The Cheesecake Factory Incorporated (NASDAQ: CAKE) today
reported financial results for the fourth quarter of fiscal 2024,
which ended on December 31, 2024.
Total revenues were $921.0 million in the fourth quarter of
fiscal 2024 compared to $877.0 million in the fourth quarter of
fiscal 2023. Net income and diluted net income per share were $41.2
million and $0.83, respectively, in the fourth quarter of fiscal
2024.
The Company recorded pre-tax net expense of $14.4 million
related to impairment of assets and lease termination expense
partially offset by Fox Restaurant Concepts (“FRC”)
acquisition-related income. Excluding the after-tax impact of these
items, adjusted net income and adjusted diluted net income per
share for the fourth quarter of fiscal 2024 were $51.8 million and
$1.04, 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 1.7% year-over-year in the fourth quarter of
fiscal 2024.
“Our fourth quarter performance capped off an excellent year,
with solid revenue and earnings contributing to record annual
revenue and substantially improved profitability for 2024,” said
David Overton, Chairman and Chief Executive Officer. “While our
fourth quarter results were led by the strength of The Cheesecake
Factory restaurants, we delivered impressive performance across our
portfolio of concepts. Consumer demand for the distinct,
high-quality dining experiences we provide our guests across our
experiential concepts reinforces our confidence in the long-term
growth potential of our portfolio.”
“We continued to capture market share, as demonstrated by the
ongoing outperformance in comparable sales and traffic at The
Cheesecake Factory restaurants versus the broader casual dining
industry. During the fourth quarter, we opened nine new restaurants
to strong consumer demand, for a total of 23 new openings for the
year, surpassing our development expectations.”
“Our fourth quarter and full-year results marked the achievement
of our key financial and operational objectives, including
comparable sales growth, margin expansion and accelerating
accretive unit growth. With these accomplishments as a foundation,
we are confident in our ability to continue delivering on our goals
for 2025 and beyond. We remain focused on leveraging our scale,
operational strengths and the appeal of our differentiated concepts
to drive long-term value to our shareholders in the years to
come.”
Development
During the fourth quarter of fiscal 2024, the Company opened
nine new restaurants, including three North Italia locations, two
Flower Child locations, two FRC restaurants and the relocation of
two Cheesecake Factory restaurants. Subsequent to quarter-end, the
Company opened five new restaurants, including one North Italia
location, two Flower Child locations and two FRC restaurants.
The Company now expects to open as many as 25 new restaurants in
fiscal 2025, including as many as three to four The Cheesecake
Factory restaurants, six to seven North Italia locations, six to
seven Flower Child locations, and as many as eight to nine FRC
restaurants.
Liquidity and Capital Allocation
As of December 31, 2024, the Company had total available
liquidity of $340.7 million, including a cash balance of $84.2
million and availability on its revolving credit facility of $256.5
million. Total principal amount of debt outstanding was $455
million, including $345 million in principal amount of 0.375%
convertible senior notes due June 2026 and $110 million in
principal amount drawn on the Company’s revolving credit
facility.
The Company repurchased approximately 11,800 shares of its stock
at a cost of $0.5 million in the fourth 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 March 18, 2025, to
shareholders of record at the close of business on March 5,
2025.
Conference Call and Webcast
The Company will hold a conference call to review its results
for the fourth 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.
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 352 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.
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.
The Cheesecake Factory Incorporated Condensed
Consolidated Statements of Income (unaudited; in thousands,
except per share data) Consolidated Statements of
Income
13 Weeks Ended December 31,
2024
13 Weeks Ended January 2,
2024
52 Weeks Ended December 31,
2024
52 Weeks Ended January 2,
2024
Amount
Percent of Revenues
Amount
Percent of Revenues
Amount
Percent of Revenues
Amount
Percent of Revenues
Revenues
$
920,963
100.0
%
$
877,009
100.0
%
$
3,581,699
100.0
%
$
3,439,503
100.0
%
Costs and expenses: Food and beverage costs
205,768
22.3
%
201,449
23.0
%
806,021
22.5
%
803,500
23.4
%
Labor expenses
315,231
34.2
%
308,555
35.2
%
1,264,382
35.3
%
1,227,895
35.7
%
Other operating costs and expenses
247,113
26.8
%
234,969
26.8
%
959,221
26.7
%
922,428
26.8
%
General and administrative expenses
57,783
6.3
%
54,683
6.2
%
228,737
6.4
%
217,449
6.3
%
Depreciation and amortization expenses
26,435
2.9
%
24,012
2.7
%
101,450
2.8
%
93,136
2.7
%
Impairment of assets and lease terminations expense
15,224
1.7
%
27,827
3.2
%
13,647
0.4
%
29,464
0.9
%
Acquisition-related contingent consideration, compensation and
amortization (income)/expenses
(858
)
(0.1
)%
7,796
0.9
%
2,429
0.1
%
11,686
0.3
%
Preopening costs
7,635
0.8
%
9,579
1.1
%
27,495
0.8
%
25,379
0.7
%
Total costs and expenses
874,331
94.9
%
868,870
99.1
%
3,403,382
95.0
%
3,330,937
96.8
%
Income from operations
46,632
5.1
%
8,139
0.9
%
178,317
5.0
%
108,566
3.2
%
Interest expense, net
(2,137
)
(0.2
)%
(2,937
)
(0.3
)%
(10,107
)
(0.3
)%
(10,160
)
(0.3
)%
Other income, net
841
0.0
%
454
0.0
%
2,837
0.1
%
1,608
0.0
%
Income before income taxes
45,336
4.9
%
5,656
0.6
%
171,047
4.8
%
100,014
2.9
%
Income tax provision/(benefit)
4,182
0.4
%
(7,025
)
(0.8
)%
14,264
0.4
%
(1,337
)
0.0
%
Net income
$
41,154
4.5
%
$
12,681
1.4
%
$
156,783
4.4
%
$
101,351
2.9
%
Basic net income per share
$
0.86
$
0.27
$
3.28
$
2.10
Basic weighted average shares outstanding
47,953
47,828
47,789
48,324
Diluted net income per share
$
0.83
$
0.26
$
3.20
$
2.07
Diluted weighted average shares outstanding
49,645
48,609
48,974
49,050
The Cheesecake Factory Incorporated Selected
Segment Information (unaudited; in thousands)
For the 13 Weeks Ended December 31, 2024 The
Cheesecake Factory North Other
restaurants Italia FRC Other
Total Revenues
$
669,382
$
81,309
$
85,119
$
85,153
$
920,963
Costs and expenses: Food and beverage costs
149,130
18,371
18,346
19,921
205,768
Labor expenses
221,494
29,559
29,941
34,237
315,231
Other operating costs and expenses
175,382
21,598
25,090
25,043
247,113
General and administrative expenses
-
-
-
57,783
57,783
Depreciation and amortization expenses
16,768
2,591
3,143
3,933
26,435
Impairment of assets and lease terminations expense
330
-
14,893
1
15,224
Acquisition-related contingent consideration, compensation and
amortization (income)/expenses
-
-
315
(1,173
)
(858
)
Preopening costs
1,884
2,230
2,396
1,125
7,635
Total costs and expenses
564,988
74,349
94,124
140,870
874,331
Income/(loss) from operations
$
104,394
$
6,960
$
(9,005
)
$
(55,717
)
$
46,632
For the 13 Weeks Ended January 2, 2024 The
Cheesecake Factory North Other
restaurants Italia FRC Other
Total Revenues
$
658,445
$
67,224
$
70,913
$
80,427
$
877,009
Costs and expenses: Food and beverage costs
152,401
16,206
15,769
17,073
201,449
Labor expenses
225,951
23,897
25,083
33,624
308,555
Other operating costs and expenses
173,781
18,285
19,335
23,568
234,969
General and administrative expenses
-
-
-
54,683
54,683
Depreciation and amortization expenses
16,251
1,694
2,289
3,778
24,012
Impairment of assets and lease terminations expense
20,241
1,015
2,527
4,044
27,827
Acquisition-related contingent consideration, compensation and
amortization expenses
-
-
316
7,480
7,796
Preopening costs
4,457
2,926
1,998
198
9,579
Total costs and expenses
593,082
64,023
67,317
144,448
868,870
Income/(loss) from operations
$
65,363
$
3,201
$
3,596
$
(64,021
)
$
8,139
For the 52 Weeks Ended December 31, 2024
The Cheesecake Factory North Other
restaurants Italia FRC Other
Total Revenues
$
2,661,627
$
299,575
$
299,969
$
320,528
$
3,581,699
Costs and expenses: Food and beverage costs
599,899
69,505
66,665
69,952
806,021
Labor expenses
913,560
111,082
108,377
131,363
1,264,382
Other operating costs and expenses
696,739
82,290
88,672
91,520
959,221
General and administrative expenses
-
-
-
228,737
228,737
Depreciation and amortization expenses
66,010
9,244
11,389
14,807
101,450
Impairment of assets and lease termination (income)/expenses
(1,402
)
-
14,893
156
13,647
Acquisition-related contingent consideration, compensation and
amortization expenses
-
-
1,262
1,167
2,429
Preopening costs
7,499
7,409
9,206
3,381
27,495
Total costs and expenses
2,282,305
279,530
300,464
541,083
3,403,382
Income/(loss) from operations
$
379,322
$
20,045
$
(495
)
$
(220,555
)
$
178,317
For the 52 Weeks Ended January 2, 2024 The
Cheesecake Factory North Other
restaurants Italia FRC Other
Total Revenues
$
2,595,066
$
258,878
$
263,923
$
321,636
$
3,439,503
Costs and expenses: Food and beverage costs
607,439
64,425
59,865
71,771
803,500
Labor expenses
907,579
93,540
93,840
132,936
1,227,895
Other operating costs and expenses
685,521
69,918
72,554
94,435
922,428
General and administrative expenses
-
-
-
217,449
217,449
Depreciation and amortization expenses
64,206
6,407
7,916
14,607
93,136
Impairment of assets and lease terminations expense
20,401
1,015
2,582
5,466
29,464
Acquisition-related contingent consideration, compensation and
amortization expenses
-
-
1,262
10,424
11,686
Preopening costs
12,857
5,058
6,482
982
25,379
Total costs and expenses
2,298,003
240,363
244,501
548,070
3,330,937
Income/(loss) from operations
$
297,063
$
18,515
$
19,422
$
(226,434
)
$
108,566
The Cheesecake Factory Incorporated Selected
Operating, Restaurant and Balance Sheet Information
(unaudited; in thousands, except statistical data)
The Cheesecake Factory restaurants operating
information: 13 Weeks EndedDecember 31, 2024
13 Weeks EndedJanuary 2, 2024 52 Weeks EndedDecember 31,
2024 52 Weeks EndedJanuary 2, 2024 Comparable restaurant
sales vs. prior year
1.7
%
2.5
%
1.0
%
3.0
%
Restaurants opened during period
2
3
3
6
Restaurants open at period-end
215
216
215
216
Restaurant operating weeks
2,795
2,783
11,214
11,010
North Italia operating information: Comparable
restaurant sales vs. prior year
1
%
7
%
2
%
8
%
Restaurants opened during period
3
3
6
3
Restaurants open at period-end
42
36
42
36
Restaurant operating weeks
535
442
2,021
1,729
Other Fox Restaurant Concepts (FRC) operating
information:(1) Restaurants opened during period
2
3
8
6
Restaurants open at period-end
48
40
48
40
Restaurant operating weeks
611
512
2,264
1,906
Other operating information:(2) Restaurants opened
during period
2
-
6
1
Restaurants open at period-end
43
39
43
39
Restaurant operating weeks
551
519
2,114
2,074
Number of company-owned restaurants: The
Cheesecake Factory
215
North Italia
42
Other FRC
48
Other
43
Total
348
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 December 31, 2024 January 2,
2024 Cash and cash equivalents
$
84,176
$
56,290
Long-term debt, net of issuance costs (1)
452,062
470,047
(1) Includes $342.1 million net balance of 0.375%
convertible senior notes due 2026 (principal amount of $345 million
less $2.9 million in unamortized issuance costs) and $110 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.
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 52 Weeks Ended 52 Weeks Ended December
31, 2024 January 2, 2024 December 31, 2024
January 2, 2024 Net income (GAAP)
$
41,154
$
12,681
$
156,783
$
101,351
Impairment of assets and lease termination expenses(1)
15,224
27,827
13,647
29,464
Acquisition-related contingent consideration, compensation and
amortization (income)/expenses(2)
(858
)
7,796
2,429
11,686
Tax effect of adjustments(3)
(3,735
)
(9,262
)
(4,180
)
(10,699
)
Adjusted net income (non-GAAP)
$
51,785
$
39,042
$
168,679
$
131,802
Diluted net income/(loss) per share (GAAP)
$
0.83
$
0.26
$
3.20
$
2.07
Impairment of assets and lease termination expenses(1)
0.31
0.57
0.28
0.61
Acquisition-related contingent consideration, compensation and
amortization (income)/expenses(2)
(0.02
)
0.16
0.05
0.24
Tax effect of adjustments(3)
(0.08
)
(0.19
)
(0.09
)
(0.22
)
Adjusted diluted net income per share (non-GAAP)(4)
$
1.04
$
0.80
$
3.44
$
2.69
(1) A detailed breakdown of impairment of assets and lease
termination expenses recorded in the thirteen and fifty-two weeks
ended December 31, 2024 and January 2, 2024 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250219585576/en/
Etienne Marcus (818) 871-3000
investorrelations@thecheesecakefactory.com
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