“The inflationary environment remains uncertain and we are planning for low double digit blended food and paper inflation throughout the rest of this year led by chicken, dairy and paper and packaging.”

In context

“of the U.S. dollar. We faced headwinds from stronger dollar during the quarter, a pressure that we anticipate will continue impacting this area of the business. Total shack level operating profit was $42 million or 18.8% of shack sales. Our shack level operating profit margin improved despite growing sales headwinds and low double digit inflationary pressures. In the second quarter, our food and paper costs were $66 million or 29.6% of Shack sales, down from 30.3% in the second quarter of 2021 and down 80 basis points quarter-over-quarter as our March price increase and 38 basis points benefit from credits related to our Biannual Leadership Retreat helped us offset a portion of the low double digit higher costs in our basket. Full details can be found in our shareholder letter on Page 12. The inflationary environment remains uncertain and we are planning for low double digit blended food and paper inflation throughout the rest of this year led by chicken, dairy and paper and packaging. But we're also facing significant incremental cost pressures in our crinkle cut fries stemming from historically high inflation in the potato market that has been passed along to us. Our paper and packaging costs rose around 20% year-over-year in the second quarter and we continue to plan for mid-teens percentage year-over-year for Fiscal 2022. Labor expense was $65.9 million or 29.5% of total Shack sales down from 30.7% in the prior quarter and up 50 basis points year-over-year. We continue to invest in our teams and have raised starting wages by high single digit year-over-year. As we work towards optimal staffing levels. We continue to invest in growing efficiencies within our own four walls and generating flow through on incremental sales. However, staffing pressures and elevated turn”