Cheesecake Factory: Reports Q2-2024 Financial Results

Calabas Hills / CA. (cf) The Cheesecake Factory Incorporated reported financial results for the second quarter of fiscal 2024, which ended on July 02, 2024. Total revenues were USD 904.0 million in the second quarter of fiscal 2024 compared to USD 866.2 million in the second quarter of fiscal 2023. Net income and diluted net income per share were USD 52.4 million and USD 1.08, respectively, in Q2 of fiscal 2024.

The Company recorded a pre-tax net expense of USD 1.0 million related to Fox Restaurant Concepts (FRC) acquisition-related expenses and impairment of assets and lease termination income. Excluding the after-tax impact of these items, adjusted net income and adjusted net income per share for the second quarter of fiscal 2024 were USD 53.2 million and USD 1.09, respectively.

Comparable restaurant sales at The Cheesecake Factory restaurants increased 1.4 percent year-over-year in the second quarter of fiscal 2024.

«Building on our first quarter momentum, we delivered solid top- and bottom-line results in the second quarter contributing to a strong performance in the first half of the year,» said David Overton, Chairman and Chief Executive Officer. «Our second quarter revenue finished towards the higher end of our expectations, and we generated robust earnings growth with profit margins exceeding the high end of our expectations. Our second quarter results were led by the strength of The Cheesecake Factory restaurants. The resilient consumer demand for the distinct, high-quality dining experiences we provide our guests and brand affinity for our namesake concept has been pivotal in supporting our continued outperformance of the broader casual dining industry. Our operators drove solid operational execution within our restaurants to deliver year-over-year improvements in labor productivity and hourly staff and manager retention.»

«We opened five new restaurants across various concepts and markets during the second quarter. The strong demand and sales performance at our new restaurant openings underscores the broad appeal of our experiential concepts. With 11 restaurants opened as of today, we are well-positioned to meet our development objective to open as many as 22 new restaurants in 2024. Most importantly, following three consecutive quarters of stable topline revenue, strong operational execution and significant profitability growth, we generated the consistent results that The Cheesecake Factory has long been known for.»

Development during the second quarter

During the second quarter of fiscal 2024, the Company opened five new restaurants, including one Cheesecake Factory, one North Italia restaurant, two Flower Child locations and one Culinary Dropout. In addition, one Cheesecake Factory restaurant opened internationally under a licensing agreement in China. Subsequent to quarter-end, the Company opened 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 to seven North Italia restaurants, six to seven Flower Child locations, and seven to eight other Fox Restaurant Concept locations.

Liquidity and Capital Allocation

As of July 02, 2024, the Company had total available liquidity of USD 277.2 million, including a cash balance of USD 40.7 million and availability on its revolving credit facility of USD 236.5 million. Total principal amount of debt outstanding was USD 475.0 million, including USD 345.0 million in principal amount of 0.375 percent convertible senior notes due 2026 and USD 130.0 million in principal amount drawn on the Company’s revolving credit facility.

The Company repurchased approximately 111,400 shares of its stock at a cost of USD 3.9 million in the second quarter of fiscal 2024. In addition, the Company’s Board of Directors has declared a quarterly dividend of USD 0.27 per share to be paid on August 27, 2024 to shareholders of record at the close of business on August 14, 2024.