TableofContents

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q(Mark One)

þþQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2017OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the transition period from _______ to ______

Commissionfilenumber:001-36823

SHAKE SHACK INC.(Exactnameofregistrantasspecifiedinitscharter)

Delaware 47-1941186

(Stateorotherjurisdictionofincorporationororganization)

(IRSEmployerIdentificationNo.)

24 Union Square East, 5th FloorNew York, New York 10003

(Addressofprincipalexecutiveoffices) (ZipCode)

(646) 747-7200(Registrant'stelephonenumber,includingareacode)

Not applicable(Formernameorformeraddress,ifchangedsincelastreport)

Indicatebycheckmarkiftheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.þYesoNo

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule-405ofRegulationS-Tduringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).þYesoNo

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growthcompany. See thedefinitionsof"largeacceleratedfiler,""acceleratedfiler,""smallerreportingcompany,"and"emerginggrowthcompany"inRule12b-2oftheExchangeAct.

Large acceleratedfiler o Acceleratedfiler þ

Non-acceleratedfiler o (Donotcheckifasmallerreportingcompany) Smallerreportingcompany o

Emerginggrowthcompany þ

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any newor revised financial accountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.þ

Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheAct).oYesþNo

AsofOctober25,2017,therewere26,195,741sharesofClassAcommonstockoutstandingand10,534,792sharesofClassBcommonstockoutstanding.

SHAKE SHACK INC.TABLE OF CONTENTS

Cautionary Note Regarding Forward-Looking Information 1

Part I 2 Item1. FinancialStatements(Unaudited) 2 Item2. Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations 26 Item3. QuantitativeandQualitativeDisclosuresAboutMarketRisk 39 Item4. ControlsandProcedures 39

Part II 40 Item1. LegalProceedings 40 Item1A. RiskFactors 40 Item2. UnregisteredSalesofEquitySecuritiesandUseofProceeds 40 Item3. DefaultsUponSeniorSecurities 40 Item4. MineSafetyDisclosures 40 Item5. OtherInformation 40 Item6. Exhibits 41

SIGNATURES 42

TableofContents

Cautionary Note Regarding Forward-Looking InformationThisQuarterlyReportonForm10-Q("Form10-Q")containsforward-lookingstatements,withinthemeaningofthePrivateSecuritiesLitigationReformActof1995("PSLRA"),whicharesubjecttoknownandunknownrisks,uncertaintiesandotherimportantfactorsthatmaycauseactualresultstobemateriallydifferent.Allstatementsotherthanstatementsofhistoricalfactareforward-lookingstatements.Manyoftheforward-lookingstatementsarelocatedinPartI,Item2ofthisForm10-Qundertheheading"Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations."Forward-lookingstatementsdiscussourcurrentexpectationsandprojectionsrelatingtoourfinancialposition,resultsofoperations,plans,objectives,futureperformanceandbusiness.Youcanidentifyforward-lookingstatementsbythefactthattheydonotrelatestrictlytohistoricalorcurrentfacts.Thesestatementsmayincludewordssuchas"aim,""anticipate,""believe," "estimate," "expect," "forecast," "outlook," "potential," "project," "projection," "plan," "intend," "seek," "may," "could," "would," "will," "should,""can,""canhave,""likely,"thenegativesthereofandothersimilarexpressions.

Whilewebelievethatourassumptionsarereasonable,itisverydifficulttopredicttheimpactofknownfactors,anditisimpossibletoanticipateallfactorsthatcould affect our actual results. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate allforward-lookingstatementsmadeinthisForm10-QinthecontextoftherisksanduncertaintiesdisclosedinPartI,Item1AofourAnnualReportonForm10-Kfor the fiscal year ended December 28, 2016 , as amended, and subsequent Quarterly Reports on Form 10-Q filed with the U.S. Securities and ExchangeCommission(the"SEC")undertheheading"RiskFactors."

The forward-looking statements included in this Form10-Qare made only as of the date hereof. Weundertake no obligation to publicly update or revise anyforward-lookingstatementasaresultofnewinformation,futureeventsorotherwise,exceptasotherwiserequiredbylaw.

Shake Shack Inc. Form10-Q|1

TableofContents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

PageCondensedConsolidatedBalanceSheets 3CondensedConsolidatedStatementsofIncome 4CondensedConsolidatedStatementsofComprehensiveIncome 5CondensedConsolidatedStatementofStockholders'Equity 6CondensedConsolidatedStatementsofCashFlows 7NotestoCondensedConsolidatedFinancialStatements 8

2|Shake Shack Inc. Form10-Q

TableofContents

SHAKE SHACK INC.CONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)(in thousands, except share and per share amounts)

September 27

2017 December 28

2016

ASSETS Currentassets: Cashandcashequivalents $ 26,887 $ 11,607

Marketablesecurities 63,299 62,040

Accountsreceivable 5,139 6,006

Inventories 1,127 806

Prepaidexpensesandothercurrentassets 2,057 3,485

Totalcurrentassets 98,509 83,944

Propertyandequipment,net 174,689 136,264

Deferredincometaxes,net 322,224 313,207

Otherassets 4,515 4,779

TOTAL ASSETS $ 599,937 $ 538,194

LIABILITIES AND STOCKHOLDERS' EQUITY Currentliabilities: Accountspayable $ 8,639 $ 6,921

Accruedexpenses 13,181 8,538

Accruedwagesandrelatedliabilities 5,127 6,084

Othercurrentliabilities 9,817 10,173

Totalcurrentliabilities 36,764 31,716

Deemedlandlordfinancing 13,162 2,007

Deferredrent 34,780 31,107

Liabilitiesundertaxreceivableagreement,netofcurrentportion 280,820 267,902

Otherlong-termliabilities 2,633 4,109

Totalliabilities 368,159 336,841

Commitmentsandcontingencies Stockholders'equity:

Preferredstock,noparvalue—10,000,000sharesauthorized;noneissuedandoutstandingasofSeptember27,2017andDecember28,2016. — —

ClassAcommonstock,$0.001parvalue—200,000,000sharesauthorized;26,161,111and25,151,384sharesissuedandoutstandingasofSeptember27,2017andDecember28,2016,respectively. 26 25

ClassBcommonstock,$0.001parvalue—35,000,000sharesauthorized;10,567,792and11,253,592sharesissuedandoutstandingasofSeptember27,2017andDecember28,2016,respectively. 11 11

Additionalpaid-incapital 147,890 135,448

Retainedearnings 28,862 16,719

Accumulatedothercomprehensiveincome(loss) 30 (15)

Totalstockholders'equityattributabletoShakeShackInc. 176,819 152,188

Non-controllinginterests 54,959 49,165

Totalequity 231,778 201,353

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 599,937 $ 538,194

See accompanying Notes to Condensed Consolidated Financial Statements.

Shake Shack Inc. Form10-Q|3

TableofContents

SHAKE SHACK INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)(in thousands, except per share amounts)

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27

2017 September 28

2016 September 27

2017 September 28

2016

Shacksales $ 91,100 $ 71,871 $ 253,258 $ 188,430

Licensingrevenue 3,509 2,696 9,416 6,774

TOTAL REVENUE 94,609 74,567 262,674 195,204

Shack-leveloperatingexpenses: Foodandpapercosts 25,760 20,393 71,646 53,529

Laborandrelatedexpenses 23,806 18,216 66,692 46,640

Otheroperatingexpenses 9,229 6,577 25,380 17,475

Occupancyandrelatedexpenses 7,522 6,009 20,741 15,541

Generalandadministrativeexpenses 9,204 7,885 27,352 22,265

Depreciationexpense 5,604 3,719 15,610 10,229

Pre-openingcosts 2,670 2,598 6,961 6,708

Lossondisposalofpropertyandequipment 204 — 317 —

TOTAL EXPENSES 83,999 65,397 234,699 172,387

OPERATING INCOME 10,610 9,170 27,975 22,817

Otherincome,net 229 151 622 197

Interestexpense (475) (89) (1,144) (267)

INCOME BEFORE INCOME TAXES 10,364 9,232 27,453 22,747

Incometaxexpense 2,494 2,443 7,537 6,058

NET INCOME 7,870 6,789 19,916 16,689

Less:netincomeattributabletonon-controllinginterests 2,873 3,023 7,773 8,163

NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC. $ 4,997 $ 3,766 $ 12,143 $ 8,526

EarningspershareofClassAcommonstock: Basic $ 0.19 $ 0.16 $ 0.47 $ 0.38

Diluted $ 0.19 $ 0.15 $ 0.46 $ 0.37

Weighted-averagesharesofClassAcommonstockoutstanding: Basic 26,024 24,023 25,733 22,310

Diluted 26,477 24,554 26,248 22,805

See accompanying Notes to Condensed Consolidated Financial Statements.

4|Shake Shack Inc. Form10-Q

TableofContents

SHAKE SHACK INC.CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(UNAUDITED)(in thousands)

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27

2017 September 28

2016 September 27

2017 September 28

2016

Netincome $ 7,870 $ 6,789 $ 19,916 $ 16,689

Othercomprehensiveincome(loss),netoftax: Available-for-salesecurities(1): Changeinnetunrealizedholdinggains(losses) 53 (11) 36 (19)

Less:reclassificationadjustmentsfornetrealizedlossesincludedinnetincome 14 3 28 3

Netchange 67 (8) 64 (16)

OTHER COMPREHENSIVE INCOME (LOSS) 67 (8) 64 (16)

COMPREHENSIVE INCOME 7,937 6,781 19,980 16,673

Less:comprehensiveincomeattributabletonon-controllinginterest 2,893 3,020 7,792 8,157

COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAKESHACK INC. $ 5,044 $ 3,761 $ 12,188 $ 8,516

(1) Net of tax benefit (expense) of $0 for the thirteen and thirty-nine weeks ended September 27, 2017 andSeptember 28, 2016 .

See accompanying Notes to Condensed Consolidated Financial Statements.

Shake Shack Inc. Form10-Q|5

TableofContents

SHAKE SHACK INC.CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY(UNAUDITED)(in thousands, except share amounts)

Class A

Common Stock Class B

Common Stock AdditionalPaid-InCapital

RetainedEarnings

Accumulated

OtherComprehensive

Income (Loss)

Non-Controlling

Interest

Total

Equity Shares Amount Shares Amount BALANCE, DECEMBER 28, 2016 25,151,384 $ 25 11,253,592 $ 11 $ 135,448 $ 16,719 $ (15) $ 49,165 $201,353 Netincome 12,143 7,773 19,916

Othercomprehensiveincome:

Netunrealizedgainsrelatedtoavailable-for-salesecurities 45 19 64

Equity-basedcompensation 3,909 3,909

Activityunderstockcompensationplans 323,927 1 3,580 2,670 6,251

RedemptionofLLCInterests 685,800 — (685,800) — 2,883 (2,883) —

Establishmentofliabilitiesundertaxreceivableagreementandrelatedchangestodeferredtaxassetsassociatedwithincreasesintaxbasis 2,070 2,070

Distributionspaidtonon-controllinginterestholders (1,785) (1,785)

BALANCE, SEPTEMBER 27, 2017 26,161,111 $ 26 10,567,792 $ 11 $ 147,890 $ 28,862 $ 30 $ 54,959 $231,778

See accompanying Notes to Condensed Consolidated Financial Statements.

6|Shake Shack Inc. Form10-Q

TableofContents

SHAKE SHACK INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)(in thousands)

Thirty-Nine Weeks Ended

September 27

2017 September 28

2016

OPERATING ACTIVITIES Netincome(includingamountsattributabletonon-controllinginterests) $ 19,916 $ 16,689

Adjustmentstoreconcilenetincometonetcashprovidedbyoperatingactivities Depreciationexpense 15,610 10,229

Equity-basedcompensation 3,823 3,817

Deferredincometaxes 3,056 121

Non-cashinterestexpense 245 211

Excesstaxbenefitsonequity-basedcompensation — (35)

Lossonsaleofmarketablesecurities 27 3

Lossondisposalofpropertyandequipment 317 —

Changesinoperatingassetsandliabilities: Accountsreceivable 5,628 1,365

Inventories (321) (285)

Prepaidexpensesandothercurrentassets 1,844 196

Otherassets (516) (768)

Accountspayable 536 (53)

Accruedexpenses 4,455 4,503

Accruedwagesandrelatedliabilities (957) (493)

Othercurrentliabilities (1,544) 1,448

Deferredrent 702 3,863

Otherlong-termliabilities 1,150 (289)

NET CASH PROVIDED BY OPERATING ACTIVITIES 53,971 40,522

INVESTING ACTIVITIES Purchasesofpropertyandequipment (41,179) (39,268)

Purchasesofmarketablesecurities (6,675) (60,566)

Salesofmarketablesecurities 6,399 498

NET CASH USED IN INVESTING ACTIVITIES (41,455) (99,336)

FINANCING ACTIVITIES Paymentsonpromissorynote — (313)

Proceedsfromdeemedlandlordfinancing 530 —

Paymentsondeemedlandlordfinancing (154) —

Distributionspaidtonon-controllinginterestholders (2,392) (1,602)

Paymentsundertaxreceivableagreement (1,471) —

Proceedsfromstockoptionexercises 6,567 2,072

Employeewithholdingtaxesrelatedtonetsettledequityawards (316) —

Excesstaxbenefitsfromequity-basedcompensation — 35

NET CASH PROVIDED BY FINANCING ACTIVITIES 2,764 192

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 15,280 (58,622)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 11,607 70,849

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 26,887 $ 12,227

See accompanying Notes to Condensed Consolidated Financial Statements.

Shake Shack Inc. Form10-Q|7

TableofContents

SHAKE SHACK INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(in thousands, except share and per share amounts)

PageNote1 NatureofOperations 9Note2 SummaryofSignificantAccountingPolicies 9Note3 FairValueMeasurements 13Note4 Inventories 15Note5 PropertyandEquipment 16Note6 SupplementalBalanceSheetInformation 16Note7 Debt 16Note8 Non-ControllingInterests 17Note9 Equity-BasedCompensation 18Note10 IncomeTaxes 19Note11 EarningsPerShare 21Note12 SupplementalCashFlowInformation 22Note13 CommitmentsandContingencies 23Note14 RelatedPartyTransactions 24

8|Shake Shack Inc. Form10-Q

TableofContents

NOTE 1: NATURE OF OPERATIONS

Shake Shack Inc. ("we," "us," "our," "Shake Shack" and the "Company") was formed on September 23, 2014 as a Delaware corporation for the purpose offacilitatinganinitialpublicofferingandotherrelatedtransactionsinordertocarryonthebusinessofSSEHoldings,LLCanditssubsidiaries("SSEHoldings").OnFebruary4,2015,wecompletedaninitialpublicoffering("IPO")of5,750,000sharesofourClassAcommonstockatapublicofferingpriceof$21.00pershare.WeusedthenetproceedsfromtheIPOtopurchasenewly-issuedmembershipinterestsfromSSEHoldings("LLCInterests").FollowingtheorganizationaltransactionscompletedinconnectionwiththeIPO,webecamethesolemanagingmemberofSSEHoldings.Assolemanagingmember,weoperateandcontrolallofthebusinessandaffairsofSSEHoldingsand,asaresult,consolidatethefinancialresultsofSSEHoldings.Wereportanon-controllinginterestrepresentingtheeconomicinterestinSSEHoldingsheldbytheothermembersofSSEHoldings.AsofSeptember27,2017weowned71.2%ofSSEHoldings.Unlessthecontextotherwiserequires,"we,""us,""our,""ShakeShack,"the"Company"andothersimilarreferences,refertoShakeShackInc.and,unlessotherwisestated,allofitssubsidiaries,includingSSEHoldings.

WeoperateandlicenseShakeShackrestaurants("Shacks"),whichservehamburgers,chickensandwiches,hotdogs,crinkle-cutfries,shakes,frozencustard,beer,wineandmore. AsofSeptember 27, 2017 , there were143Shacks in operation, system-wide, of which79weredomestic company-operated Shacks,10weredomesticlicensedShacksand54wereinternationallicensedShacks.

NOTE 2 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of PresentationThe accompanying unaudited condensed consolidated financial statements include the accounts of Shake Shack Inc. and its subsidiaries. All intercompanyaccountsandtransactionshavebeeneliminatedinconsolidation.TheseinterimcondensedconsolidatedfinancialstatementshavebeenpreparedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica("GAAP")andonabasisconsistentinallmaterialrespectswiththeaccountingpoliciesdescribedinourAnnualReportonForm10-KforthefiscalyearendedDecember28,2016,asamended("2016Form10-K").Inouropinion,alladjustments,which are normal and recurring in nature, necessary for a fair presentation of our financial position and results of operation have been included. Certainreclassifications have been made to prior period amounts to conformto the current year presentation. Operating results for interim periods are not necessarilyindicativeoftheresultsthatmaybeexpectedforafullfiscalyear.

TheaccompanyingCondensedConsolidatedBalanceSheetasofDecember28,2016hasbeenderivedfromtheauditedfinancialstatementsatthatdatebutdoesnot include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with theconsolidatedfinancialstatementsandrelatednotestheretoincludedinour2016Form10-K.

SSE Holdings is considered a VIE. Shake Shack Inc. is the primary beneficiary as we have the majority economic interest in SSE Holdings and, as the solemanagingmember,havedecisionmakingauthoritythatsignificantlyaffectstheeconomicperformanceoftheentity,whilethelimitedpartnershavenosubstantivekick-outorparticipatingrights.Asaresult,weconsolidateSSEHoldings.TheassetsandliabilitiesofSSEHoldingsrepresentsubstantiallyallofourconsolidatedassetsandliabilitieswiththeexceptionofcertaindeferredtaxesandliabilitiesundertheTaxReceivableAgreement.AsofSeptember27,2017andDecember28,2016,thenetassetsofSSEHoldingswere$189,581and$158,845,respectively.TheassetsofSSEHoldingsaresubjecttocertainrestrictionsinSSEHoldings'revolvingcreditagreements.SeeNote7formoreinformation.

Shake Shack Inc. Form10-Q|9

TableofContents

Fiscal YearWeoperateona52/53weekfiscalyearendingonthelastWednesdayinDecember.Fiscal2017contains52weeksandendsonDecember27,2017.Fiscal2016contained52weeksandendedonDecember28,2016.Unlessotherwisestated,referencestoyearsinthisreportrelatetofiscalyears.

Use of EstimatesThe preparation of these condensed consolidated financial statements in conformity with GAAPrequires us to make estimates and assumptions that affect thereportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedateofthefinancialstatements,andthereportedamountsofsalesandexpensesduringthereportingperiod.Actualresultscoulddifferfromthoseestimates.

Recently Adopted Accounting Pronouncements We adopted the Accounting Standards Updates (“ASUs”) summarized below in fiscal 2017. The effects of adoption did not have a material impact on ourconsolidatedfinancialstatements.

Accounting StandardsUpdate (“ASU”) Description

DateAdopted

ImprovementstoEmployeeShare-BasedPaymentAccounting(ASU2016-09)

This standard simplifies certain aspects of accounting for share-based payment transactions, including the income taxconsequences,classificationofawardsaseitherequityorliabilities,certainclassificationsonthestatementofcashflows,andanoptiontorecognizegrossstockcompensationexpensewithactualforfeituresrecognizedastheyoccur.Uponadoption,wemadesuchpolicyelection.Theadoptionmethodologyappliedvariedbasedoneachapplicableprovisionofthestandard,andnoneoftheprovisionshadamaterialimpactonourconsolidatedfinancialstatements.

December29,2016

SimplifyingtheMeasurementofInventory(ASU2015-11)

This standard applies to inventory measured using methods other than last-in, first-out (LIFO) or the retail method, andrequiresentitiestomeasuresuchinventoryatthelowerofcostornetrealizablevalue.Itwasappliedprospectively.

December29,2016

Recently Issued Accounting Pronouncements

10|Shake Shack Inc. Form10-Q

TableofContents

Accounting StandardsUpdate (“ASU”) Description Expected Impact Effective Date

StatementofCashFlows:ClassificationofCertainCashReceiptsandPayments(ASU2016-15)

Thisstandardprovidesguidanceoneightspecificcashflowissueswiththeobjectiveofreducingdiversityinpractice.Itshouldbeappliedretrospectivelytoeachperiodpresented,subjecttocertainconditions.

Wearecurrentlyevaluatingtheimpactthisstandardwillhaveonourconsolidatedfinancialstatements.

December28,2017

Shake Shack Inc. Form10-Q|11

TableofContents

Accounting StandardsUpdate (“ASU”) Description Expected Impact Effective Date

RecognitionandMeasurementofFinancialAssetsandFinancialLiabilities(ASU2016-01)

Forpublicbusinessentities,thisstandardrequires:(i)certainequityinvestmentstobemeasuredatfairvaluewithchangesinfairvaluerecognizedinnetincome;(ii)aqualitativeassessmenttoidentifyimpairmentofequityinvestmentswithoutreadilydeterminablefairvalues;(iii)eliminationoftherequirementtodisclosethemethod(s)andsignificantassumptionsusedtoestimatethefairvalueforfinancialinstrumentsmeasuredatamortizedcostonthebalancesheet;(iv)useoftheexitpricenotionwhenmeasuringthefairvalueoffinancialinstrumentsfordisclosurepurposes;(v)separatepresentationinothercomprehensiveincomeoftheportionofthetotalchangeinthefairvalueofaliabilityresultingfromachangeintheinstrument-specificcreditriskwhentheentityhaselectedtomeasuretheliabilityatfairvalueinaccordancewiththefairvalueoptionforfinancialinstruments;(vi)separatepresentationoffinancialassetsandliabilitiesbymeasurementcategoryandformoffinancialassetinthefinancialstatements;and(vii)anentitytoevaluatetheneedforavaluationallowanceonadeferredtaxassetrelatedtoavailable-for-salesecuritiesincombinationwiththeentity’sotherdeferredtaxassets.Thestandardshouldbeappliedbymeansofacumulative-effectadjustmenttothebalancesheetatthebeginningofthefiscalyearofadoption.Earlyadoptionispermitted,subjecttocertainconditionsresultingfromachangeintheinstrument-specificcreditriskwhentheentityhaselectedtomeasuretheliabilityatfairvalue.

Wearecurrentlyevaluatingtheimpactthisstandardwillhaveonourconsolidatedfinancialstatements.

December28,2017

Accounting StandardsUpdate (“ASU”) Description Expected Impact Effective Date

RevenuefromContractswithCustomersandrelatedstandards(ASU’s2014-09,2015-14,2016-08,2016-10,2016-12,2016-20)

Thisstandardsupersedestheexistingrevenuerecognitionguidanceandprovidesanewframeworkforrecognizingrevenue.Thecoreprincipleofthestandardisthatanentityshouldrecognizerevenuetodepictthetransferofpromisedgoodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforthosegoodsandservices.Thenewstandardalsorequiressignificantlymorecomprehensivedisclosuresthantheexistingstandard.GuidancesubsequenttoASU2014-09hasbeenissuedtoclarifyvariousprovisionsinthestandard,includingprincipalversusagentconsiderations,identifyingperformanceobligations,licensingtransactions,aswellasvarioustechnicalcorrectionsandimprovements.Thisstandardmaybeadoptedusingeitheraretrospectiveormodifiedretrospectivemethod.Earlyadoptionispermitted.

Wearecurrentlyintheprocessofevaluatingtheimpactthisstandardisexpectedtohaveonourconsolidatedfinancialstatements.

Basedonourpreliminaryassessment,webelievethatthepatternandtimingofrevenuerecognitionrelatedtothefixedfeesassociatedwithourlicensingagreements(suchasrestaurantopeningandterritoryfees)willdifferfromcurrentpolicy.Currently,restaurantopeningfeesarerecordedasdeferredrevenuewhenreceivedandproportionateamountsarerecognizedasrevenuewhenalicensedShackisopenedandallmaterialservicesandconditionsrelatedtothefeehavebeensubstantiallyperformed.Territoryfeesarerecordedasdeferredrevenuewhenreceivedandrecognizedasrevenueonastraight-linebasisoverthetermofthelicenseagreement,whichgenerallybeginsuponexecutionofthecontract.Underthenewstandard,wewilllikelyidentifythelicensesgrantedtoeachrestaurantundereachlicensingagreementasseparateperformanceobligations.Accordingly,wewouldallocatetheopeningandterritoryfeestoeachrestaurantandrecognizesuchfeesasrevenueonastraight-linebasisovertheindividualrestaurants’licenseterms,whichgenerallybeginwhentherestaurantopens.Wedonotexpecttheaccountingforthesales-basedroyaltiesofourlicensingagreementstochangefromcurrentpolicy.

WearestillintheprocessofassessingwhetheranysalespromotionsordiscountswecurrentlyofferrelatedtoourShacksalescouldbeconsideredseparateperformanceobligations.

WeplantoadoptthestandardonDecember28,2017,andwehavenotyetselectedatransitionmethod.

December28,2017

Leases Thisstandardestablishesanewleaseaccountingmodel,which Wearecurrentlyevaluatingtheimpactthisstandard December27,

(ASU2016-02) introducestherecognitionofleaseassetsandliabilitiesforthoseleasesclassifiedasoperatingleasesunderpreviousGAAP.Itshouldbeappliedusingamodifiedretrospectiveapproach,withtheoptiontoelectvariouspracticalexpedients.Earlyadoptionispermitted.

willhaveonourconsolidatedfinancialstatements. 2018

12|Shake Shack Inc. Form10-Q

TableofContents

NOTE 3 : FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring BasisThe following tables present information about our financial assets and liabilities measured at fair value on a recurring basis as of September 27, 2017 andDecember28,2016,andindicatetheclassificationwithinthefairvaluehierarchy.

Cash, Cash Equivalents and Marketable SecuritiesThefollowingtablessummarizeourcash,cashequivalentsandmarketablesecuritiesbysignificantinvestmentcategoriesasofSeptember27,2017andDecember28,2016:

September 27, 2017

Cost Basis

GrossUnrealized

Gains

GrossUnrealized

Losses Fair Value Cash and Cash

Equivalents Marketable

Securities

Cash $ 21,862 $ — $ — $ 21,862 $ 21,862 $ —

Level1: Moneymarketfunds 5,025 — — 5,025 5,025 —

Mutualfunds 60,769 60 — 60,829 — 60,829

Level2: Corporatedebtsecurities(1) 2,493 2 (25) 2,470 — 2,470

Total $ 90,149 $ 62 $ (25) $ 90,186 $ 26,887 $ 63,299

December 28, 2016

Cost Basis

GrossUnrealized

Gains

GrossUnrealized

Losses Fair Value

Cash andCash

Equivalents Marketable

Securities

Cash $ 6,322 $ — $ — $ 6,322 $ 6,322 $ —

Level1: Moneymarketfunds 5,285 — — 5,285 5,285 —

Mutualfunds 60,232 — — 60,232 — 60,232

Level2: Corporatedebtsecurities(1) 2,473 3 (30) 2,446 — 2,446

Total $ 74,312 $ 3 $ (30) $ 74,285 $ 11,607 $ 62,678

(1) Corporate debt securities were measured at fair value using a market approach utilizing observable prices for identical securities or securities with similar characteristicsand inputs that are observable or can be corroborated by observable market data.

Net unrealized gains on available-for-sale securities totaling $37 and net unrealized losses on available-for-sale securities totaling $27 were included inaccumulatedothercomprehensiveincome(loss)ontheCondensedConsolidatedBalanceSheetasofSeptember27,2017andDecember28,2016,respectively.

Shake Shack Inc. Form10-Q|13

TableofContents

ThefollowingtablessummarizethegrossunrealizedlossesandfairvaluesforthoseinvestmentsthatwereinanunrealizedlosspositionasofSeptember27,2017andDecember28,2016,aggregatedbyinvestmentcategoryandthelengthoftimethatindividualsecuritieshavebeeninacontinuouslossposition:

September 27, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss

Moneymarketfunds $ — $ — $ — $ — $ — $ —

Mutualfunds — — — — — —

Corporatedebtsecurities 1,638 (9) 322 (16) 1,960 (25)

Total $ 1,638 $ (9) $ 322 $ (16) $ 1,960 $ (25)

December 28, 2016 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss

Moneymarketfunds $ — $ — $ — $ — $ — $ —

Mutualfunds — — — — — —

Corporatedebtsecurities 1,244 (10) 540 (20) 1,784 (30)

Total $ 1,244 $ (10) $ 540 $ (20) $ 1,784 $ (30)

Asummaryofotherincomefromavailable-for-salesecuritiesrecognizedduringthethirteenandthirty-nineweeksendedSeptember27,2017andSeptember28,2016isasfollows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27

2017 September 28

2016 September 27

2017 September 28

2016

Available-for-salesecurities: Dividendincome $ 222 $ 133 $ 591 $ 133

Interestincome 19 22 58 68

Lossoninvestments (12) (4) (27) (4)

Total other income, net $ 229 $ 151 $ 622 $ 197

Asummaryofavailable-for-salesecuritiessoldandgrossrealizedgainsandlossesrecognizedduringthethirteenandthirty-nineweeksendedSeptember27,2017andSeptember28,2016isasfollows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27

2017 September 28

2016 September 27

2017 September 28

2016

Available-for-salesecurities: Grossproceedsfromsalesandredemptions $ 584 $ 176 $ 1,212 $ 498

Costbasisofsalesandredemptions 597 180 1,239 502

Grossrealizedgainsincludedinnetincome 1 — 1 1

Grossrealizedlossesincludedinnetincome (13) (4) (28) (5)

Amountsreclassifiedoutofaccumulatedothercomprehensiveloss 14 3 28 3

14|Shake Shack Inc. Form10-Q

TableofContents

Realizedgainsandlossesaredeterminedonaspecificidentificationmethodandareincludedinotherincome,netontheCondensedConsolidatedStatementsofIncome.

Theestimatedfairvalueofourinvestmentsincorporatedebtsecuritiesthatareaccountedforasavailable-for-salesecuritiesareallduewithinoneyearandareincludedwithinmarketablesecuritiesontheCondensedConsolidatedBalanceSheets.

Weperiodicallyreviewourmarketablesecuritiesforother-than-temporaryimpairment.Weconsiderfactorssuchastheduration,severityandthereasonforthedeclineinvalue,thepotentialrecoveryperiodandourintenttosell.Forourdebtsecurities,wealsoconsiderwhether(i)itismorelikelythannotthatwewillberequiredtosellthedebtsecuritiesbeforerecoveryoftheiramortizedcostbasis,and(ii)theamortizedcostbasiscannotberecoveredasaresultofcreditlosses.AsofSeptember27,2017andDecember28,2016,thedeclinesinthemarketvalueofourmarketablesecuritiesinvestmentportfoliowereconsideredtobetemporaryinnature.

Other Financial InstrumentsThe carrying value of our other financial instruments, including accounts receivable, accounts payable, and accrued expenses as of September 27, 2017 andDecember28,2016approximatedtheirfairvalueduetotheshort-termnatureofthesefinancialinstruments.

Assets and Liabilities Measured at Fair Value on a Non-Recurring BasisAssetsandliabilities thataremeasuredatfair valueonanon-recurringbasisincludeourlong-livedassetsandindefinite-livedintangibleassets. Therewerenoimpairmentsrecognizedduringthethirteenandthirty-nineweeksendedSeptember27,2017andSeptember28,2016.

NOTE 4 : INVENTORIES

InventoriesasofSeptember27,2017andDecember28,2016consistedofthefollowing:

September 27

2017 December 28

2016

Food $ 774 $ 543

Wine 55 47

Beer 75 58

Beverages 102 79

Retailmerchandise 121 79

Inventories $ 1,127 $ 806

Shake Shack Inc. Form10-Q|15

TableofContents

NOTE 5 : PROPERTY AND EQUIPMENT

PropertyandequipmentasofSeptember27,2017andDecember28,2016consistedofthefollowing:

September 27

2017 December 28

2016

Leaseholdimprovements $ 146,939 $ 120,629

Landlordfundedassets 6,555 —

Equipment 28,139 23,194

Furnitureandfixtures 9,082 7,342

Computerequipmentandsoftware 10,966 8,710

Constructioninprogress(includesassetsunderconstructionfromdeemedlandlordfinancing) 25,608 13,510

Propertyandequipment,gross 227,289 173,385

Less:accumulateddepreciation 52,600 37,121

Property and equipment, net $ 174,689 $ 136,264

NOTE 6 : SUPPLEMENTAL BALANCE SHEET INFORMATION

ThecomponentsofothercurrentliabilitiesasofSeptember27,2017andDecember28,2016areasfollows:

September 27

2017 December 28

2016

Salestaxpayable $ 1,539 $ 1,324

Currentportionofliabilitiesundertaxreceivableagreement 3,140 4,580

Giftcardliability 1,003 1,153

Deferredcompensation 2,400 —

Other 1,735 3,116

Other current liabilities $ 9,817 $ 10,173

NOTE 7 : DEBT

InJanuary2015,weexecutedaThirdAmendedandRestatedCreditAgreement,whichbecameeffectiveonFebruary4,2015(togetherwiththeprioragreementsand amendments, and as further amended, the "Revolving Credit Facility"), which provides for a revolving total commitment amount of $50,000, of which$20,000isavailable immediately. TheRevolvingCredit Facilitywill matureandall amountsoutstandingwill bedueandpayablefiveyearsfromtheeffectivedate.TheRevolvingCreditFacilitypermitstheissuanceoflettersofcredituponourrequestofupto$10,000.BorrowingsundertheRevolvingCreditFacilitybearinterestateither:(i)LIBORplusapercentagerangingfrom2.3%to3.3%or(ii)theprimerateplusapercentagerangingfrom0.0%to0.8%,dependingonthetypeofborrowingmadeundertheRevolvingCreditFacility.AsofSeptember27,2017andDecember28,2016,therewerenoamountsoutstandingundertheRevolvingCreditFacility.AsofSeptember27,2017,wehad$19,317ofavailabilityundertheRevolvingCreditFacility,aftergivingeffectto$683inoutstandinglettersofcredit.

TheRevolvingCreditFacilityissecuredbyafirst-prioritysecurityinterestinsubstantiallyalloftheassetsofSSEHoldingsandtheguarantors.TheobligationsundertheRevolvingCreditFacilityareguaranteedbyeachofSSEHoldings'wholly-owneddomesticsubsidiaries(withcertainexceptions).

16|Shake Shack Inc. Form10-Q

TableofContents

TheRevolvingCreditFacilitycontainsanumberofcovenantsthat,amongotherthings,limitourabilityto,subjecttospecifiedexceptions,incuradditionaldebt;incuradditionalliensandcontingentliabilities;sellordisposeofassets;mergewithoracquireothercompanies;liquidateordissolveourselves;paydividendsormakedistributions;engageinbusinessesthatarenotinarelatedlineofbusiness;makeloans,advancesorguarantees;engageintransactionswithaffiliates;andmakeinvestments.Inaddition,theRevolvingCreditFacilitycontainscertaincross-defaultprovisions.Wearerequiredtomaintainaspecifiedconsolidatedfixed-chargecoverageratioandaspecifiedfundednetdebttoadjustedEBITDAratio,bothasdefinedundertheRevolvingCreditFacility.AsofSeptember27,2017,wewereincompliancewithallcovenants.

AsofSeptember27,2017andDecember28,2016wehaddeemedlandlordfinancingliabilitiesof$13,162and$2,007,respectively,forcertainleaseswhereweareinvolvedintheconstructionofleasedassetsandareconsideredtheaccountingowneroftheconstructionproject.

Totalinterestcostsincurredwere$527and$1,260forthe thirteenandthirty-nineweeksendedSeptember27,2017,respectively,and$89and$267forthethirteenandthirty-nineweeksended September28,2016, respectively. Total amounts capitalized intoproperty andequipment were$51and$115forthethirteen and thirty-nine weeks ended September 27, 2017 , respectively. No amounts were capitalized for the thirteen and thirty-nine weeks endedSeptember28,2016.

NOTE 8 : NON-CONTROLLING INTERESTS

We are the sole managing member of SSE Holdings and, as a result, consolidate the financial results of SSE Holdings. We report a non-controlling interestrepresentingtheeconomicinterestinSSEHoldingsheldbytheothermembersofSSEHoldings.TheThirdAmendedandRestatedLimitedLiabilityCompanyAgreement,asfurtheramended,(the"LLCAgreement")ofSSEHoldingsprovidesthatholdersofLLCInterestsmay,fromtimetotime,requireSSEHoldingstoredeemall or a portionoftheir LLCInterests for newly-issuedshares of ClassAcommonstockonaone-for-onebasis. Inconnectionwithanyredemptionorexchange,wewillreceiveacorrespondingnumberofLLCInterests,increasingourtotalownershipinterestinSSEHoldings.ChangesinourownershipinterestinSSE Holdings while we retain our controlling interest in SSE Holdings will be accounted for as equity transactions. As such, future redemptions or directexchangesofLLCInterestsinSSEHoldingsbytheothermembersofSSEHoldingswillresultinachangeinownershipandreducetheamountrecordedasnon-controllinginterestandincreaseadditionalpaid-incapital.

ThefollowingtablesummarizestheownershipinterestinSSEHoldingsasofSeptember27,2017andDecember28,2016.

September 27, 2017 December 28, 2016 LLC Interests Ownership% LLC Interests Ownership %

NumberofLLCInterestsheldbyShakeShackInc. 26,161,111 71.2% 25,151,384 69.1%

NumberofLLCInterestsheldbynon-controllinginterestholders 10,567,792 28.8% 11,253,592 30.9%

TotalLLCInterestsoutstanding 36,728,903 100.0% 36,404,976 100.0%

Theweightedaverageownershippercentagesfortheapplicablereportingperiodsareusedtoattributenetincomeandothercomprehensiveincome(loss)toShakeShackInc.andthenon-controllinginterestholders.Thenon-controllinginterestholders' weightedaverageownershippercentageforthethirteenandthirty-nineweeks ended September 27, 2017was 29.1% and 29.7% , respectively. The non-controlling interest holders' weighted average ownership percentage for thethirteenandthirty-nineweeksendedSeptember28,2016was33.9%and38.5%,respectively.

Shake Shack Inc. Form10-Q|17

TableofContents

ThefollowingtablesummarizestheeffectsofchangesinownershipofSSEHoldingsonourequityduringthethirteenandthirty-nineweeksendedSeptember27,2017andSeptember28,2016.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27

2017 September 28

2016 September 27

2017 September 28

2016

NetincomeattributabletoShakeShackInc. $ 4,997 $ 3,766 $ 12,143 $ 8,526

Othercomprehensiveincome(loss): Unrealizedholdinggains(losses)onavailable-for-salesecurities 47 (5) 45 (10)

Transfers(to)fromnon-controllinginterests:

Increaseinadditionalpaid-incapitalasaresultoftheredemptionofLLCInterests 841 4,708 2,883 15,086

Increaseinadditionalpaid-incapitalasaresultofactivityunderstockcompensationplans 78 17 3,580 421

Total effect of changes in ownership interest on equity attributable to ShakeShack Inc. $ 5,963 $ 8,486 $ 18,651 $ 24,023

During the thirty-nine weeks endedSeptember 27, 2017 andSeptember 28, 2016 , an aggregate of 685,800and4,706,663LLCInterests, respectively, wereredeemed by non-controlling interest holders for newly-issued shares of Class A common stock, and we received 685,800 and 4,706,663 LLC Interests inconnection with these redemptions for the thirty-nine weeksendedSeptember 27, 2017andSeptember 28, 2016 , respectively, increasing our total ownershipinterestinSSEHoldings.

Duringthethirty-nineweeksendedSeptember27,2017andSeptember28,2016,wereceivedanaggregateof323,927and101,837LLCInterests,respectively,inconnectionwiththeactivityunderourstockcompensationplan.

NOTE 9 : EQUITY-BASED COMPENSATION

Asummaryofequity-basedcompensationexpenserecognizedduringthethirteenandthirty-nineweeksendedSeptember27,2017andSeptember28,2016isasfollows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27

2017 September 28

2016 September 27

2017 September 28

2016

Stockoptions $ 816 $ 1,085 $ 2,643 $ 3,168

Performancestockunits 345 492 1,029 649

Restrictedstockunits 128 — 151 —

Equity-based compensation expense $ 1,289 $ 1,577 $ 3,823 $ 3,817

Total income tax benefit recognized related to equity-based compensation $ 47 $ 53 $ 142 $ 117

AmountsareincludedingeneralandadministrativeexpenseandlaborandrelatedexpensesontheCondensedConsolidatedStatementsofIncome.

18|Shake Shack Inc. Form10-Q

TableofContents

NOTE 10 : INCOME TAXES

WearethesolemanagingmemberofSSEHoldingsand,asaresult,consolidatethefinancialresultsofSSEHoldings.SSEHoldingsistreatedasapartnershipforU.S. federal andmost applicable state andlocal incometaxpurposes. Asa partnership, SSEHoldingsis not subject to U.S. federal andcertain state andlocalincometaxes.AnytaxableincomeorlossgeneratedbySSEHoldingsispassedthroughtoandincludedinthetaxableincomeorlossofitsmembers,includingus,ona pro rata basis. Weare subject to U.S. federal incometaxes, in addition to state andlocal incometaxes with respect to our allocable share of anytaxableincomeorlossof SSEHoldings, aswell asanystand-aloneincomeorloss generatedbyShakeShackInc. Wearealsosubject towithholdingtaxesinforeignjurisdictions.

Income Tax ExpenseAreconciliationofincometaxexpensecomputedattheU.S.federalstatutoryincometaxratetotherecognizedincometaxexpenseisasfollows:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27 2017 September 28

2016 September 27 2017 September 28

2016ExpectedU.S.federalincometaxesatstatutoryrate $ 3,627 35.0% $ 3,139 34.0% $ 9,609 35.0% $ 7,734 34.0%

Stateandlocalincometaxes,netoffederalbenefit 630 6.1% 533 5.8% 1,638 6.0% 1,277 5.6%

Foreignwithholdingtaxes 292 2.8% 148 1.6% 705 2.6% 505 2.2%

Taxcredits (399) (3.8)% (243) (2.6)% (777) (2.8)% (369) (1.6)%

Non-controllinginterest (1,132) (10.9)% (1,134) (12.3)% (3,114) (11.3)% (3,089) (13.6)%

Other (524) (5.1)% — —% (524) (2.0)% — —%

Income tax expense $ 2,494 24.1% $ 2,443 26.5% $ 7,537 27.5% $ 6,058 26.6%

OureffectiveincometaxratesforthethirteenweeksendedSeptember27,2017andSeptember28,2016were24.1%and26.5%,respectively.Thedecreasewasdrivenbyabenefitrelatedtoanadjustmentrecognizedinconnectionwiththefilingofourprioryeartaxreturnsandhighertaxcredits,whichwerepartiallyoffsetbytheincreaseinourownershipinterestinSSEHoldings,whichincreasesourshareofthetaxableincomeofSSEHoldings,andhigherforeignwithholdingtaxes.Our weighted-average ownership interest in SSEHoldings was70.9%and66.1%forthethirteen weeksendedSeptember 27, 2017andSeptember 28, 2016 ,respectively.

Oureffectiveincometaxratesforthethirty-nineweeksendedSeptember27,2017andSeptember28,2016were27.5%and26.6%,respectively.TheincreaseinoureffectiveincometaxratefortheperiodisprimarilyduetoanincreaseinourownershipinterestinSSEHoldings.AsourownershipinterestinSSEHoldingsincreases,ourshareofthetaxableincomeofSSEHoldingsalsoincreases.Ourweighted-averageownershipinterestinSSEHoldingswas70.3%and61.5%forthethirty-nineweeksendedSeptember27,2017andSeptember28,2016,respectively.Thisincreaseinownershipinterestwaspartiallyoffsetbyabenefitrelatedtoanadjustmentrecognizedinconnectionwiththefilingofourprioryeartaxreturnsandhighertaxcredits.

Deferred Tax Assets and LiabilitiesDuringthethirty-nineweeksendedSeptember27,2017,weacquiredanaggregateof1,009,727LLCInterestsinconnectionwiththeredemptionofLLCInterestsand activity relating to our stock compensation plan. We recognized a deferred tax asset in the amount of $9,883associated with the basis difference in ourinvestmentinSSEHoldingsuponacquisitionoftheseLLCInterests.AsofSeptember27,2017,thetotaldeferredtaxassetrelatedtothebasisdifferenceinourinvestment in SSE Holdings was $216,285. However, a portion of the total basis difference will only reverse upon the eventual sale of our interest in SSEHoldings,whichweexpectwouldresult inacapital loss.AsofSeptember27,2017, thetotal valuationallowanceestablishedagainstthedeferredtaxassettowhichthisportionrelateswas$15,679.

Shake Shack Inc. Form10-Q|19

TableofContents

Duringthethirty-nineweeksendedSeptember27,2017,wealsorecognized$5,216ofdeferredtaxassetsrelatedtoadditionaltaxbasisincreasesgeneratedfromexpectedfuturepaymentsundertheTaxReceivableAgreementandrelateddeductionsforimputedinterestonsuchpayments.See"—TaxReceivableAgreement"formoreinformation.

Weevaluatetherealizabilityofourdeferredtaxassetsonaquarterlybasisandestablishvaluationallowanceswhenitismorelikelythannotthatalloraportionofadeferredtaxassetmaynotberealized.AsofSeptember27,2017,weconcluded,basedontheweightofallavailablepositiveandnegativeevidence,thatallofour deferred tax assets (except for those deferred tax assets described above relating to basis differences that are expected to result in a capital loss upon theeventualsaleofourinterestinSSEHoldings)aremorelikelythannottoberealized.Assuch,noadditionalvaluationallowancewasrecognized.

Uncertain Tax PositionsNouncertaintaxpositionsexistedasofSeptember27,2017.ShakeShackInc.wasformedinSeptember2014anddidnotengageinanyoperationspriortotheIPOandrelatedorganizationaltransactions.ShakeShackInc.firstfiledtaxreturnsfortaxyear2014,whichisthefirsttaxyearsubjecttoexaminationbytaxingauthoritiesforU.S.federalandstateincometaxpurposes.Additionally,althoughSSEHoldingsistreatedasapartnershipforU.S.federalandstateincometaxespurposes, it is still requiredtofileanannualU.S.ReturnofPartnershipIncome,whichissubject toexaminationbytheInternal RevenueService("IRS"). Thestatuteoflimitationshasexpiredfortaxyearsthrough2013forSSEHoldings.

Tax Receivable AgreementPursuanttoourelectionunderSection754oftheInternalRevenueCode(the"Code"),weexpecttoobtainanincreaseinourshareofthetaxbasisinthenetassetsofSSEHoldingswhenLLCInterestsareredeemedorexchangedbytheothermembersofSSEHoldings.WeplantomakeanelectionunderSection754oftheCodeforeachtaxableyearinwhicharedemptionorexchangeofLLCInterestoccurs.WeintendtotreatanyredemptionsandexchangesofLLCInterestsasdirectpurchasesofLLCInterestsforU.S.federalincometaxpurposes.Theseincreasesintaxbasismayreducetheamountsthatwewouldotherwisepayinthefuturetovarioustaxauthorities.Theymayalsodecreasegains(orincreaselosses)onfuturedispositionsofcertaincapitalassetstotheextenttaxbasisisallocatedtothosecapitalassets.

OnFebruary4,2015,weenteredintoataxreceivableagreementwithcertainofthethen-existingmembersofSSEHoldings(the"TaxReceivableAgreement")that provides for the payment by us of85%of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of(i)increasesinourshareofthetaxbasisinthenetassetsofSSEHoldingsresultingfromanyredemptionsorexchangesofLLCInterests,(ii)taxbasisincreasesattributabletopaymentsmadeundertheTaxReceivableAgreement,and(iii)deductionsattributabletoimputedinterestpursuanttotheTaxReceivableAgreement(the"TRAPayments").Weexpecttobenefitfromtheremaining15%ofanytaxbenefitsthatwemayactuallyrealize.TheTRAPaymentsarenotconditioneduponanycontinuedownershipinterestinSSEHoldingsorus.TherightsofeachmemberofSSEHoldings,thatisapartytotheTaxReceivableAgreement,areassignabletotransfereesoftheirrespectiveLLCInterests.

Duringthethirty-nineweeksendedSeptember27,2017,weacquiredanaggregateof685,800LLCInterestsinconnectionwiththeredemptionofLLCInterests,whichresultedinanincreaseinthetaxbasisofourinvestmentinSSEHoldingssubjecttotheprovisionsoftheTaxReceivableAgreement.Werecognizedanadditionalliabilityintheamountof$12,918fortheTRAPaymentsduetotheredeemingmembers,representing85%oftheaggregatetaxbenefitsweexpecttorealizefromthetaxbasisincreasesrelatedtotheredemptionofLLCInterests,afterconcludingitwasprobablethatsuchTRAPaymentswouldbepaidbasedonourestimates of future taxable income. Duringthe thirty-nine weeksendedSeptember 27, 2017 , payments of$1,471, inclusive of interest, weremadeto themembersofSSEHoldingspursuanttotheTaxReceivableAgreement.Noamountswerepaidtothemembersduringthethirty-nineweeksendedSeptember28,2016.AsofSeptember27,2017,thetotalamountofTRAPaymentsdueundertheTaxReceivableAgreement,was$283,961,ofwhich$3,140wasincludedinother current liabilities on the Condensed Consolidated Balance Sheet. SeeNote 13 for more information relating to our liabilities under the Tax ReceivableAgreement.

20|Shake Shack Inc. Form10-Q

TableofContents

NOTE 11 : EARNINGS PER SHARE

BasicearningspershareofClassAcommonstockiscomputedbydividingnetincomeavailabletoShakeShackInc.bytheweighted-averagenumberofsharesofClassAcommonstockoutstandingduringtheperiod.DilutedearningspershareofClassAcommonstockiscomputedbydividingnetincomeavailabletoShakeShackInc.bytheweighted-averagenumberofsharesofClassAcommonstockoutstandingadjustedtogiveeffecttopotentiallydilutivesecurities.

ThefollowingtablesetsforthreconciliationsofthenumeratorsanddenominatorsusedtocomputebasicanddilutedearningspershareofClassAcommonstockforthethirteenandthirty-nineweeksendedSeptember27,2017andSeptember28,2016.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27 2017 September 28

2016 September 27 2017 September 28

2016

Numerator: Netincome $ 7,870 $ 6,789 $ 19,916 $ 16,689

Less:netincomeattributabletonon-controllinginterests 2,873 3,023 7,773 8,163

NetincomeattributabletoShakeShackInc. $ 4,997 $ 3,766 $ 12,143 $ 8,526

Denominator: Weighted-averagesharesofClassAcommonstockoutstanding—basic 26,024 24,023 25,733 22,310

Effectofdilutivesecurities: Stockoptions 411 531 486 495

Performancestockunits 26 — 24 —

Restrictedstockunits 16 — 5 —

Weighted-averagesharesofClassAcommonstockoutstanding—diluted 26,477 24,554 26,248 22,805

EarningspershareofClassAcommonstock—basic $ 0.19 $ 0.16 $ 0.47 $ 0.38

EarningspershareofClassAcommonstock—diluted $ 0.19 $ 0.15 $ 0.46 $ 0.37

Shares of our Class B common stock do not share in the earnings or losses of Shake Shack and are therefore not participating securities. As such, separatepresentationofbasicanddilutedearningspershareofClassBcommonstockunderthetwo-classmethodhasnotbeenpresented.

Shake Shack Inc. Form10-Q|21

TableofContents

ThefollowingtablepresentspotentiallydilutivesecuritiesexcludedfromthecomputationsofdilutedearningspershareofClassAcommonstockforthethirteenandthirty-nineweeksendedSeptember27,2017andSeptember28,2016.

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27 2017 September 28

2016 September 27 2017 September 28

2016 Stockoptions(1) 18,676 (2) — 18,676 (2) — Performancestockunits(1) 86,396 (3) 62,800 (3) 86,396 (3) 62,800 (3)SharesofClassBcommonstock 10,567,792 (4) 11,754,078 (4) 10,567,792 (4) 11,754,078 (4)

(1) Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effectand were included in the computation of diluted earnings per share.

(2) Excluded from the computation of diluted earnings per share of Class A common stock because the exercise price of the stock options exceeded the average market price ofour Class A common stock during the period ("out-of-the-money").

(3) Excluded from the computation of diluted earnings per share of Class A common stock because the performance conditions associated with these awards were not metassuming the end of the reporting period was the end of the performance period.

(4) Shares of our Class B common stock are considered potentially dilutive shares of Class A common stock. Amounts have been excluded from the computations of dilutedearnings per share of Class A common stock because the effect would have been anti-dilutive under the if-converted and two-class methods.

NOTE 12 : SUPPLEMENTAL CASH FLOW INFORMATION

Thefollowingtablesetsforthsupplementalcashflowinformationforthethirty-nineweeksendedSeptember27,2017andSeptember28,2016:

Thirty-Nine Weeks Ended

September 27

2017 September 28

2016

Cashpaidfor: Incometaxes,netofrefunds $ 1,936 $ 1,292

Interest,netofamountscapitalized 684 40

Non-cashinvestingactivities: Accruedpurchasesofpropertyandequipment 10,138 5,792

Capitalizedlandlordassetsforleaseswherewearedeemedtheaccountingowner 9,095 —

Accruedpurchasesofmarketablesecurities 307 51

Capitalizedequity-basedcompensation 86 107

Non-cashfinancingactivities: ClassAcommonstockissuedinconnectionwiththeredemptionofLLCInterests — 5

CancellationofClassBcommonstockinconnectionwiththeredemptionofLLCInterests — (5)

Establishmentofliabilitiesundertaxreceivableagreement 12,918 90,776

Accrueddistributionspayabletonon-controllinginterestholders

— 607

22|Shake Shack Inc. Form10-Q

TableofContents

NOTE 13 : COMMITMENTS AND CONTINGENCIES

Lease CommitmentsWeareobligatedundervariousoperatingleasesforShacksandourhomeofficespace,expiringinvariousyearsthrough2035.Undercertainoftheseleases,weareliableforcontingentrentbasedonapercentageofsalesinexcessofspecifiedthresholdsandaretypicallyresponsibleforourproportionateshareofrealestatetaxes,commonareamaintenancechargesandutilities.

Assecurityunderthetermsofseveralofourleases,weareobligatedunderlettersofcredittotaling$160asofSeptember27,2017.ThelettersofcreditexpireinApril2018andFebruary2026.Inaddition,inDecember2013,weenteredintoanirrevocablestandbyletterofcreditinconjunctionwithourhomeofficeleaseintheamountof$80.TheletterofcreditexpiresinSeptember2018andrenewsautomaticallyforone-yearperiodsthroughSeptember2019.InSeptember2017,weenteredintoanirrevocablestandbyletterofcreditinconjunctionwithournewhomeofficeleaseintheamountof$603.TheletterofcreditexpiresinAugust2018andrenewsautomaticallyforone-yearperiodsthroughJanuary2034.

Purchase CommitmentsPurchase obligations include legally binding contracts, including commitments for the purchase, construction or remodeling of real estate and facilities, firmminimum commitments for inventory purchases, equipment purchases, marketing-related contracts, software acquisition/license commitments and servicecontracts. Theseobligationsaregenerallyshort-terminnatureandarerecordedasliabilities whentherelatedgoodsarereceivedorservicesrendered. Wealsoenterintolong-term,exclusivecontractswithcertainvendorstosupplyuswithfood,beveragesandpapergoods,obligatingustopurchasespecifiedquantities.

Legal ContingenciesIn November 2015, we participated in a voluntary mediation with counsel representing two former Shake Shack managers, who alleged that we improperlyclassifiedourrestaurantmanagersasexemptfromovertimeprotections.Attheconclusionofthemediation,thepartiesmutuallyagreedtofullyandfinallyresolvethematter bysettling, rather thanlitigating. In connectionwiththe settlement, the parties enteredinto a memorandumof understanding, pursuant to whichweagreedtocreateasettlementfundintheamountof$750and,inexchangefortheirparticipationinthesettlementfund,allparticipatingemployees(currentandformer)wererequiredtoreleaseShakeShackfromallfederaland/orstatewageandhourclaimsthatmayhaveexistedthroughthesettlementdate.InMarch2016,thepartiesenteredintoasettlementagreementintheamountof$750.InMay2017,wepaidtotheclaimsadministrator$774infullsatisfactionoftheamountsowedbyusunderthesettlementagreementandrelatedexpenses.

Wearesubjecttovariouslegalandregulatoryproceedings,claimsandliabilities,suchasemployment-relatedclaimsandslipandfall cases,whichariseintheordinarycourseofbusinessandaregenerallycoveredbyinsurance.AsofSeptember27,2017,theamountofultimateliabilitywithrespecttothesematterswasnotmaterial.

Liabilities under Tax Receivable AgreementAsdescribedinNote10, weareapartytotheTaxReceivableAgreementunderwhichwearecontractuallycommittedtopaycertainofthemembersofSSEHoldings85%oftheamountofanytaxbenefits thatweactuallyrealize, orinsomecasesaredeemedtorealize, asaresult ofcertaintransactions. Wearenotobligatedto makeanypayments under theTaxReceivable Agreement until the taxbenefits associatedwiththe transactions that gaverise to the payments arerealized.AmountspayableundertheTaxReceivableAgreementarecontingentupon,amongotherthings,(i)generationoffuturetaxableincomeoverthetermofthe Tax Receivable Agreement and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the TaxReceivable Agreement to utilize the tax benefits, then we would not be required to make the related TRA Payments. During the thirty-nine weeks endedSeptember 27, 2017andSeptember 28, 2016 , werecognized liabilities totaling$12,918and$90,776, respectively, relating to our obligations under the TaxReceivableAgreement,afterconcludingthatitwasprobablethatwewouldhavesufficientfuturetaxableincomeoverthetermoftheTaxReceivableAgreementtoutilizetherelatedtaxbenefits.AsofSeptember27,2017andDecember28,2016,ourtotalobligationsundertheTaxReceivableAgreement,includingaccruedinterest, were$283,961and$272,482, respectively. There were no transactions subject to the Tax Receivable Agreement for which wedid not recognize therelatedliability,asweconcludedthatwewouldhavesufficientfuturetaxableincometoutilizealloftherelatedtaxbenefits.

Shake Shack Inc. Form10-Q|23

TableofContents

NOTE 14 : RELATED PARTY TRANSACTIONS

Union Square Hospitality GroupTheChairmanofourBoardofDirectorsservesastheChiefExecutiveOfficerofUnionSquareHospitalityGroup,LLC.Asaresult, UnionSquareHospitalityGroup,LLCanditssubsidiaries,setforthbelow,areconsideredrelatedparties.

USHG, LLCEffective January 2015, we entered into an Amended and Restated Management Services Agreement with USHG, LLC("USHG"), in which USHGprovidesreducedmanagementservicestoSSEHoldingscomprisedofexecutiveleadershipfrommembersofitsseniormanagement,advisoryanddevelopmentservicesandlimited leadership development and human resources services. The initial term of the Amended and Restated Management Services Agreement is throughDecember31,2019,withrenewalperiods.

NoamountswerepaidtoUSHGforgeneralcorporateexpensesduringthethirteenweeksendedSeptember27,2017and$1waspaidtoUSHGduringthethirteenweeks endedSeptember 28, 2016 . Total amounts paid to USHGfor general corporate expenses during the thirty-nine weeks endedSeptember 27, 2017 andSeptember28,2016were$6and$7,respectively.TheseamountsareincludedingeneralandadministrativeexpensesontheCondensedConsolidatedStatementsofIncome.

NoamountswerepayabletoUSHGasofSeptember27,2017.TotalamountspayabletoUSHGasofDecember28,2016were$1,whichisincludedinothercurrentliabilitiesontheCondensedConsolidatedBalanceSheets.NoamountswereduefromUSHGasofSeptember27,2017andDecember28,2016.

Daily ProvisionsInMay2017webeganpurchasingcoffeecakefromtherestaurantDailyProvisionstoofferasabreakfastitematourMadisonSquareParkShack.AmountspaidtoDailyProvisionsduringthethirteenandthirty-nineweeksendedSeptember27,2017were$4.NoamountswerepaidtoDailyProvisionsduringthethirteenandthirty-nineweeksendedSeptember28,2016.TotalamountspayabletoDailyProvisionsasofSeptember27,2017were$1,whichareincludedinaccountspayableontheCondensedConsolidatedBalanceSheets.NoamountswerepayabletoDailyprovisionsasofDecember28,2016.

Hudson Yards Sports and EntertainmentInfiscal2011,weenteredintoaMasterLicenseAgreement(asamended,"MLA")withHudsonYardsSportsandEntertainmentLLC("HYSE")tooperateShakeShackbrandedlimitedmenuconcessionstandsinsportsandentertainmentvenueswithintheUnitedStates.TheagreementexpiresinJanuary2027andincludesfiveconsecutivefive-yearrenewaloptionsat HYSE'soption.Asconsiderationfortheserights, HYSEpaysusalicensefeebasedonapercentageofnet foodsales,asdefinedintheMLA.HYSEalsopaysusapercentageofprofitsonsalesofbrandedbeverages,asdefinedintheMLA.AmountspaidtousbyHYSEforthethirteenandthirty-nineweeksendedSeptember27,2017were$193and$328,respectively.Forthethirteenandthirty-nineweeksendedSeptember28,2016amountspaidtousbyHYSEwere$174and$277,respectively.TheseamountsareincludedinlicensingrevenueontheCondensedConsolidatedStatementsofIncome.TotalamountsduefromHYSEasofSeptember27,2017andDecember28,2016were$75and$11,whichareincludedinprepaidexpensesandothercurrentassetsontheCondensedConsolidatedBalanceSheets.

Madison Square Park ConservancyThe Chairman of our Board of Directors serves as a director of the Madison Square Park Conservancy ("MSP Conservancy"), with which we have a licenseagreement andpaylicensefeestooperateourMadisonSquareParkShack. AmountspaidtoMadisonSquareParkConservancyasrent amountedto$199and$531forthethirteenandthirty-nineweeksendedSeptember27,2017,respectively.AmountspaidtoMadisonSquareParkConservancyasrentamountedto$195and$585forthethirteenandthirty-nineweeksendedSeptember28,2016,respectively.TheseamountsareincludedinoccupancyandrelatedexpensesontheCondensedConsolidatedStatementsofIncome.NoamountswereduetoMSPConservancyasofSeptember27,2017.TotalamountsduetoMSPConservancywere$1asofDecember28,2016.TheseamountsareincludedinaccruedexpensesontheCondensedConsolidatedBalanceSheets.

Additionally,wereceivedtenantimprovementallowancesfromMSPConservancyrelatedtoareconstructionprojectwhichendedin2015.NoamountswerepaidtousfromMSPConservancyduringthethirteenweeksendedSeptember27,2017.Duringthe

24|Shake Shack Inc. Form10-Q

TableofContents

thirty-nineweeksendedSeptember27,2017amountspaidtousfromMSPConservancytotaled$200.Noamountswerepaidtousduringthethirteenandthirty-nineweeksendedSeptember28,2016.NoamountswereduetousfromMSPConservancyasofSeptember27,2017.TotalamountsduefromMSPConservancyasofDecember28,2016were$200,whichareincludedinaccountsreceivableontheCondensedConsolidatedBalanceSheets.

Share Our StrengthTheChairmanofourBoardofDirectorsservesasadirectorofShareOurStrength,forwhichShakeShackholdsthe"GreatAmericanShakeSale"everyyearduringthemonthofMaytoraisemoneyandawarenessforchildhoodhunger.DuringtheGreatAmericanShakeSale,weencouragegueststodonatemoneytoShareOurStrength'sNoKidHungrycampaigninexchangeforacouponforafreecake-themedshake.AlloftheguestdonationswecollectgodirectlytoShareOurStrength.

Duringthethirty-nineweeksendedSeptember27,2017andSeptember28,2016theGreatAmericanShakeSaleraised$631and$587,respectively,forShareOurStrength.NoamountswereraisedforboththethirteenweeksendedSeptember27,2017andSeptember28,2016.AllproceedswereremittedtoShareOurStrength in the respective years. We incurred costs of approximately $29 and $148 for the thirteen and thirty-nine weeks ended September 27, 2017 ,respectively, and $17 and $115 for the thirteen and thirty-nine weeks ended September 28, 2016 , respectively, which represent the cost of the free shakesredeemed.ThesecostsareincludedingeneralandadministrativeexpensesontheCondensedConsolidatedStatementsofIncome.

Mobo Systems, Inc.The Chairman of our Board of Directors serves as a director of MoboSystems, Inc. (also knownas "Olo"), a platformweuse in connection with our mobileorderingapplication.AmountspaidtoOloduringthethirteenandthirty-nineweeksendedSeptember27,2017were$19and$57,respectively,whichareincludedinotheroperatingexpensesontheCondensedConsolidatedStatements ofIncome.Noamounts were paid to Olofor the thirteenandthirty-nine weeksendedSeptember28,2016.NoamountswerepayabletoOloasofSeptember27,2017andDecember28,2016.

Square, Inc.InJuly2017,ourChiefExecutiveOfficerjoinedtheBoardofDirectorsofSquare,Inc.("Square").Wecurrentlyusecertainpoint-of-saleapplications,paymentprocessingservices,hardwareandotherenterpriseplatformservicesinconnectionwiththeprocessingofalimitedamountofsalesatcertainofourShacks,salesforcertainoff-siteeventsandinconnectionwithourkiosktechnology.Additionally,inMarch2017,wepartneredwithCaviar,Square’sfoodorderingservice,foralimited-timedeliverypromotion.

Tax Receivable AgreementAsdescribedinNote10,weenteredintoataxreceivableagreementwithcertainmembersofSSEHoldingsthatprovidesforthepaymentbyusof85%oftheamountoftaxbenefits,ifany,thatShakeShackactuallyrealizesorinsomecasesisdeemedtorealizeasaresultofcertaintransactions.NopaymentsweremadetothemembersofSSEHoldingspursuanttotheTaxReceivableAgreementduringthethirteenweeksendedSeptember27,2017.Duringthethirty-nineweeksendedSeptember27,2017,paymentsof$1,471,inclusiveofinterest,weremadetothemembers.Noamountswerepaidtothemembersduringthethirteenandthirty-nineweeksendedSeptember28,2016.AsofSeptember27,2017andDecember28,2016,totalamountsdueundertheTaxReceivableAgreementwere$283,961and$272,482,respectively.

Distributions to Members of SSE HoldingsUnderthetermsoftheSSEHoldingsLLCAgreement,SSEHoldingsisobligatedtomaketaxdistributionstoitsmembers .Duringthethirteenandthirty-nineweeks endedSeptember 27, 2017distributions paid to non-controlling interest holders were$13and$2,392, respectively.Nodistributions were paid to non-controllinginterestholdersforthethirteenweeksendedSeptember28,2016.Forthethirty-nineweeksendedSeptember28,2016taxdistributionsof$1,602werepaidtonon-controllinginterestholders.Notaxdistributionswerepayabletonon-controllinginterestholdersasofSeptember27,2017.AsofDecember28,2016taxdistributionsof$607werepayabletonon-controllinginterestholders.

Shake Shack Inc. Form10-Q|25

TableofContents

Item 2. Management's Discussion and Analysis of Financial Conditionand Results of Operations.

This section and other parts of this Quarterly Report on Form 10-Q ("Form 10-Q") contain forward-looking statements, within the meaning of the PrivateSecurities Litigation Reform Act of 1995 ("PSLRA"), which are subject to known and unknown risks, uncertainties and other important factors that may causeactual results to be materially different. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements providecurrent expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, such asour expected financial outlook for fiscal 2017, expected Shack openings, expected same-Shack sales growth and trends in our business. Forward-lookingstatements can also be identified by words such as "aim," "anticipate," "believe," "estimate," "expect," "forecast," "future," "intend," "outlook," "plan,""potential," "predict," "project," "seek," "may," "can," "will," "would," "could," "should," the negatives thereof and other similar expressions. All forward-lookingstatements are expressly qualified in their entirety by these cautionary statements, except that the safe harbor provisions of the PSLRA do not apply to anyforward-looking statements relating to the operations of any of our partnerships or limited liability companies. Forward-looking statements are not guarantees offuture performance and actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such differencesinclude, but are not limited to, those discussed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 28, 2016 , as amended, ("2016 Form 10-K"), subsequent Quarterly Reports on Form 10-Q and Part II, Item 1A of this Form 10-Q. The following discussion should be read in conjunctionwith our 2016 Form 10-K and the condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Form 10-Q. All informationpresented herein is based on our fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years andthe associated quarters, months and periods of those fiscal years. We undertake no obligation to revise or update any forward-looking statements for any reason,except as required by law.

OVERVIEW

Shake Shack is a modern day "roadside" burger stand serving a classic American menu of premium burgers, chicken sandwiches, hot dogs, crinkle cut fries,shakes,frozencustard,beerandwine.AsofSeptember27,2017,therewere143Shacksinoperation,system-wide,ofwhich79weredomesticcompany-operatedShacks,10weredomesticlicensedShacksand54wereinternationallicensedShacks.

Development Highlights

Duringthequarter,weopenedfourdomesticcompany-operatedShacks,includingourfirstShackinSanAntonio,Texas,aswellasadditionalShacksinNevada,NewJerseyandNewYorkCity.Additionally,weopenedadomesticlicensedShackatM&TBankStadiuminBaltimoreandfourinternationallicensedShacks,whichiscomprisedofthefourthShackinJapanintheShinjukuareaandafifthShackinSouthKorea,aswellasadditionalShacksinTurkeyandtheMiddleEast.Alsoduringthequarter,weannouncedplanstoenterHongKong,MacauandShanghai,throughanewpartnershipwithMaxim'sCaterersLimited.

Financial Highlights for the Third Quarter 2017 :

▪ Totalrevenueincreased26.9%to$94.6million.▪ Shacksalesincreased26.8%to$91.1million.▪ Same-Shacksalesdecreased1.6%.▪ Operatingincomeincreased15.7%to$10.6million,or11.2%oftotalrevenue.▪ Shack-leveloperatingprofit*,anon-GAAPmeasure,increased19.9%to$24.8million,or27.2%ofShacksales.▪ Netincomeincreased15.9%to$7.9millionandnetincomeattributabletoShakeShackInc.was$5.0million,or$0.19perdilutedshare.▪ AdjustedEBITDA*,anon-GAAPmeasure,increased19.9%to$18.2million.▪ Adjustedproformanetincome*,anon-GAAPmeasure,increased13.1%to$6.2million,or$0.17perfullyexchangedanddilutedshare.▪ Ninesystem-wideShackopenings,includingfourdomesticcompany-operatedShacksandfivelicensedShacks.

26|Shake Shack Inc. Form10-Q

TableofContents

* Shack-level operating profit, adjusted EBITDA and adjusted pro forma net income are non-GAAP measures. See "—Non-GAAP Financial Measures" forreconciliations of Shack-level operating profit to operating income, adjusted EBITDA to net income , and adjusted pro forma net income to net incomeattributable to Shake Shack Inc., the most directly comparable financial measures presented in accordance with GAAP.

Wecontinued to execute on our growth strategies in 2017 and the thirdquarter of2017was positively impacted by the incremental sales fromthe 21newdomesticcompany-operatedShacksopenedbetweenSeptember28,2016andSeptember27,2017andtheapproximate1.5%menupriceincreaseimplementedinmid-December2016,offsetby(1)adeclineinsame-Shacksalesof1.6%;(2)increasedlaborandrelatedexpensesresultingfromincreasesinhourlywagesthatwereimplementedattheendoffiscal2016andinvestmentsinourmanagementteamtosupportfuturegrowth;and(3)theintroductionofmoreShacksofvariousvolumesintothesystem.

NetincomeattributabletoShakeShackInc.was$5.0million,or$0.19perdilutedshare,forthethirdquarterof2017,comparedto$3.8million,or$0.15perdilutedshare, for thesameperiodlast year. Onanadjustedproformabasis, whichexcludes certain non-recurringitemsandassumesthat all outstandingLLCInterestswereexchangedforsharesofClassAcommonstockasofthebeginningoftheperiod,wewouldhaverecognizednetincomeof$6.2million,or$0.17perfullyexchangedanddilutedshare, forthethirdquarterof2017comparedto$5.5million,or$0.15perfullyexchangedanddilutedshareforthethethirdquarterof2016,anincreaseof13.1%.

FISCAL 2017 OUTLOOK

ForthefiscalyearendingDecember27,2017,wehaverevisedourfinancialoutlooktothefollowing:

Current Outlook Previous Outlook

Totalrevenue $354to$355million $351to$355million

Same-Shacksalesgrowth(%) -1.5%to-2% -2%to-3%

Domesticcompany-operatedShackopenings 24to26 23to24

LicensedShackopenings 18,net 15,net

Shack-leveloperatingprofitmargin 26.5%to27.0% 26.5%to27.5%

Generalandadministrativeexpenses $38to$40million $38to$40million

Depreciationexpense $22million $22million

Interestexpense $1.6to$1.8million $1.6to$2.0million

Adjustedproformaeffectivetaxrate(%) 40%to41% 40%to41%

PRELIMINARY 2018 OUTLOOK

ForthefiscalyearendingDecember26,2018,weareprovidingthefollowingpreliminaryfinancialoutlook:

Current Outlook

Domesticcompany-operatedShackopenings 32to35

LicensedShackopenings 16to18,net

Shake Shack Inc. Form10-Q|27

TableofContents

RESULTS OF OPERATIONS

Thefollowingtablesummarizesourresultsofoperationsforthethirteenandthirty-nineweeksendedSeptember27,2017andSeptember28,2016:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(dollar amounts in thousands)September 27

2017September 28

2016September 27

2017September 28

2016Shacksales $ 91,100 96.3% $ 71,871 96.4% $ 253,258 96.4% $ 188,430 96.5%Licensingrevenue 3,509 3.7% 2,696 3.6% 9,416 3.6% 6,774 3.5%

TOTAL REVENUE 94,609 100.0% 74,567 100.0% 262,674 100.0% 195,204 100.0%Shack-leveloperatingexpenses(1): Foodandpapercosts 25,760 28.3% 20,393 28.4% 71,646 28.3% 53,529 28.4% Laborandrelatedexpenses 23,806 26.1% 18,216 25.3% 66,692 26.3% 46,640 24.8% Otheroperatingexpenses 9,229 10.1% 6,577 9.2% 25,380 10.0% 17,475 9.3% Occupancyandrelatedexpenses 7,522 8.3% 6,009 8.4% 20,741 8.2% 15,541 8.2%Generalandadministrativeexpenses 9,204 9.7% 7,885 10.6% 27,352 10.4% 22,265 11.4%Depreciationexpense 5,604 5.9% 3,719 5.0% 15,610 5.9% 10,229 5.2%Pre-openingcosts 2,670 2.8% 2,598 3.5% 6,961 2.7% 6,708 3.4%Lossondisposalofpropertyandequipment 204 0.2% — —% 317 0.1% — —%

TOTAL EXPENSES 83,999 88.8% 65,397 87.7% 234,699 89.3% 172,387 88.3%

OPERATING INCOME 10,610 11.2% 9,170 12.3% 27,975 10.7% 22,817 11.7%Otherincome,net 229 0.2% 151 0.2% 622 0.2% 197 0.1%Interestexpense (475) (0.5)% (89) (0.1)% (1,144) (0.4)% (267) (0.1)%

INCOME BEFORE INCOME TAXES 10,364 11.0% 9,232 12.4% 27,453 10.5% 22,747 11.7%Incometaxexpense 2,494 2.6% 2,443 3.3% 7,537 2.9% 6,058 3.1%

NET INCOME 7,870 8.3% 6,789 9.1% 19,916 7.6% 16,689 8.5%Less:netincomeattributabletonon-controllinginterests 2,873 3.0% 3,023 4.1% 7,773 3.0% 8,163 4.2%

NET INCOME ATTRIBUTABLE TO SHAKE SHACK INC. $ 4,997 5.3% $ 3,766 5.1% $ 12,143 4.6% $ 8,526 4.4%(1) As a percentage of Shack sales.

Shack SalesShacksalesrepresenttheaggregatesalesoffood,beveragesandShakeShackbrandedmerchandiseatourdomesticcompany-operatedShacks.Shacksalesinanyperiodaredirectlyinfluencedbythenumberofoperatingweeksinsuchperiod,thenumberofopenShacksandsame-Shacksales.Same-Shacksalesmeans,foranyreportingperiod,salesforthecomparableShackbase,whichwedefineasthenumberofdomesticcompany-operatedShacksopenfor24monthsorlonger.EffectiveDecember29th,2016,wechangedourmethodologyforcalculatingsame-ShacksaleswherebyShacksenterthecomparablebaseatthebeginningoftheir25thfullfiscalmonth,whereaspreviouslytheyenteredatthebeginningoftheir105thfullfiscalweek.

Shacksaleswere$91.1millionforthethirteenweeksendedSeptember27,2017comparedto$71.9millionforthethirteenweeksendedSeptember28,2016,anincreaseof$19.2 millionor26.8%. The growth in Shack sales was primarily driven by the opening of 21newdomestic company-operated Shacks betweenSeptember28,2016andSeptember27,2017,partiallyoffsetbylostrevenueduetohurricane-relatedShackclosures,whichweestimatetobeapproximately$0.3million.Same-Shacksalesdecreased$0.9million,or1.6%duringthethirteenweeksendedSeptember27,2017,whichexcludescomparableperiodsalesduringhurricane-relatedclosures.Thedecreaseinsame-Shacksalesisduetoadecreaseinguesttrafficof3.8%.partiallyoffsetbyacombinedincreaseof2.2%inpriceandsalesmix.Forpurposesofcalculatingsame-Shacksalesgrowth,Shacksalesfor39ShackswereincludedinthecomparableShackbase.

28|Shake Shack Inc. Form10-Q

TableofContents

Shacksaleswere$253.3millionforthethirty-nineweeksendedSeptember27,2017comparedto$188.4millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$64.9millionor34.4%.Theincreaseisprimarilyduetotheopeningof21newdomesticcompany-operatedShacksbetweenSeptember28,2016andSeptember27,2017.Same-Shacksalesdecreased$2.7million,or1.9%.Thedecreaseinsame-Shacksalesisprimarilyduetodecreasedguesttrafficof3.8%,partiallyoffsetbyacombinedincreaseof1.9%inpriceandsalesmix.Forpurposesofcalculatingsame-Shacksalesgrowth,Shacksalesfor39ShackswereincludedinthecomparableShackbase.

Licensing RevenueLicensingrevenueiscomprisedoflicensefees,openingfeesforcertainlicensedShacksandterritoryfees.LicensefeesarecalculatedasapercentageofsalesandterritoryfeesarepaymentsfortheexclusiverighttodevelopShacksinaspecificgeographicarea.

Licensingrevenuewas$3.5millionforthethirteenweeksendedSeptember27,2017comparedto$2.7millionforthethirteenweeksendedSeptember28,2016,anincreaseof$0.8millionor30.2%.Licensingrevenuewas$9.4millionforthethirty-nineweeksendedSeptember27,2017comparedto$6.8millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$2.6millionor39.0%.Theincreaseforthethirteenweekperiodwasprimarilydrivenby17netnewlicensedShacksopenedbetweenSeptember28,2016andSeptember27,2017.Theincreaseforthethirty-nineweekperiodwasprimarilydrivenby17netnewlicensed Shacks opened between September 28, 2016 and September 27, 2017 as well as $0.5 million of previously deferred royalty revenue recognized inconnectionwiththeinitialpublicationoftheShake Shack book,partiallyoffsetbylowerrevenuefromShacksintheMiddleEastasaresultofmacroeconomicandgeopoliticalvolatileconditions.

Food and Paper CostsFood and paper costs include the direct costs associated with food, beverage and packaging of our menu items. The components of food and paper costs arevariablebynature,changingwithsalesvolume,andareimpactedbymenumixandfluctuationsincommoditycosts.

Foodandpapercostswere$25.8millionforthethirteenweeksendedSeptember27,2017comparedto$20.4millionforthethirteenweeksendedSeptember28,2016,anincreaseof$5.4millionor26.3%.Foodandpapercostswere$71.6millionforthethirty-nineweeksendedSeptember27,2017comparedto$53.5millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$18.1millionor33.8%.Theincreasesforthethirteenandthirty-nineweekperiodswereprimarilyduetotheopeningof21newdomesticcompany-operatedShacksbetweenSeptember28,2016andSeptember27,2017.

AsapercentageofShacksales, foodandpapercostsdecreasedto28.3%forthethirteenweeksendedandthirty-nineweeksendedSeptember27,2017from28.4%forthethirteenweeksendedandthirty-nineweeksendedSeptember28,2016.ThisdecreasewasprimarilytheresultofmenupriceincreasesimplementedinDecember2016,partiallyoffsetbyincreasedpromotionalactivityandfoodwasteassociatedwithhurricane-relatedShackclosures.

Labor and Related ExpensesLaborandrelatedexpensesincludedomesticcompany-operatedShack-levelhourlyandmanagementwages,bonuses,payrolltaxes,equity-basedcompensation,workers' compensationexpenseandmedical benefits. Asweexpect withothervariable expenseitems, weexpect laborcosts togrowasourShacksalesgrow.Factors that influence labor costs include minimumwageandpayroll taxlegislation, health care costs andthe performance of our domestic company-operatedShacks.

Labor and related expenses were $23.8 million for the thirteen weeks ended September 27, 2017 compared to $18.2 million for the thirteen weeks endedSeptember28,2016,anincreaseof$5.6millionor30.7%.Laborandrelatedexpenseswere$66.7millionforthethirty-nineweeksendedSeptember27,2017comparedto$46.6millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$20.1millionor43.0%.Theseincreasesforthethirteenandthirty-nineweekperiodswereprimarilyduetotheopeningof21newdomesticcompany-operatedShacksbetweenSeptember28,2016andSeptember27,2017.

As a percentage of Shack sales, labor andrelated expenses increasedto26.1%and26.3%forthethirteen and thirty-nine weeks endedSeptember 27, 2017 ,respectively,comparedto25.3%and24.8%forthethirteenandthirty-nineweeksendedSeptember28,2016,respectively.Theincreasesforthethirteenandthirty-nineweekperiodswereprimarilyduetoincreasesinhourlywagesthatwereimplementedattheendoffiscal2016,investmentsinourmanagementteamtosupportfuturegrowthandtheopeningofShacksatvariousvolumes.

Shake Shack Inc. Form10-Q|29

TableofContents

Other Operating ExpensesOtheroperatingexpensesconsistofShack-levelmarketingexpenses,utilities,repairandmaintenancecosts,andotheroperatingexpensesincidentaltooperatingourdomesticcompany-operatedShacks,suchasnon-perishablesupplies,creditcardfeesandpropertyinsurance.

Otheroperatingexpenseswere$9.2millionforthethirteenweeksendedSeptember27,2017comparedto$6.6millionforthethirteenweeksendedSeptember28,2016,anincreaseof$2.6millionor40.3%.Otheroperatingexpenseswere$25.4millionforthethirty-nineweeksendedSeptember27,2017comparedto$17.5millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$7.9millionor45.2%.Theincreasesforthethirteenandthirty-nineweekperiodswereprimarilyduetotheopeningof21newdomesticcompany-operatedShacksbetweenSeptember28,2016andSeptember27,2017.

As a percentage of Shack sales, other operating expenses increased to10.1%and10.0%for the thirteen and thirty-nine weeks ended September 27, 2017 ,respectively,comparedto9.2%and9.3%forthethirteenandthirty-nineweeksendedSeptember28,2016.Theincreasewasprimarilyduetocertainhigherfixedoperatingexpenses,deleveragefromsame-ShacksalesandtheintroductionofShacksatvariousvolumesintothesystem.

Occupancy and Related ExpensesOccupancyandrelatedexpensesconsistofShack-leveloccupancyexpenses(includingrent,commonareaexpensesandcertainlocaltaxes),excludingpre-openingcosts,whicharerecordedseparately.

Occupancy and related expenses were $7.5 million for the thirteen weeks endedSeptember 27, 2017 compared to$6.0 million for the thirteen weeks endedSeptember28,2016,anincreaseof$1.5millionor25.2%.Occupancyandrelatedexpenseswere$20.7millionforthethirty-nineweeksendedSeptember27,2017comparedto$15.5millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$5.2millionor33.5%.Theincreasesforthethirteenandthirty-nineweekperiodswereprimarilyduetotheopeningof21newdomesticcompany-operatedShacksbetweenSeptember28,2016andSeptember27,2017.

AsapercentageofShacksales,occupancyandrelatedexpensesdecreasedto8.3%forthethirteenweeksendedSeptember27,2017from8.4%forthethirteenweeksendedSeptember 28, 2016 , primarily due to the increased number of leases where we are deemedto be the accounting owner and for which less rentexpenseisrecognized.ThiswaspartiallyoffsetbytheintroductionofShacksatvariousvolumesintothesystem.Forthethirty-nineweeksendedSeptember27,2017andSeptember28,2016,occupancyandrelatedexpensesasapercentageofShacksalesremainedconstantat8.2%.

General and Administrative ExpensesGeneral andadministrative expenses consist of costs associatedwithcorporate andadministrative functionsthat support Shackdevelopment andoperations, aswellasequity-basedcompensationexpense.

Generalandadministrativeexpenseswere$9.2millionforthethirteenweeksendedSeptember27,2017comparedto$7.9millionforthethirteenweeksendedSeptember28,2016,anincreaseof$1.3millionor16.7%.Generalandadministrativeexpenseswere$27.4millionforthethirty-nineweeksendedSeptember27,2017comparedto$22.3millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$5.1millionor22.8%.Theincreaseforthethirteenweekperiodwasprimarilydrivenbyhigherpayrollexpensesfromincreasedheadcountatourhomeofficetosupportourgrowthplansanddevelopercostsrelatedtoourdigitalplatforms.Theincreaseforthethirty-nineweekperiodwasprimarilydrivenbytheaforementionedcostsaswellascostsincurredinconnectionwithourexecutivetransitionandtherecognitionofpreviouslydeferredcostsrelatedtotheinitialpublicationoftheShake Shack book.

Asapercentageoftotalrevenue,generalandadministrativeexpensesdecreasedto9.7%and10.4%forthethirteenandthirty-nineweeksendedSeptember27,2017,respectively,from10.6%and11.4%forthethirteenandthirty-nineweeksendedSeptember28,2016,respectively.ThesedecreaseswereprimarilyduetotheincreasedlevelofShacksales.

Depreciation ExpenseDepreciationexpenseconsistsofthedepreciationoffixedassets,includingleaseholdimprovementsandequipment.

Depreciationexpensewas$5.6millionforthethirteenweeksendedSeptember27,2017comparedto$3.7millionforthethirteenweeksendedSeptember28,2016,anincreaseof$1.9millionor50.7%. Depreciationexpensewas$15.6millionforthethirty-nine weeksendedSeptember 27, 2017comparedto$10.2millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$5.4millionor52.6%.Theincreasesforthethirteenandthirty-nineweekperiodsweredueprimarilytoincrementaldepreciationof

30|Shake Shack Inc. Form10-Q

TableofContents

propertyandequipmentrelatedtotheopeningof21newdomesticcompany-operatedShacksbetweenSeptember28,2016andSeptember27,2017.

Asapercentageoftotalrevenue,depreciationexpenseincreasedto5.9%forboththethirteenandthirty-nineweeksendedSeptember27,2017comparedto5.0%and5.2%forthethirteenandthirty-nineweeksendedSeptember28,2016,respectively,primarilyduetothedeleveragefromsame-ShacksalesandtheentryofShacksatvariousvolumesintothesystem.

Pre-Opening CostsPre-openingcostsconsistprimarilyoflegalfees,rent,managers'salaries,trainingcosts,employeepayrollandrelatedexpenses,coststorelocateandcompensateShackmanagementteamspriortoanopeningandwages,aswellastravelandlodgingcostsforouropeningtrainingteam.Allsuchcostsincurredpriortotheopeningofadomesticcompany-operatedShackareexpensedintheperiodinwhichtheexpensewasincurred.Pre-openingcostscanfluctuatesignificantlyfromperiodtoperiod,basedonthenumberandtimingofdomesticcompany-operatedShackopeningsandthespecificpre-openingcostsincurredforeachdomesticcompany-operatedShack.Additionally,domesticcompany-operatedShackopeningsinnewgeographicmarketareaswillinitiallyexperiencehigherpre-openingcoststhanourestablishedgeographicmarketareas,suchastheNewYorkCitymetropolitanarea,wherewehavegreatereconomiesofscaleandincurlowertravelandlodgingcostsforourtrainingteam.

Pre-openingcostswere$2.7millionforthethirteenweeksendedSeptember27,2017comparedto$2.6millionforthethirteenweeksendedSeptember28,2016,anincreaseof$0.1millionor2.8%.Pre-openingcostswere$7.0millionforthethirty-nineweeksendedSeptember27,2017comparedto$6.7millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$0.3millionor3.8%.Thevariancesforthethirteenandthirty-nineweekperiodswereduetothetimingandtotalnumberofnewdomesticcompany-operatedShacksexpectedtoopen.

Loss on Disposal of Property and EquipmentLossondisposalofpropertyandequipmentrepresentsthenetbookvalueofassetsthathavebeenretiredandconsistsprimarilyoffurnitureandfixturesthatwerereplacedinthenormalcourseofbusiness.

Thelossondisposalofpropertyandequipmentforthethirteenandthirty-nineweeksendedSeptember27,2017was$0.2millionand$0.3million,respectively.Thelossondisposalofpropertyandequipmentforthethirteenandthirty-nineweeksendedSeptember28,2016wasnotmaterial.

Other Income, NetOtherincome,netconsistsofinterestincome,dividendincomeandnetrealizedgainsandlossesfromthesaleofmarketablesecurities.

Otherincome,netforthethirteenandthirty-nineweeksendedSeptember27,2017was$0.2millionand$0.6million,respectively.Otherincome,netforboththethirteenandthirty-nineweeksendedSeptember28,2016was$0.2million.Theincreaseforthethirty-nineweekperiodwasprimarilyduetoincreaseddividendincomeintheperiod.

Interest ExpenseInterestexpenseprimarilyconsistsofamortizationofdeferredfinancingcosts,imputedinterestondeferredcompensation,interestonthecurrentportionofourliabilitiesundertheTaxReceivableAgreement,imputedinterestonourdeemedlandlordfinancingliabilityaswellasinterestandfeesonourRevolvingCreditFacility.

Interestexpenseforthethirteenandthirty-nineweeksendedSeptember27,2017was$0.5millionand$1.1million,respectively,comparedto$0.1millionand$0.3millionforthethirteenandthirty-nineweeksendedSeptember28,2016.Theseincreaseswereprimarilyduetotheincreasednumberofleaseswherewearedeemedtobetheaccountingowner.

Income Tax ExpenseWearethesolemanagingmemberofSSEHoldings,whichistreatedasapartnershipforU.S.federalandmostapplicablestateandlocalincometaxpurposes.Asa partnership, SSEHoldings is not subject to U.S. federal and certain state and local incometaxes. Anytaxable incomeor loss generated by SSEHoldings ispassedthroughtoandincludedinthetaxableincomeorlossofits members, includingus, onaproratabasis. Wearesubject toU.S.federal incometaxes, inadditiontostateandlocalincometaxeswithrespecttoourallocableshareofanytaxableincomeorlossgeneratedbySSEHoldings.

Shake Shack Inc. Form10-Q|31

TableofContents

Incometaxexpensewas$2.5millionforthethirteenweeksendedSeptember27,2017comparedto$2.4millionforthethirteenweeksendedSeptember28,2016.Oureffectiveincometaxratedecreasedto24.1%forthethirteenweeksendedSeptember27,2017from26.5%forthethirteenweeksendedSeptember28,2016.Thedecreasewasdrivenbyabenefitrelatedtoanadjustmentrecognizedinconnectionwiththefilingofourprioryeartaxreturnsandhighertaxcredits,whichwerepartiallyoffsetbytheincreaseinourownershipinterestinSSEHoldingsandhigherforeignwithholdingtaxes.

Incometaxexpensewas$7.5millionforthethirty-nineweeksendedSeptember27,2017comparedto$6.1millionforthethirty-nineweeksendedSeptember28,2016 . Our effective income tax rate increase d to 27.5% for the thirty-nine weeks ended September 27, 2017 from 26.6% for the thirty-nine weeks endedSeptember28,2016.

AsourownershipinterestinSSEHoldingsincreases,ourshareofthetaxableincomeofSSEHoldingswillalsoincrease.Whencomparedtoconsolidatedpre-taxincome,thiswillresultinincreasestooureffectiveincometaxrate.Ourweighted-averageownershipinterestinSSEHoldingsincreasedto70.9%and70.3%forthe thirteen and thirty-nine weeks ended September 27, 2017 , respectively, compared to 66.1% and 61.5% for the thirteen and thirty-nine weeks endedSeptember28,2016,respectively.Thisincreaseinownershipinterestwastheprimarydriverfortheincreaseinoureffectiveincometaxrateforthethirty-nineweekperiod,partiallyoffsetbyabenefitrelatedtoanadjustmentrecognizedinconnectionwiththefilingofourprioryeartaxreturnsandhighertaxcredits.

Net Income Attributable to Non-Controlling InterestsWe are the sole managing member of SSE Holdings and have the sole voting power in, and control the management of, SSE Holdings. Accordingly, weconsolidatethefinancialresultsofSSEHoldingsandreportanon-controllinginterestonourConsolidatedStatementsofIncome,representingtheportionofnetincomeattributabletotheothermembersofSSEHoldings.TheLLCAgreementofSSEHoldingsprovidesthatholdersofLLCInterestsmay,fromtimetotime,requireSSEHoldingstoredeemalloraportionoftheirLLCInterestsfornewly-issuedsharesofClassAcommonstockonaone-for-onebasis.Inconnectionwithanyredemptionorexchange, wewill receiveacorrespondingnumberofLLCInterests, increasingourtotal ownershipinterest inSSEHoldings.TheweightedaverageownershippercentagesfortheapplicablereportingperiodsareusedtoattributenetincomeandothercomprehensiveincometoShakeShackInc.andthenon-controllinginterestholders.

Netincomeattributabletonon-controllinginterestswas$2.9millionand$3.0millionforthethirteenweeksendedSeptember27,2017andSeptember28,2016,respectively,adecreaseof$0.1millionor5.0%.Thisdecreasewasdrivenbythedecreaseinthenon-controllinginterestholders'weightedaverageownership,whichwas29.1%and33.9%,forthethirteenweeksendedSeptember27,2017andSeptember28,2016,respectively.

Netincomeattributabletonon-controllinginterestswas$7.8millionand$8.2millionforthethirty-nineweeksendedSeptember27,2017andSeptember28,2016, respectively, adecreaseof$0.4millionor4.8%. This decrease was primarily driven by a decrease in the non-controlling interest holders' weighted averageownership,whichwas29.7%and38.5%forthirty-nineweeksendedSeptember27,2017andSeptember28,2016,respectively.

32|Shake Shack Inc. Form10-Q

TableofContents

NON-GAAP FINANCIAL MEASURES

To supplement the consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles(“GAAP”),weusethefollowingnon-GAAPfinancialmeasures:Shack-leveloperatingprofit,Shack-leveloperatingprofitmargin,EBITDA,adjustedEBITDA,adjusted EBITDAmargin, adjusted proformanet incomeandadjusted proformaearnings per fully exchangedanddiluted share (collectively the "non-GAAPfinancialmeasures").

Shack-Level Operating ProfitShack-level operating profit is defined as Shack sales less Shack-level operating expenses including food and paper costs, labor and related expenses, otheroperatingexpensesandoccupancyandrelatedexpenses.

How This Measure Is UsefulWhen used in conjunction with GAAPfinancial measures, Shack-level operating profit and Shack-level operating profit margin are supplemental measures ofoperatingperformancethatwebelieveareusefulmeasurestoevaluatetheperformanceandprofitabilityofourShacks.Additionally,Shack-leveloperatingprofitand Shack-level operating profit margin are key metrics used internally by our management to develop internal budgets and forecasts, as well as assess theperformanceofourShacksrelativetobudgetandagainstpriorperiods.Itisalsousedtoevaluateemployeecompensationasitservesasametricincertainofourperformance-based employee bonus arrangements. We believe presentation of Shack-level operating profit and Shack-level operating profit margin providesinvestorswithasupplementalviewofouroperatingperformancethatcanprovidemeaningfulinsightstotheunderlyingoperatingperformanceofourShacks,asthese measures depict the operating results that are directly impacted by our Shacks and exclude items that may not be indicative of, or are unrelated to, theongoingoperationsofourShacks.Itmayalsoassistinvestorstoevaluateourperformancerelativetopeersofvarioussizesandmaturitiesandprovidesgreatertransparencywithrespecttohowourmanagementevaluatesourbusiness,aswellasourfinancialandoperationaldecision-making.

Limitations of the Usefulness of this MeasureShack-leveloperatingprofitandShack-leveloperatingprofitmarginmaydifferfromsimilarlytitledmeasuresusedbyothercompaniesduetodifferentmethodsofcalculation.PresentationofShack-leveloperatingprofitandShack-leveloperatingprofitmarginisnotintendedtobeconsideredinisolationorasasubstitutefor,orsuperiorto,thefinancialinformationpreparedandpresentedinaccordancewithGAAP.Shack-leveloperatingprofitexcludescertaincosts,suchasgeneralandadministrative expenses and pre-opening costs, which are considered normal, recurring cash operating expenses and are essential to support the operation anddevelopmentofourShacks.Therefore,thismeasuremaynotprovideacompleteunderstandingoftheoperatingresultsofourcompanyasawholeandShack-leveloperating profit and Shack-level operating profit margin should be reviewed in conjunction with our GAAP financial results. A reconciliation of Shack-leveloperatingprofittooperatingincome,themostdirectlycomparableGAAPfinancialmeasure,isasfollows.

Shake Shack Inc. Form10-Q|33

TableofContents

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(dollar amounts in thousands)September 27

2017 September 28

2016 September 27

2017 September 28

2016Operatingincome $ 10,610 $ 9,170 $ 27,975 $ 22,817Less: Licensingrevenue 3,509 2,696 9,416 6,774Add: Generalandadministrativeexpenses 9,204 7,885 27,352 22,265 Depreciationexpense 5,604 3,719 15,610 10,229 Pre-openingcosts 2,670 2,598 6,961 6,708 Lossondisposalofpropertyandequipment 204 — 317 —Shack-leveloperatingprofit $ 24,783 $ 20,676 $ 68,799 $ 55,245

Totalrevenue $ 94,609 $ 74,567 $ 262,674 $ 195,204Less:licensingrevenue 3,509 2,696 9,416 6,774Shacksales $ 91,100 $ 71,871 $ 253,258 $ 188,430

Shack-leveloperatingprofitmargin 27.2% 28.8% 27.2% 29.3%

EBITDA and Adjusted EBITDAEBITDAis defined as net income before interest expense (net of interest income), income tax expense and depreciation and amortization expense. AdjustedEBITDAisdefinedasEBITDA(asdefinedabove)excludingequity-basedcompensationexpense,deferredrentexpense,lossesonthedisposalofpropertyandequipment, as well as certain non-recurringitemsthat wedon't believe directly reflect our core operations andmaynot beindicative of our recurringbusinessoperations.

How These Measures Are UsefulWhenusedinconjunctionwithGAAPfinancialmeasures,EBITDAandAdjustedEBITDAaresupplementalmeasuresofoperatingperformancethatwebelieveareusefulmeasurestofacilitatecomparisonstohistoricalperformanceandcompetitors'operatingresults.AdjustedEBITDAisakeymetricusedinternallybyourmanagementtodevelopinternalbudgetsandforecastsandalsoservesasametricinourperformance-basedequityincentiveprogramsandcertainofourbonusarrangements. We believe presentation of EBITDA and Adjusted EBITDA provides investors with a supplemental view of our operating performance thatfacilitates analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operatingperformance.

Limitations of the Usefulness of These MeasuresEBITDA and Adjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation ofEBITDAandAdjustedEBITDAisnotintendedtobeconsideredinisolationorasasubstitutefor,orsuperiorto,thefinancialinformationpreparedandpresentedinaccordancewithGAAP.EBITDAandAdjustedEBITDAexcludecertainnormalrecurringexpenses. Therefore, thesemeasuresmaynotprovideacompleteunderstandingofourperformanceandshouldbereviewedinconjunctionwithourGAAPfinancialmeasures.AreconciliationofEBITDAandAdjustedEBITDAtonetincome,themostdirectlycomparableGAAPmeasure,isasfollows.

34|Shake Shack Inc. Form10-Q

TableofContents

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands)September 27

2017 September 28

2016 September 27

2017 September 28

2016Netincome $ 7,870 $ 6,789 $ 19,916 $ 16,689Depreciationexpense 5,604 3,719 15,610 10,229Interestexpense,net 456 66 1,086 198Incometaxexpense 2,494 2,443 7,537 6,058EBITDA 16,424 13,017 44,149 33,174

Equity-basedcompensation 1,289 1,577 3,823 3,817Deferredrent 240 560 767 1,807Lossondisposalofpropertyandequipment 204 — 317 —Executivetransitioncosts(1) 13 — 664 —ADJUSTED EBITDA $ 18,170 $ 15,154 $ 49,720 $ 38,798

(1) Represents fees paid to an executive recruiting firm, a non-recurring signing bonus and certain other benefits paid upon the hiring of our chief financial officer.

Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted ShareAdjusted pro forma net income represents net income attributable to Shake Shack Inc. assuming the full exchange of all outstanding SSE Holdings, LLCmembershipinterests("LLCInterests")forsharesofClassAcommonstock,adjustedforcertainnon-recurringitemsthatwedon'tbelievedirectlyreflectourcoreoperations andmaynot be indicative of our recurring business operations. Adjusted pro formaearnings per fully exchangedanddiluted share is calculated bydividingadjustedproformanetincomebytheweighted-averagesharesofClassAcommonstockoutstanding,assumingthefullexchangeofalloutstandingLLCInterests,aftergivingeffecttothedilutiveeffectofoutstandingequity-basedawards.

How These Measures Are UsefulWhenusedinconjunctionwithGAAPfinancialmeasures,adjustedproformanetincomeandadjustedproformaearningsperfullyexchangedanddilutedshareare supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to ourcompetitors. Byassumingthe full exchangeof all outstandingLLCInterests, webelievethesemeasures facilitate comparisons with other companies that havedifferentorganizationalandtaxstructures,aswellascomparisonsperiodoverperiodbecauseiteliminatestheeffectofanychangesinnetincomeattributabletoShake Shack Inc. driven by increases in our ownership of SSEHoldings, which are unrelated to our operating performance, and excludes items that are non-recurringormaynotbeindicativeofourongoingoperatingperformance.

Limitations of the Usefulness of These MeasuresAdjustedproformanet incomeandadjustedproformaearningsperfullyexchangedanddilutedsharemaydiffer fromsimilarlytitledmeasuresusedbyothercompaniesduetodifferentmethodsofcalculation.Presentationofadjustedproformanetincomeandadjustedproformaearningsperfullyexchangedanddilutedshareshouldnotbeconsideredalternativestonetincomeandearningspershare,asdeterminedunderGAAP.Whilethesemeasuresareusefulinevaluatingourperformance,itdoesnotaccountfortheearningsattributabletothenon-controllinginterestholdersandthereforedoesnotprovideacompleteunderstandingofthenet income attributable to Shake Shack Inc. Adjusted pro forma net income and adjusted pro forma earnings per fully exchanged and diluted share should beevaluatedinconjunctionwithourGAAPfinancialresults.AreconciliationofadjustedproformanetincometonetincomeattributabletoShakeShackInc.,themostdirectlycomparableGAAPmeasure,andthecomputationofadjustedproformaearningsperfullyexchangedanddilutedsharearesetforthbelow.

Shake Shack Inc. Form10-Q|35

TableofContents

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands, except per share amounts)September 27

2017 September 28

2016 September 27

2017 September 28

2016Numerator: NetincomeattributabletoShakeShackInc. $ 4,997 $ 3,766 $ 12,143 $ 8,526 Adjustments:

Reallocationofnetincomeattributabletonon-controllinginterestsfromtheassumedexchangeofLLCInterests(1) 2,873 3,023 7,773 8,163

Executivetransitioncosts(2) 13 — 664 — Incometaxexpense(3) (1,695) (1,318) (3,448) (3,171) Adjustedproformanetincome $ 6,188 $ 5,471 $ 17,132 $ 13,518

Denominator:

Weighted-averagesharesofClassAcommonstockoutstanding—diluted 26,477 24,554 26,248 22,805

Adjustments:

AssumedexchangeofLLCInterestsforsharesofClassAcommonstock(1) 10,693 12,314 10,882 13,988

Adjustedproformafullyexchangedweighted-averagesharesofClassAcommonstockoutstanding—diluted 37,170 36,868 37,130 36,793

Adjustedproformaearningsperfullyexchangedshare—diluted $ 0.17 $ 0.15 $ 0.46 $ 0.37

(1) Assumes the exchange of all outstanding LLC Interests for shares of Class A common stock, resulting in the elimination of non-controlling interests and recognition of netincome attributable to non-controlling interests.

(2) Represents fees paid to an executive recruiting firm, a non-recurring signing bonus and certain other benefits paid upon the hiring of our chief financial officer.(3) Represents the tax effect of the aforementioned adjustments and pro forma adjustments to reflect corporate income taxes at assumed effective tax rates of 40.4% and 39.1%

for the thirteen and thirty-nine weeks ended September 27, 2017 , respectively, and 40.7% and 40.6% for the and thirteen and thirty-nine weeks ended September 28, 2016 ,respectively. Amounts include provisions for U.S. federal and certain state and local income taxes, assuming the highest statutory rates apportioned to each applicablestate and local jurisdiction, and exclude the effect of any adjustments related to the filing of prior year tax returns.

36|Shake Shack Inc. Form10-Q

TableofContents

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of CashOurprimarysourcesofliquidityarecashfromoperations,cashandcashequivalentsonhand,short-terminvestmentsandavailabilityunderourRevolvingCreditFacility.AsofSeptember27,2017,wemaintainedacashandcashequivalentsbalanceof$26.9million,ashort-terminvestmentsbalanceof$63.3millionandhad$19.3millionofavailabilityunderourRevolvingCreditFacility.

Our primary requirements for liquidity are to fund our working capital needs, operating lease obligations, capital expenditures, deemed landlord financingobligationsandgeneralcorporateneeds.Ourrequirementsforworkingcapitalarenotsignificantbecauseourguestspayfortheirfoodandbeveragepurchasesincashorondebitorcreditcardsatthetimeofthesaleandweareabletosellmanyofourinventoryitemsbeforepaymentisduetothesupplierofsuchitems.OurongoingcapitalexpendituresareprincipallyrelatedtoopeningnewShacks,existingShackcapitalinvestments(bothforremodelsandmaintenance), aswellasinvestmentsinourcorporateinfrastructure.

In addition, we are obligated to make payments to certain members of SSEHoldings under the Tax Receivable Agreement. As ofSeptember 27, 2017 ,suchobligations totaled$284.0 million . Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of futuretaxableincomeoverthetermoftheTaxReceivableAgreementand(ii)futurechangesintaxlaws.IfwedonotgeneratesufficienttaxableincomeintheaggregateoverthetermoftheTaxReceivableAgreementtoutilizethetaxbenefits,thenwewouldnotberequiredtomaketherelatedTRAPayments.AlthoughtheamountofanypaymentsthatmustbemadeundertheTaxReceivableAgreementmaybesignificant,thetimingofthesepaymentswillvaryandwillgenerallybelimitedtoonepaymentpermemberperyear.Theamountofsuchpaymentsarealsolimitedtotheextentweutilizetherelateddeferredtaxassets.ThepaymentsthatwearerequiredtomakewillgenerallyreducetheamountofoverallcashflowthatmighthaveotherwisebeenavailabletousortoSSEHoldings,butweexpectthecashtaxsavingswewillrealizefromtheutilizationoftherelateddeferredtaxassetstofundtherequiredpayments.

Webelievethatcashprovidedbyoperatingactivities, cashonhandandavailabilityundertheRevolvingCreditFacilitywillbesufficienttofundouroperatingleaseobligations,capitalexpenditures,deemedlandlordfinancingobligationsandworkingcapitalneedsforatleastthenext12monthsandtheforeseeablefuture.

Summary of Cash FlowsThefollowingtablepresentsasummaryofourcashflowsfromoperating,investingandfinancingactivities.

Thirty-Nine Weeks Ended

(in thousands)September 27

2017 September 28

2016

Netcashprovidedbyoperatingactivities $ 53,971 $ 40,522

Netcashusedininvestingactivities (41,455) (99,336)

Netcashprovidedbyfinancingactivities 2,764 192

Increase(decrease)incash 15,280 (58,622)

Cashatbeginningofperiod 11,607 70,849

Cashatendofperiod $ 26,887 $ 12,227

Operating ActivitiesForthethirty-nine weeksendedSeptember 27, 2017netcashprovidedbyoperating activities was$54.0millioncomparedto$40.5millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$13.5million.Thisincreasewasprimarilydrivenbytheopeningof21newdomesticcompany-operatedShacks.

Investing ActivitiesForthethirty-nineweeksendedSeptember27,2017netcashusedininvestingactivitieswas$41.5millioncomparedto$99.3millionforthethirty-nineweeksendedSeptember28,2016,adecreaseof$57.8million.Thisdecreasewasprimarilyduetoadecreaseinnetpurchasesofmarketablesecurities.

Shake Shack Inc. Form10-Q|37

TableofContents

Financing ActivitiesForthethirty-nineweeksendedSeptember27,2017netcashprovidedbyfinancingactivitieswas$2.8millioncomparedto$0.2millionforthethirty-nineweeksendedSeptember28,2016,anincreaseof$2.6million.Thisincreaseisprimarilyduetoanincreaseof$4.5millioninproceedsfromtheexerciseofemployeestockoptions,offsetby$1.5millioninpaymentsmadeundertheTaxReceivableAgreement.

Revolving Credit FacilityWemaintainaRevolvingCreditFacilitythatprovidesforarevolvingtotalcommitmentamountof$50.0million,ofwhich$20.0millionisavailableimmediately.The Revolving Credit Facility will mature and all amounts outstanding will be due and payable in February 2020. The Revolving Credit Facility permits theissuance of letters of credit uponour request of upto$10.0million. Borrowings under the RevolvingCredit Facility bear interest at either: (i) LIBORplus apercentagerangingfrom2.3%to3.3%or(ii)theprimerateplusapercentagerangingfrom0.0%to0.8%,dependingonthetypeofborrowingmadeundertheRevolving Credit Facility. As of September 27, 2017 , there were no amounts outstanding under the Revolving Credit Facility. We had $19.3 million ofavailability,asofSeptember27,2017,aftergivingeffectto$0.7millioninoutstandinglettersofcredit.

TheRevolvingCreditFacilityissecuredbyafirst-prioritysecurityinterestinsubstantiallyalloftheassetsofSSEHoldingsandtheguarantors.TheobligationsundertheRevolvingCreditFacilityareguaranteedbyeachofSSEHoldings'wholly-owneddomesticsubsidiaries(withcertainexceptions).

TheRevolvingCreditFacilitycontainsanumberofcovenantsthat,amongotherthings,restrictourabilityto,subjecttospecifiedexceptions,incuradditionaldebt;incuradditionalliensandcontingentliabilities;sellordisposeofassets;mergewithoracquireothercompanies;liquidateordissolveourselves;paydividendsormakedistributions;engageinbusinessesthatarenotinarelatedlineofbusiness;makeloans,advancesorguarantees;engageintransactionswithaffiliates;andmakeinvestments.Inaddition,theRevolvingCreditFacilitycontainscertaincross-defaultprovisions.Wearerequiredtomaintainaspecifiedconsolidatedfixed-chargecoverageratioandaspecifiedfundednetdebttoadjustedEBITDAratio,bothasdefinedundertheRevolvingCreditFacility.AsofSeptember27,2017,wewereincompliancewithallcovenants.

CONTRACTUAL OBLIGATIONS

TherehavebeennomaterialchangestothecontractualobligationsasdisclosedinourAnnualReportonForm10-KforthefiscalyearendedDecember28,2016,asamended,otherthanthosemadeintheordinarycourseofbusinessandaleaseenteredintoforanewhomeoffice.See"—Off-BalanceSheetArrangements”forfurtherdetails.

OFF-BALANCE SHEET ARRANGEMENTS

InAugust2017,weenteredintoaleaseforanewhomeoffice,withatermof15yearsandtwofive-yearrenewaloptions.Totalminimumleasepaymentsofovertheinitialtermoftheleaseamountto$34.6million.

There have been no other material changes to our off-balance sheet arrangements as disclosed in our Annual Report on Form10-Kfor th e fiscal year endedDecember28,2016,asamended.

38|Shake Shack Inc. Form10-Q

TableofContents

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Ourdiscussionandanalysisofourconsolidatedfinancial conditionandresults ofoperationsisbasedupontheaccompanyingcondensedconsolidatedfinancialstatementsandnotesthereto,whichhavebeenpreparedinaccordancewithGAAP.Thepreparationofthecondensedconsolidatedfinancialstatementsrequiresustomakeestimates,judgmentsandassumptions,whichwebelievetobereasonable,basedontheinformationavailable.Theseestimatesandassumptionsaffectthereportedamountsofassets,liabilities,revenuesandexpenses,andrelateddisclosuresofcontingentassetsandliabilities.Variancesintheestimatesorassumptionsusedtoactualexperiencecouldyieldmateriallydifferentaccountingresults. Onanongoingbasis, weevaluatethecontinuedappropriatenessofouraccountingpolicies andresultingestimates tomakeadjustments weconsiderappropriate underthefacts andcircumstances. Therehavebeennosignificant changestoourcriticalaccountingpoliciesasdisclosedinourAnnualReportonForm10-KforthefiscalyearendedDecember28,2016,asamended.

Recently Issued Accounting Pronouncements

See"Note2:SummaryofSignificantAccountingPolicies—RecentlyIssuedAccountingPronouncements”underPartI,Item1ofthisForm10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

TherehavebeennomaterialchangestoourexposuretomarketrisksasdescribedinPartII,Item7AofourAnnualReportonForm10-KforthefiscalyearendedDecember28,2016,asamended.

Item 4. Controls and Procedures.

DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted anevaluationoftheeffectivenessofourdisclosurecontrolsandprocedures(assuchtermisdefinedinRules13a-15(e)and15d-15(e)undertheExchangeAct)asofthe end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosurecontrolsandprocedureswereeffectiveasofsuchdate.OurdisclosurecontrolsandproceduresaredesignedtoensurethatinformationrequiredtobedisclosedinthereportswefileorsubmitundertheExchangeActisrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedintheSEC'srulesandformsandthatsuchinformationisaccumulatedandcommunicatedtomanagement,includingtheChiefExecutiveOfficerandChiefFinancialOfficer,toallowtimelydecisionsregardingrequireddisclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

TherewerenochangestoourinternalcontroloverfinancialreportingthatoccurredduringthequarterendedSeptember27,2017thathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.

Shake Shack Inc. Form10-Q|39

TableofContents

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

TheinformationrequiredbythisItemisincorporatedbyreferencetoPartI,Item1,Note13:CommitmentsandContingencies—LegalContingencies.

Item 1A. Risk Factors.

TherehavebeennomaterialchangeswithrespecttotheriskfactorsdisclosedinourAnnualReportonForm10-KforthefiscalyearendedDecember28,2016,asamended.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Notapplicable.

Item 5. Other Information.

None.

40|Shake Shack Inc. Form10-Q

TableofContents

Item 6. Exhibits.

ExhibitNumber

Incorporated by Reference FiledHerewith Exhibit Description Form Exhibit Filing Date

3.1

AmendedandRestatedCertificateofIncorporationofShakeShackInc.,effectiveFebruary4,2015

8-K

3.1

2/10/2015

3.2 AmendedandRestatedBylawsofShackShakeInc.,datedFebruary4,2015 8-K 3.2 2/10/2015 4.1 FormofClassACommonStockCertificate S-1/A 4.1 1/28/2015 31.1

CertificationofthePrincipalExecutiveOfficerpursuanttoSection302oftheSarbanes-OxleyActof2002

*

31.2

CertificationofthePrincipalFinancialOfficerpursuanttoSection302oftheSarbanes-OxleyActof2002

*

32

CertificationofPrincipalExecutiveOfficerandPrincipalFinancialOfficerpursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002

#

101.INS

XBRLInstanceDocument-theinstancedocumentdoesnotappearintheinteractivedatafilebecauseitsXBRLtagsareembeddedwithintheInlineXBRLdocument.

*

101.SCH XBRLTaxonomyExtensionSchemaDocument *

101.CAL XBRLTaxonomyExtensionCalculationLinkbaseDocument *

101.DEF XBRLTaxonomyExtensionDefinitionLinkbaseDocument *

101.LAB XBRLTaxonomyExtensionLabelLinkbaseDocument *

101.PRE XBRLTaxonomyExtensionPresentationLinkbaseDocument *

# Furnished herewith.

Shake Shack Inc. Form10-Q|41

TableofContents

SIGNATURESPursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,thereuntodulyauthorized.

Shake Shack Inc. (Registrant)

Date:November2,2017 By: /s/RandyGarutti RandyGarutti

ChiefExecutiveOfficer(PrincipalExecutiveOfficerandDulyAuthorizedOfficer)

Date:November2,2017 By: /s/TaraComonte TaraComonte

ChiefFinancialOfficer(PrincipalFinancialOfficerandDulyAuthorizedOfficer)

42|Shake Shack Inc. Form10-Q

Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I,RandyGarutti,certifythat:

1. IhavereviewedthisQuarterlyReportonForm10-QforthequarterlyperiodendedSeptember27,2017ofShakeShackInc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4. Theregistrant'sothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrantandhave:

(a) Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobedesignedunderoursupervision,toensurethat material informationrelatingtotheregistrant, includingits consolidatedsubsidiaries, is madeknowntousbyothers withinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and

(d) Disclosedinthisreportanychangeintheregistrant’sinternalcontroloverfinancialreportingthatoccurredduringtheregistrant’smostrecentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomateriallyaffect,theregistrant’sinternalcontroloverfinancialreporting;and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’sauditorsandtheauditcommitteeoftheregistrant’sboardofdirectors(orpersonsperformingtheequivalentfunctions):

(a) Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreportingwhicharereasonablylikelytoadverselyaffecttheregistrant’sabilitytorecord,process,summarizeandreportfinancialinformation;and

(b) Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrant’sinternalcontroloverfinancialreporting.

Date:November2,2017 /s/RandyGarutti RandyGarutti

ChiefExecutiveOfficer

Exhibit 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I,TaraComonte,certifythat:

1. IhavereviewedthisQuarterlyReportonForm10-QforthequarterlyperiodendedSeptember27,2017ofShakeShackInc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4. Theregistrant'sothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrantandhave:

(a) Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobedesignedunderoursupervision,toensurethat material informationrelatingtotheregistrant, includingits consolidatedsubsidiaries, is madeknowntousbyothers withinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and

(d) Disclosedinthisreportanychangeintheregistrant’sinternalcontroloverfinancialreportingthatoccurredduringtheregistrant’smostrecentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomateriallyaffect,theregistrant’sinternalcontroloverfinancialreporting;and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’sauditorsandtheauditcommitteeoftheregistrant’sboardofdirectors(orpersonsperformingtheequivalentfunctions):

(a) Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreportingwhicharereasonablylikelytoadverselyaffecttheregistrant’sabilitytorecord,process,summarizeandreportfinancialinformation;and

(b) Anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrant’sinternalcontroloverfinancialreporting.

Date:November2,2017 /s/TaraComonte TaraComonte

ChiefFinancialOfficer

Exhibit 32

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

InconnectionwiththeQuarterlyReportonForm10-QofShakeShackInc.(the“Company”),forthequarterlyperiodendedSeptember27,2017,asfiledwiththeSecuritiesandExchangeCommissiononthedatehereof(the“Report”),eachoftheundersignedofficersoftheCompanycertifiespursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002,that:

1. TheReportfullycomplieswiththerequirementsofSection13(a)or15(d)oftheSecuritiesExchangeActof1934;and2. TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresultsofoperationsoftheCompany.

Date:November2,2017 /s/RandyGarutti RandyGarutti ChiefExecutiveOfficer

Date:November2,2017 /s/TaraComonte TaraComonte ChiefFinancialOfficer