two things we're very focused on. Lastly, I've already signed up for and committed to G&A leverage in 2027. A lot of the work that goes into delivering that leverage next year is already kicking off and happening. And we need to do that in a way that's not disruptive to the revenue growth that we're seeing, but definitely allows us to leverage the infrastructure that we've built over the last two years in a more productive way. Those are kind of the three buckets, right? New restaurant delivered with excellence, continued comp growth, and G&A leverage. Yep. As we think about same-store sales, we kind of bring it back more to the near term here. In April, you were down slightly - 0.6, but the guidance for the second quarter that you changed last week is up 2.5%-3%. That implies that you're doing about a 4% for May and June combined, which is pretty good acceleration. I know it's below what you wanted to have originally, but still pretty healthy. With a couple of weeks left in this quarter, what drove that acceleration and giving you the confidence you're going to be in that two and a half to three range? I almost wouldn't even call it an acceleration. I would call it that April was a blip on the radar screen. I mean, we delivered between 4% and 5% comp for January, February, and March. This is just more consistent with the run rate the business was on. April, there were some nuanced, unique circumstances. We knew that wasn't going to be a high rate of sales month for us. Obviously we didn't want it to go negative, but it did. I wouldn't say that there's even an acceleration in the business. I would just say April was kind of a one-month situation. In order for us to deliver the 2.5% to 3%, like you said, we've got to deliver right around 4% for May, June. We obviously just guided there last week, we have a lot of confidence in our ability to do that. That guide is also reflective of us removing any volume that we had in our forecast from World Cup. If that comes through, great. What's in the guide today is reflective of our organic run rate on the business. Yep, makes sense. You touched on, I think it was in the press release as well, that competitive landscape, when you updated the guidance. Was there something that changed or why'd you feel compelled to call that out? No, I think we just have been calling that out every quarter. I don't think that it's new news to anybody that there is a lot of investment in driving traffic by pretty much every concept in the industry. It's been a competitive environment since the day one I got here. That was not any type of change to anything that we've been dealing with. It is a reason why we have chosen not to take as much pricing as we have in the past. When you think about the competitive environment, you've got these very large-scaled organizations doing $3 meals and $5 this. We could have chosen to take more pricing and mitigate some of this inflation in the short term, but we're thinking long term. We're building this model that is sustainable and durable for the long term. We are not just going to flippantly take pricing because of that competitive environment. Frankly, that's the way it should be. I think we all need to recognize that there's a return back pre-pandemic days where this business model, at least for us, when we talk about low single digits between 1%-3% annual growth rate, we need to mitigate inflation, but we need to grow our business with traffic. We've three straight quarters of traffic growth without having done that in a long time. This'll be our 22nd straight quarter of same-store sales growth. We have built a really solid model where we've proven we can drive growth through our new Shacks, we can drive comp growth, we can deliver best-in-class margins, and we're going to leverage the G&A line. I think everyone who's invested in us is going to be really happy with the EBITDA growth and is going to be really happy with what that model spits out. When Michelle talks about reassessing these things, it really is just about kind of getting back to the basics and just making sure that we are setting the expectations for a business that's really healthy and performing really well. We've had some challenges on some of the reactions to some of the results in the last couple, so far this year. You look at it on a go-forward basis, I'm really confident that we're going to perform as well as most brands, or better than most brands in the industry. That's kind of how we're thinking about it. Yeah. That's a good segue. As we go into the third quarter, your comparisons are a lot tougher. You had a big benefit last year from the Dubai Chocolate Shake. How do you think about lapping something like that when something goes viral? Do you simply run it again, you put some more marketing support behind it, or do you have new innovation that's coming that you think is going to help you sort of lap over that? Both of those are strategies that we can employ. It's not like we can't make Dubai shakes anymore. We've got that up our sleeve should we choose to pull that trigger. We also have some new innovation. I don't know if you guys saw, we had a viral Bundt Cake Shake this week, over the weekend. We're always coming up with new ideas that can drive that kind of infusion. Those are nice, and those get the brand out there. They also create, like you said, these kind of inflect, these kind of big laps that you have to kind of lap over. I want to make sure that the core business is healthy, right? That our burgers, fries, shakes, and drinks are just our primary driver of base growth in this industry. We'll sprinkle in these LTOs that can drive some brand heat. We always got to make sure we're executing our operations and our core food the best we can. That's really what's going to be the long-term driver of the continued revenue growth. Yeah. Sort of touching on that, your digital platform's really been an amazing catalyst for your business. I think you had 35% guest count growth last quarter from your digital platform. I know 135 moved to 246 now. You introduced the platform, I think it was last October. Has that continued to sort of grow, and do you think that's a growth driver moving forward, or have you sort of leveled off in terms of its mix? It continues to drive very significant traffic growth. It is a promotion, it's not our core pricing platform, so we can pull that back or change it at any time. We decided, given the cost dynamics that we're dealing with right now, we decided to move it to 246 on Friday. We're tracking that very closely. I'm very bullish that we're going to be able to continue to drive strong traffic with some improved cost economics around that platform. 246 is still a great deal for Shake Shack, and I think that we're going to continue to leverage that for a long time, and that's going to help us lap when we start lapping it in the back half of this year. Yep. Obviously we've talked about this a little bit, but you've heavily invested in marketing since you got on board, and you're at this new baseline of sales. You really only started paying for advertising, I think it was the third quarter of last year. Do you plan to expand the usage of that platform? Could we see you do regional TV advertising? I think you've tested that as well. Is it just going to be more targeted on the digital side? Yeah. We have shared that our goal is to be somewhere between 2.5%-3% of sales on advertising. Today, we're at the low end of that range. Although we've increased the investment in advertising and marketing pretty significantly year-over-year, we're still at the lower range for a lot of our peers, right? There's still an opportunity to invest more, but I'm not going to do that until we are able to make sure that we are getting best-in-class returns. I love what we've done in our marketing and media investments. They've driven the traffic over the last three quarters since we started investing. I think about marketing the same way I think about digital and tech, the same way I think about our investment in our restaurants. They're all investments. They all have to deliver a set return, we will invest more as our returns continue to get better. Right now, we're happy with the returns, we're happy with the way it's impacting our business and helping us to drive comp in this environment. For us to invest more, it's just going to require better returns because it's going to have to drive even more revenue because I'm going to get leverage on the G&A line. As you know, the marketing on our business falls into G&A. We're at high 12%-ish. Two and a half of that is marketing. If we're going to invest, it's got to disproportionately drive the top line. Yep. As we turn over to margins, I think the guidance still implies 200-300 basis points better margins in 2026 than just three years ago. Obviously there's some near-term challenges with beef and fuel surcharges. I think you also mentioned some middle-of-the-P&L cost headwinds. Maybe what are those, if they're different, and is that isolated to the near term? Is that something that's going to keep going forward from here? Yeah. There's three big buckets in a restaurant P&L, right? There's the labor line, there's the COGS line, there's the OpEx line. I think we've done a huge amount of heavy lifting optimizing our labor. It's not just taking the labor out, it's about making sure that we are managing our labor much better. That has happened, we are running great rate of labor on our business. I'm not asking the team to pull labor out. Stephanie, our COO, is not asking the team to pull labor out. We're really happy with where we are on the labor. On the COGS line, obviously, we've talked a lot about it, right? We have mitigated a huge amount. This isn't the first year beef prices have been high. Last year they were high, too. We went from sub 5% I think in 2023, just creeping over I'm sorry, sub $5 in 2023 creeping over and continuing to accelerate in 2024 last year. We're kind of at the peak of it right now. I think if you look back at the history, you would've thought that the supply would've caught up by now, and it's not. We're preparing accordingly for that. We're making sure that we are continuing to do everything possible to operate this business as efficiently as we can. It's on the food ingredients, but it's also on our cleaning supplies. It's on our services that are provided to our Shacks. It's on our tech. Everything that goes into the COGS from a food standpoint, but also everything, the OpEx is tech, it's cleaning, it's R&M, all the things that go into the day-to-day maintenance of our Shacks. We're looking at all those things, and we're trying to get more productive and more efficient across all of it so that we can continue to deliver these best-in-class margins, despite the headwinds that we face. Yeah. Not withstanding the near-term beef and fuel surcharges, you're obviously doing a lot of supply chain, like you just said. Are those benefits that carry over into 2027, or is there anything that keeps them sort of isolated to this year? No. We don't have any initiatives that are intended to drive some short-term cost out of the P&L. Everything we're doing and everything we do every day is focused on the long term. We are not going to compromise the quality of our ingredients. We're not going to compromise the quality of our team member or guest experience. We're continuing to invest in making sure we're delivering the Shake Shack experience, but we just need to continue to explore ways that we can do it more productively. I don't have a crystal ball to understand what's around the corner and what's going to impact us next, but right now, the initiatives that we are working on are all sustainable, durable initiatives that should continue to foster a really healthy restaurant P&L. Yeah. We're going to shift over to unit growth. You're planning to grow 60-65 units this year. Your original comments were to increase that rate next year. I know everything's under review, maybe just help us understand your people pipeline. You have a new unit task force as well, how comfortable you are with the rate of growth. Yeah. I would tell you that our operations is in the best place it's been in a long time. That gives me a lot of confidence that we're able to support new unit growth. It really just comes down to what we feel is the right rate. The fastest isn't always the best. It's about durable, continuous excellence of execution, right? We want to make sure that we have the right model in place that can support fantastic new Shack openings, then really deliver the kind of best-in-class returns that we expect, right? We've guided to 30% + cash on cash and three-year payback. That is a really, really strong model in this industry, we just want to make sure that we continue to deliver that, and balance the returns and balance the operational excellence with the rate of growth. Yep. Obviously you've talked about leveraging your G&A a couple of times here in 2027. You made a lot of big investments in between the management team and technology, then also things like marketing. I'm sure Michelle has it all figured out after a month on the job. I'd just love to hear. You'd be surprised, Mike, how much she has figured out after a month on the job. It's kind of amazing. We're looking forward to hearing all of it. Can you just talk about maybe how you're thinking about G&A moving forward? I know you're not ready to give numbers yet, but just maybe qualitatively where you're sort of done with the investment cycle, what you still need to invest in, and where do you think you're going to get some of this leverage from? We're going to continue to grow rapidly, right? It's not like we aren't going to need more general managers to open our restaurants or more area directors to oversee those restaurants, but I think we can do it a lot more efficiently. Some of the investments that we've made, particularly on the AI side, allow everyone in our company, whether you're at headquarters or you're out in the field, to have access to data in a much faster, more reliable way. Right? Our AI platform that we've built over the last six months, we used to have our data in a lot of different places. If you're finance, you might be looking at this set of data. If you're operations, you're looking at this set. If you're supply chain, you're looking at this set. Over the last six months, we've consolidated all of those data sources. Now we have a data stack that sits all together, integrated, and regardless of whether you're in our restaurants or in our offices, when you need data, you can get it. Our ADs typically manage between eight and 10 restaurants. They used to spend a whole day pulling reports so that they can go in and meet with their general managers and walk through their performance and do an accountability review. Now all that just happens. With the AI platform we've put in, we have taken the amount of administrative time for our operators down dramatically. That's just one example. For the GMs in particular, if something broke in the past, you used to have to get on a call or send an email and wait for somebody to respond and get your part or your equipment or what have you. Now everything is embedded into our AI platform that the GMs have to manage their business. If they need training materials, if they need anything. The point I'm making is all of that improves productivity in the operations, particularly the above restaurant operations. As we continue to grow, we should find a fair amount of leverage there. Obviously as we grow revenue with these Shacks, if we grow revenue faster than we grow Shacks, we're going to get some leverage there as well. If we grow revenue faster, we're definitely committed to we've already built the supply chain group, I've built the operations group, I've built the marketing team. As we grow revenue, there's going to be leverage there. Yep. We've got about a minute left, I just want to end with an open mic for you on the consumer. I'd just love to hear your thoughts. You have a pretty diverse business, not only domestically, but internationally. We'd just love to hear sort of your thoughts on what you're seeing maybe around the country, if there's an income cohort difference, just anything. Gas price is obviously a huge topic with restaurants. Just how do you think about that impact on your business? Yeah. I have been really pleased with the durability and sustained run rates on this business. We already talked, April was a bit of a blip, we have continued to perform, I think it is a function of us striking the right balance between premium and new guest acquisition some of the promotions that we use to do that. Our business is a little bit insulated from some of the gas prices. Not wholly insulated. We see it on the cost side. We also see it in the macros, traffic is down as a whole if you're looking at the Placer.ai data. I'm not speaking just to our traffic, I'm speaking to the industry traffic. We've been able to drive traffic growth, we've been able to do it in a way that has been profitable. Our restaurant operating margins, although we got it down, are still really strong. We have a ton of confidence in our business model with our guests, which are a little bit insulated relative to QSR, that we can continue to drive traffic with what we have coming in the back half of the year heading into 2027. At some point, the beef situation has to turn, at that point, we'll be able to make a determination on whether or not we flow that improved cost structure into our margins, we reinvest it to drive even faster growth. Yeah, we love the durability of this business, the resiliency. I've been here two years, from day one, everyone said, "Well, it's a value orientation in this industry, and Shake Shack isn't set up to perform in that." We've had two of the best years in the company's history in terms of margin improvement and revenue growth. We're really excited looking forward. Awesome. Well, with that, we're out of time. I'd like to once again thank Rob and Michelle from Shake Shack for joining us today, everybody have a great day. Thank you, Mike. Thanks, Mike. Thanks, Michelle.