A：The company is proud of its third quarter results, which showcase foundational work positioning the company for growth and achievement of long-term goals. Key achievements include building a resilient, long-term business; strategic investments for long-term success; executing the deliver strategy; stronger team retention; better guest service; operational improvements; productivity; a steady cadence of culinary innovation; and the foundation of a brand marketing model.

A：Michael Fanuel has been appointed as the chief brand officer. In this role, he will oversee advertising, paid media, and insights and analytics, working closely with the broader team to advance the company's marketing strategy and steward the brand in the marketplace.

A：The company has implemented a new activity-based labor model moving away from a sales-based model. This change, along with streamlining labor hours deployment, has improved operational efficiency. Labor targets were met or beaten in the third quarter, and the company is focusing on supporting managers with tools, data, and analytics to optimize operations and hospitality.

A：The company has seen improvements in team member retention, with a focus on creating an environment where team members can grow and succeed. Team members are showing improved throughput across all day parts, and retention is included as a key metric on the operator scorecard. There has been a focus on training and development to build a more tenured team.

A：Guest satisfaction has improved across several metrics such as speed of service, taste, cleanliness of shacks, and likelihood to return. The company is committed to guest satisfaction and continues to find ways to support team members to maintain high levels without compromising on their well-being.

A：The company is diversifying its supplier base and footprint, optimizing logistics, and investing in technologies to support the supply chain. Planned savings in the supply chain and operational improvements help offset the impact of beef inflation without significant price increases. The company is also working on equipment innovations to improve product quality and consistency.

A：The company is working on delivering a best-in-class loyalty platform in 2026 and is currently leveraging the app with value and frequency offers. This has seen success, with app downloads being approximately 50% more this year than last. The app guests have higher frequency and lifetime value than non-digital guests.

A：The made-to-order model allows the company to deliver food that other quick-service restaurants and even fast-casual concepts cannot easily replicate. With an unprecedented cadence of innovation, the company is growing its beverage business and aims to significantly grow its presence in the shake innovation space, drawing inspiration from global recipes, seasonal occasions, and unique flavor trends.

A：The new offerings and innovations in the shake line include new 'crackable shake' items as well as a new 'summer barbecue' menu which features items like a limited-time French on Super Burger and a test market baby back rib sandwich.

A：Menu improvements and advertising investments have had a positive impact on sales, as evidenced by the strong sales growth and traffic from LTOs such as the Dubai Chocolate Chi, dollar soda, and app-only promotions, and the success of investments in paid media which has led to sales growth.

A：The new advertising strategy and brand positioning are significant as they are set to bring the brand story to life through partnerships with a highly acclaimed creative agency. This is part of the ongoing efforts to serve guests better and prepare for brand amplification.

A：The company expects to open at least 65 to 70 new shacks in 2026 and has plans for 40 to 45 new licensed partnerships, with a current progress of 23 new store openings and well on track for 35 to 40 openings in the year.

A：The company is planning to mitigate macroeconomic challenges by continuing to develop traffic-driving LTOs, improving operations and the core menu, focusing on new kitchen prototypes and equipment to improve throughput and quality, and by enhancing the digital business. Additionally, new advertising will support the business and a strong value platform, loyalty program, and delivery business will be delivered.

A：The company's focus on strategic priorities has performed well despite macro challenges, as evidenced by the quarterly results that reflect solid momentum and execution across both the company-operated and license businesses. The team has made significant progress on the plan laid out at the beginning of 2025.

A：The company delivered 4.9% positive same Shack sales growth, a 390 basis point improvement from the first half of 2025. The restaurant level profitability grew to 80.6 million, reaching 22.8% of Shack sales, a 180 basis point improvement over last year, driven by operational efficiencies and strategic initiatives.

A：The company's financial performance has been impacted by menu price increases and commodity inflation with menu prices up approximately 2% and food and paper costs up 110 basis points versus last year. However, supply chain strategies have mitigated some of the impact, resulting in mid single digits inflation for the third quarter and a low single digit net impact expected for the fourth quarter.

A：Labor costs and operating expenses have changed with labor and related expenses down 310 basis points year over year and other operating expenses up 30 basis points year over year. These changes are attributed to continued operational efficiencies, improved retention, gains in throughput, and higher digital sales.

A：The company grew operating cash flow by 50% year over year to 63 million.

A：The company is taking steps to mitigate the impact of macro headwinds and increased marketing investment. They are also looking to optimize cost structure, adding more suppliers, ensuring multiple sources of supply on critical items, and ensuring the right suppliers are in place to manage the challenging market.

A：The company is committed to delivering the same quality that has established their reputation for culinary excellence. They go through a thorough testing and validation process with new suppliers to ensure the quality meets or exceeds past standards across the entire supply chain.

A：The company has started to roll out material cost savings in the fourth quarter and expects it to build into next year. They anticipate that the positive effect of cost mitigation will grow into the following year, especially considering the historically used response of adjusting prices to offset cost pressures in the beef market.

A：The company took on the challenges of the macroeconomic climate and incorporated them into their strategy. They leveraged in-app value promotions and shifted marketing to that platform, resulting in a dramatic change in the trajectory of their business with over 80% growth in app traffic and sales.

A：The French Onion LTO did not perform as expected, and the company ran analytics to understand the challenges. They attributed the issue to the current market pressures and adjusted their marketing strategy to focus on in-app value promotions, which positively affected their business trajectory.

A：The company is focusing on maintaining a balance between its premium and value offerings. They continue to offer great culinary innovation in the premium space but also provide a value offering that is attractive to guests and accretive to the company's financial performance. This balance is expected to drive the performance and deliver strong results in the fourth quarter.

A：The new 1, 3, 5 value proposition is extremely impactful, as per the speaker's data, and is expected to be beneficial for the company through the remainder of the quarter and into the next year.

A：Improvements have been seen in the guest experience, quality, and maybe taste metrics in addition to the reduction in average ticket times.

A：The company's operations team is engaged in quarterly business planning, focusing on closing the year strongly and building a talent pipeline for opening 60 new shacks next year. The operations team is operating at a high level, emphasizing a mindset and culture that drive continuous improvement.

A：Operators are focused on improving service to guests, increasing speed, optimizing labor deployment, and extending hours where appropriate. There is an emphasis on positive service and pride in performance.

A：The uptick in quarterly spend is attributed to meaningful investments in marketing and media to support the new value proposition strategy, which is expected to drive traffic, sales, and profitability.

A：Efforts to improve service speed include minimizing tickets over 7 minutes to avoid guest frustration. The ideal service speed is currently targeted to be around 5 to 6 minutes, avoiding the danger zone of 8 to 10-minute orders.

A：The company plans to keep core menu prices low by becoming more efficient in the supply chain and operations, allowing consumers to self-select into higher price points for premium items while driving check growth. The company is also being judicious in pricing premium innovations, as demonstrated by a big innovation that will be introduced in the next couple of weeks with an aggressive price point.

A：The company expects to continue expanding restaurant margins, consistent with their three-year outlook. They plan to achieve 50 basis points of restaurant margin expansion per year, with much of it coming from supply chain savings and the natural leverage of growing the business. They anticipate beef prices to still be a pressure but are working with suppliers to navigate the environment without relying heavily on price increases to offset the beef market.

A：The company plans to achieve continued margin expansion next year through an accelerating path of supply chain savings and commodity items moving more favorable in the basket. They expect beef prices to remain a pressure but are working with suppliers to meet objectives and provide continued margin expansion without relying significantly on price.

A：An untapped opportunity for the company is equipment innovation. They have built an equipment innovation center in Atlanta and are developing a standardized kitchen model that leverages equipment to increase team efficiency, ease execution of the model, and deliver higher quality hot items faster.

A：The loyalty platform is expected to increase frequency, and the current strategy with 135, downloads, and adoption will transfer into a built-in user base for the loyalty platform. This will enable leveraging the platform to drive frequency among valuable guests. Advertising will bring people in with new innovation and value platforms, and as they transition into the loyalty program, it will help drive frequency.

A：The company plans to provide guidance on 2026 in January and indicates that paid media, which is the fuel driving the comps, will continue to be a focus. The uptick in marketing spend is anticipated to be sustained into 2026, and the guidance provided in January will give a better understanding of the marketing investments and their expected returns.

A：The company is taking advantage of the competitive challenges faced by others in the market to gain market share. They are executing their model in the midst of the discounting promotional environment and delivering out-paced results. They are continuously learning, improving, and refining their strategies to target the best price points and to optimize their plans. They also have a flexible business model that allows them to quickly adapt and shift to higher return initiatives, and they have a detailed plan for 2026 that includes new launches and optimization based on ongoing results and the competitive environment.