Shake Shack CEO Randy Garutti announced Monday morning that he will retire in 2024, after more than two decades with the chain. The board plans to retain him as an advisor following his CEO service through the end of 2024 to ensure a seamless transition.
Under Garutti’s leadership, Shake Shack has grown from a single hot dog cart in New York City to a public company that finished 2022 with nearly $925 million in sales, according to Technomic Ignite data. The chain has expanded to more than 500 restaurants in 33 states and 18 countries.
In the past several years, the company began expanding into the suburbs and began adding drive-thru locations, while also ramping up its digital presence with a bigger focus on mobile ordering, delivery, and kiosks.
In a letter to employees, Garutti wrote: “I’ve been lucky enough to experience boundless joy through this season of my life, and I know it’s time for the company to benefit from its next generation of leaders. Our current leadership team is an incredible group and is well positioned to drive the company forward to even greater heights. For the better part of the last two decades, Shake Shack has been my life’s work and I’ve never been more optimistic about our team, our leaders and what’s ahead for this company.”
Garutti also touted the company’s “Stand for Something Good” initiative, which includes environmental stewardship, a focus on internal promotions, partnerships with local non-profit organizations and schools, equality and inclusivity work, and more.
“It thrives, not because those words are on the wall and certainly not because of any single person. Our culture lives because of the decisions you continue to make day in and day out, through who you hire, what you choose to celebrate, and the powerful combination of hospitality and excellence you bring to every interaction. Even when we’ve made mistakes, we’ve always been a team who loves and respects each other, who listens, learns, fails, and triumphs – together. That is the secret in the ShackSauce, and I hope it always will be,” he said.
The board has launched an external search for his successor, and the search committee will be led by Chairman and company founder, Danny Meyer, and independent directors, Chuck Chapman, Jeff Lawrence, Lori George, and Josh Silverman.
In a statement, Meyer said Garutti developed a “devoted and avid following among our team members as an exceptional leader who always led his business with enlightened hospitality.”
“When we launched a hot dog cart out of Eleven Madison Park in 2001, and then three years later, turned it into Shake Shack – a kiosk in Madison Square Park – Randy asked for the ball. Shake Shack was an overnight hit, but it had not dawned on me that we might grow the business beyond its first park location until Randy urged that we do so with a second Shack, nearly five years later. Now, nearly 20 years and over 500 Shacks later, Randy has more than earned the richly-deserved opportunity to think about his next act,” Meyer said.
With news of Garutti’s impending retirement, the company reiterated its Q4 and fiscal year guidance. That includes:
Q4 guidance
- Total revenue of $276.25 million to $281.75 million, including licensing revenue of $10.25 million to $10.75 million
- Same-store sales to be up low-single digits year-over-year
- Store-level operating profit margin of approximately 19%
- Approximately 14 domestic company-operated openings
- Approximately 5 licensed openings.
Fiscal year guidance
- Total revenue of approximately $1.08 billion, growing about 20% year-over-year, including licensing revenue of $40.5 million to $41.0 million
- Same-store sales to grow by mid-single digits year-over-year
- Store-level operating profit margin of 19.7% to 20%, approximately 220 to 250 basis points improvement year-over-year
- Approximately 40 domestic company-operated openings
- Approximately 40 licensed openings
Shake Shack shares rose 4% Monday morning after this guidance was reiterated.
Contact Alicia Kelso at [email protected]