What Shake Shack, Inc. told the SEC could break it.

As a burger chain, Shake Shack is heavily exposed to commodity-cost inflation across beef, poultry, fries, grains, dairy and produce, with beef the single largest impact on its cost basket. Food and paper costs were 28.5% of Shack sales in 2025 (up from 28.2%), with the increase driven mainly by higher beef and other commodity costs. Commodity prices can spike from market changes, weather, disease, and supply interruptions, pressuring margins when the company cannot fully offset them with menu price increases.

“Additionally, we are heavily impacted by inflation across our basket with the largest impact on our cost of beef.”

Parts of Shake Shack's supply chain are imported and therefore tariff-exposed: its proprietary beef-patty blend and/or raw materials for beef patties primarily originate from the United States, Australia and Uruguay, and its mushrooms originate from the United States, the United Kingdom and China. U.S. tariffs (and foreign retaliation) could raise the cost of these imported inputs, and the company also flags that tariffs increase the construction and development costs of new Shacks, pressuring both food costs and unit-growth economics.

“our proprietary blend of beef patties and/or raw materials for beef patties primarily originate from the United States, Australia and Uruguay and our mushrooms originate from the United States, United Kingdom, and China.”

Shake Shack relies on a limited number of suppliers for major ingredients and concentrates volume: in fiscal 2025 it bought ground beef patties from 11 approved processors but ~38% from a single supplier, and it single-sources several items ('Shroom Burgers and ShackSauce from one supplier each; chicken and potato buns from only two suppliers each). It also relies on one national distribution company for the majority of its domestic distribution, and two distribution centers (serving New York/northern New Jersey and California) supply approximately 21% of company-operated Shacks. Cancellation, disruption or capacity failure at a key supplier, the distributor, or one of those distribution centers could cause product shortages and higher costs.

“During fiscal 2025, we purchased our (i) ground beef patties from 11 approved ground beef processors, with approximately 38% of our ground beef patties from one supplier; (ii) chicken breasts from two suppliers; (iii) potato buns from two suppliers; (iv) custard base from three suppliers; (v) 'Shroom Burgers from one supplier; (vi) crinkle cut fries from three suppliers; and (vii) ShackSauce from one supplier.”