“Importantly, our supply chain team has identified areas for cost efficiencies to help address persistent inflationary pressures, which we anticipate to start having an impact later this year with continued plans for focused improvement into 2024.”

In context

“ensed drive through Shack in Dubai. onto our restaurant profitability in the second quarter, Shack level operating profit was $54.9 million, or a 21% of Shack sales marking 240 basis points of expansion versus last year despite continued inflationary pressures across our four-wall P&L. food and paper costs were $75.8 million or a 29% of Shack sales down 100 basis points versus last year and 40 basis points versus the prior quarter. We benefited from improved waste trends in our Shacks and reduced packaging, small wares and condiment usage in our off-premise orders. Blended food and paper inflation rose high single digits year-over-year. Beef was up high single digits, as well as continued inflationary pressures in custard and buns, and an over 20% year-over-year increase in our fry costs. Importantly, our supply chain team has identified areas for cost efficiencies to help address persistent inflationary pressures, which we anticipate to start having an impact later this year with continued plans for focused improvement into 2024. Labor and related expenses were $75.2 million, or a 28.7% of Shack sales, down 80 basis points versus last year and down 170 basis points quarter-over-quarter. This quarter, we increased our focus on training to improve turnover and seek efficiencies across our operations, as well as introduce several new strategies to better control our labor expenses within the Shacks. Our second quarter has typically marked our strongest sales and profitability of the year, and requires more staffing than other quarters to support the higher demand. However, with our profitably enhancement strategies including dynamic sales and labor budgeting, working closely with our operators to drive more standardized labor scheduling practices, as well as early learnings on kiosk labor utilization and evolutions i”