EX-99.1 2 tm2426934d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

 

PRESS RELEASE

 

FOR IMMEDIATE RELEASE Contact: Etienne Marcus
  (818) 871-3000
  investorrelations@thecheesecakefactory.com

 

THE CHEESECAKE FACTORY REPORTS RESULTS FOR

THIRD QUARTER OF FISCAL 2024

 

CALABASAS HILLS, Calif. – October 29, 2024 – The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported financial results for the third quarter of fiscal 2024, which ended on October 1, 2024.

 

Total revenues were $865.5 million in the third quarter of fiscal 2024 compared to $830.2 million in the third quarter of fiscal 2023. Net income and diluted net income per share were $30.0 million and $0.61, respectively, in the third quarter of fiscal 2024.

 

The Company recorded pre-tax net income of $2.5 million related to impairment of assets and lease termination income and Fox Restaurant Concepts (“FRC”) acquisition-related expenses. Excluding the after-tax impact of these items, adjusted net income and adjusted net income per share for the third quarter of fiscal 2024 were $28.2 million and $0.58, respectively. Please see the Company’s reconciliation of non-GAAP financial measures at the end of this press release.

 

Comparable restaurant sales at The Cheesecake Factory restaurants increased 1.6% year-over-year in the third quarter of fiscal 2024.

 

“The third quarter was our fourth consecutive quarter of year-over-year top- and bottom-line growth, reflecting our strong operational execution, the benefits of our scale, and the delicious, memorable experiences we offer across our restaurant concepts,” said David Overton, Chairman and Chief Executive Officer. “We are capturing market share as evidenced by the continued strong outperformance in comparable sales and traffic at The Cheesecake Factory restaurants versus the broader casual dining industry. Execution within our restaurants was exceptional with our operators delivering significant improvements in labor productivity, hourly staff and manager retention, and guest satisfaction scores.”

 

“We opened four new restaurants during the third quarter and, subsequent to quarter-end, opened three additional restaurants across various concepts for a total of 17 new openings year-to-date. Our ability to execute against our pipeline and successfully expand our restaurant footprint reinforces our confidence in our ability to achieve our near-term and longer-term development objectives. Looking ahead we remain focused on operational excellence, growing profitably and creating long-term, sustainable value into 2025 and beyond.”

 

 

26901 Malibu Hills Road, Calabasas Hills, CA 91301 • Telephone (818) 871-3000

 

 

 

 

Development

 

During the third quarter of fiscal 2024, the Company opened four new restaurants, including one Flower Child location and three FRC restaurants. Subsequent to quarter-end, the Company opened three new restaurants, including one North Italia, one Flower Child and one Blanco location.

 

The Company continues to expect to open as many as 22 new restaurants in fiscal 2024, including as many as three The Cheesecake Factory restaurants, six North Italia restaurants, six to seven Flower Child locations, and eight FRC restaurants.

 

Liquidity and Capital Allocation

 

As of October 1, 2024, the Company had total available liquidity of $288.7 million, including a cash balance of $52.2 million and availability on its revolving credit facility of $236.5 million. Total principal amount of debt outstanding was $475 million, including $345 million in principal amount of 0.375% convertible senior notes due 2026 and $130 million in principal amount drawn on the Company’s revolving credit facility.

 

The Company repurchased approximately 29,450 shares of its stock at a cost of $1.1 million in the third quarter of fiscal 2024. In addition, the Company’s Board of Directors has declared a quarterly dividend of $0.27 per share to be paid on November 26, 2024, to shareholders of record at the close of business on November 13, 2024.

 

Conference Call and Webcast

 

The Company will hold a conference call to review its results for the third quarter of fiscal 2024 today at 2:00 p.m. Pacific Time. The conference call will be webcast live on the Company’s website at investors.thecheesecakefactory.com and a replay of the webcast will be available through November 28, 2024.

 

About The Cheesecake Factory Incorporated

 

The Cheesecake Factory Incorporated is a leader in experiential dining. We are culinary forward and relentlessly focused on hospitality. Delicious, memorable experiences created by passionate people – this defines who we are and where we are going. We currently own and operate 344 restaurants throughout the United States and Canada under brands including The Cheesecake Factory®, North Italia®, Flower Child® and a collection of other FRC brands. Internationally, 34 The Cheesecake Factory® restaurants operate under licensing agreements. Our bakery division operates two facilities that produce quality cheesecakes and other baked products for our restaurants, international licensees and third-party bakery customers. In 2024, we were named to the FORTUNE Magazine “100 Best Companies to Work For®” list for the eleventh consecutive year. To learn more, visit www.thecheesecakefactory.com, www.northitalia.com, www.iamaflowerchild.com and www.foxrc.com.

 

From Fortune. ©2024 Fortune Media IP Limited. All rights reserved. Used under license. Fortune® and Fortune 100 Best Companies to Work For® are registered trademarks of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, The Cheesecake Factory Incorporated.

 

 

26901 Malibu Hills Road, Calabasas Hills, CA 91301 • Telephone (818) 871-3000

 

 

 

 

Safe Harbor Statement

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, without limitation, statements regarding the Company’s operations, growth, digital strategies and other objectives. Such forward-looking statements include all other statements that are not historical facts, as well as statements that are preceded by, followed by or that include words or phrases such as “believe,” “plan,” “will likely result,” “expect,” “intend,” “will continue,” “is anticipated,” “estimate,” “project,” “may,” “could,” “would,” “should” and similar expressions. These statements are based on current expectations and involve risks and uncertainties which may cause results to differ materially from those set forth in such statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. These forward-looking statements may be affected by various factors including: economic, public health and political conditions that impact consumer confidence and spending, including interest rate fluctuations, periods of heightened inflation and market instability, and armed conflicts; supply chain disruptions; demonstrations, political unrest, potential damage to or closure of the Company’s restaurants and potential reputational damage to the Company or any of its brands; pandemics and related containment measures, including the potential for quarantines or restriction on in-person dining; acceptance and success of The Cheesecake Factory in international markets; acceptance and success of North Italia, Flower Child and Other Fox Restaurant Concepts restaurants; the risks of doing business abroad through Company-owned restaurants and/or licensees; foreign exchange rates, tariffs and cross border taxation; changes in unemployment rates; increases in minimum wages and benefit costs; the economic health of the Company’s landlords and other tenants in retail centers in which its restaurants are located, and the Company’s ability to successfully manage its lease arrangements with landlords; the economic health of suppliers, licensees, vendors and other third parties providing goods or services to the Company; the timing of new unit development and related permitting; compliance with debt covenants; strategic capital allocation decisions including with respect to share repurchases or dividends; the ability to achieve projected financial results; the resolution of uncertain tax positions with the Internal Revenue Service and the impact of tax reform legislation; changes in laws impacting the Company’s business; adverse weather conditions in regions in which the Company’s restaurants are located; factors that are under the control of government agencies, landlords and other third parties; the risks, costs and uncertainties associated with opening new restaurants; and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). Forward-looking statements speak only as of the dates on which they are made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by law. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements and the discussion of risk factors contained in the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as filed with the SEC, which are available at www.sec.gov.

 

 

26901 Malibu Hills Road, Calabasas Hills, CA 91301 • Telephone (818) 871-3000

 

 

 

 

The Cheesecake Factory Incorporated
Condensed Consolidated Financial Statements
(unaudited; in thousands, except per share and statistical data)

 

   13 Weeks Ended   13 Weeks Ended   39 Weeks Ended   39 Weeks Ended 
Consolidated Statements of Income  October 1, 2024   October 3, 2023   October 1, 2024   October 3, 2023 
   Amount   Percent of
Revenues		   Amount   Percent of
Revenues		   Amount   Percent of
Revenues		   Amount   Percent of
Revenues		 
Revenues  $865,471    100.0%  $830,210    100.0%  $2,660,736    100.0%  $2,562,494    100.0%
Costs and expenses:                                        
Food and beverage costs   195,306    22.6%   194,733    23.5%   600,253    22.6%   602,051    23.5%
Labor expenses   310,939    35.9%   301,663    36.3%   949,151    35.7%   919,340    35.9%
Other operating costs and expenses   239,470    27.7%   229,534    27.6%   712,108    26.9%   687,459    26.7%
General and administrative expenses   56,204    6.5%   54,209    6.5%   170,954    6.4%   162,766    6.4%
Depreciation and amortization expenses   25,299    2.9%   22,837    2.8%   75,015    2.8%   69,124    2.7%
Impairment of assets and lease terminations (income)/expense   (3,472)   (0.4)%   48    0.0%   (1,577)   (0.1)%   1,637    0.1%
Acquisition-related contingent consideration, compensation and amortization expenses   1,020    0.1%   1,414    0.2%   3,287    0.1%   3,890    0.2%
Preopening costs   7,005    0.8%   6,742    0.8%   19,860    0.7%   15,800    0.6%
Total costs and expenses   831,771    96.1%   811,180    97.7%   2,529,051    95.1%   2,462,067    96.1%
Income from operations   33,700    3.9%   19,030    2.3%   131,685    4.9%   100,427    3.9%
Interest and other (expense)/income, net   (1,865)   (0.2)%   (2,027)   (0.3)%   (5,974)   (0.2)%   (6,069)   (0.2)%
Income before income taxes   31,835    3.7%   17,003    2.0%   125,711    4.7%   94,358    3.7%
Income tax provision/(benefit)   1,841    0.2%   (942)   (0.2)%   10,082    0.4%   5,688    0.2%
Net income  $29,994    3.5%  $17,945    2.2%  $115,629    4.3%  $88,670    3.5%
                                         
Basic net income per share  $0.63        $0.37        $2.42        $1.83      
Basic weighted average shares outstanding   47,750         48,281         47,734         48,489      
                                         
Diluted net income per share  $0.61        $0.37        $2.37        $1.80      
Diluted weighted average shares outstanding   48,946         48,985         48,751         49,197      

 

 

26901 Malibu Hills Road, Calabasas Hills, CA 91301 • Telephone (818) 871-3000

 

 

 

 

   13 Weeks Ended   13 Weeks Ended   39 Weeks Ended   39 Weeks Ended 
Selected Segment Information  October 1, 2024   October 3, 2023   October 1, 2024   October 3, 2023 
Revenues:                    
The Cheesecake Factory restaurants  $647,754   $628,140   $1,992,245   $1,936,621 
North Italia   71,878    62,417    218,266    191,654 
Other FRC   66,984    58,642    214,850    193,010 
Other   78,855    81,011    235,375    241,209 
Total  $865,471   $830,210   $2,660,736   $2,562,494 
                     
Income/(loss) from operations:                    
The Cheesecake Factory restaurants  $87,822   $67,637   $274,928   $231,700 
North Italia   4,408    4,081    13,085    15,314 
Other FRC   (1,372)   1,036    8,510    15,826 
Other   (57,158)   (53,724)   (164,838)   (162,413)
Total  $33,700   $19,030   $131,685   $100,427 
                     
Depreciation and amortization expenses:                    
The Cheesecake Factory restaurants  $16,142   $15,702   $49,242   $47,955 
North Italia   2,360    1,578    6,653    4,713 
Other FRC   3,031    1,891    8,246    5,627 
Other   3,766    3,666    10,874    10,829 
Total  $25,299   $22,837   $75,015   $69,124 
                     
Impairment of assets and lease termination (income)/expenses:                    
The Cheesecake Factory restaurants  $(3,858)  $29   $(1,732)   160 
North Italia   -    -    -    - 
Other FRC   -    -    -    55 
Other   386    19    155    1,422 
Total  $(3,472)  $48   $(1,577)  $1,637 
                     
Preopening costs:                    
The Cheesecake Factory restaurants  $1,483   $3,861   $5,615   $8,401 
North Italia   1,765    1,068    5,179    2,132 
Other FRC   2,900    1,764    6,810    4,483 
Other   857    49    2,256    784 
Total  $7,005   $6,742   $19,860   $15,800 

 

   13 Weeks Ended   13 Weeks Ended   39 Weeks Ended   39 Weeks Ended 
The Cheesecake Factory restaurants operating information:  October 1, 2024   October 3, 2023   October 1, 2024   October 3, 2023 
Comparable restaurant sales vs. prior year   1.6%   2.4%   0.8%   3.2%
Restaurants opened during period   -    2    1    3 
Restaurants open at period-end   215    213    215    213 
Restaurant operating weeks   2,804    2,756    8,419    8,227 
                     
North Italia operating information:                    
Comparable restaurant sales vs. prior year   2%   8%   2%   8%
Restaurants opened during period   -    -    3    - 
Restaurants open at period-end   39    33    39    33 
Restaurant operating weeks   507    429    1,486    1,287 
                     
Other Fox Restaurant Concepts (FRC) operating information:(1)                    
Restaurants opened during period   3    -    6    3 
Restaurants open at period-end   46    37    46    37 
Restaurant operating weeks   575    481    1,654    1,394 
                     
Other operating information:(2)                    
Restaurants opened during period   1    -    4    1 
Restaurants open at period-end   41    40    41    40 
Restaurant operating weeks   526    520    1,475    1,555 
                     
Number of company-owned restaurants:                    
The Cheesecake Factory   215                
North Italia   39                
Other FRC   46                
Other   41                
Total   341                
                     
Number of international-licensed restaurants:                    
The Cheesecake Factory   34                

 

(1) The Other FRC segment includes all FRC brands except Flower Child.

(2) The Other segment includes the Flower Child, Grand Lux Cafe and Social Monk Asian Kitchen concepts, as well as the Company's third-party bakery, international and consumer packaged goods businesses, unallocated corporate expenses and gift card costs.

 

Selected Consolidated Balance Sheet Information  October 1, 2024   January 2, 2024 
Cash and cash equivalents  $52,215   $56,290 
Long-term debt, net of issuance costs (1)   471,558    470,047 

 

(1) Includes $341.6 million net balance of 0.375% convertible senior notes due 2026 (principal amount of $345 million less $3.4 million in unamortized issuance costs) and $130 million drawn on the Company's revolving credit facility. The unamortized issuance costs were recorded as a contra-liability and netted with long-term debt on the Condensed Consolidated Balance Sheet and are being amortized as interest expense.

 

 

26901 Malibu Hills Road, Calabasas Hills, CA 91301 • Telephone (818) 871-3000

 

 

 

 

Reconciliation of Non-GAAP Results to GAAP Results

 

In addition to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”) in this press release, the Company is providing non-GAAP measurements which present net income and net income per share excluding the impact of certain items. The non-GAAP measurements are intended to supplement the presentation of the Company’s financial results in accordance with GAAP. These non-GAAP measures are calculated by eliminating from net income and diluted net income per share the impact of items the Company does not consider indicative of its ongoing operations. The Company uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons.

 

The Cheesecake Factory Incorporated
Reconciliation of Non-GAAP Financial Measures
(unaudited; in thousands, except per share data)

 

   13 Weeks Ended   13 Weeks Ended   39 Weeks Ended   39 Weeks Ended 
   October 1, 2024   October 3, 2023   October 1, 2024   October 3, 2023 
Net income (GAAP)  $29,994   $17,945   $115,629   $88,670 
Impairment of assets and lease termination (income)/expenses(1)   (3,472)   48    (1,577)   1,637 
Acquisition-related contingent consideration,
compensation and amortization expenses(2)		   1,020    1,414    3,287    3,890 
Tax effect of adjustments(3)   638    (380)   (445)   (1,437)
Adjusted net income (non-GAAP)  $28,180   $19,027   $116,894   $92,760 
                     
Diluted net income per share (GAAP)  $0.61   $0.37   $2.37   $1.80 
Impairment of assets and lease termination (income)/expenses   (0.07)   0.00    (0.03)   0.03 
Acquisition-related contingent consideration,
compensation and amortization expenses		   0.02    0.03    0.07    0.08 
Tax effect of adjustments   0.01    (0.01)   (0.01)   (0.03)
Adjusted net income per share (non-GAAP)(4)  $0.58   $0.39   $2.40   $1.89 

 

(1) A detailed breakdown of impairment of assets and lease termination (income)/expenses recorded in the thirteen and thirty-nine weeks ended October 1, 2024 and October 3, 2023 can be found in the Selected Segment Information table.

(2) Represents changes in the fair value of the deferred consideration and contingent consideration and compensation liabilities related to the North Italia and FRC acquisition, as well as amortization of acquired definite-lived licensing agreements.

(3) Based on the federal statutory rate and an estimated blended state tax rate, the tax effect on all adjustments assumes a 26% tax rate for the fiscal 2024 and 2023 periods.

(4) Adjusted net income per share may not add due to rounding.