Calabas Hills / CA. (cf) The Cheesecake Factory Incorporated reported financial results for the second quarter of fiscal 2020, which ended on June 30, 2020. Total revenues were USD 295.9 million in the second quarter of fiscal 2020 compared to USD 602.6 million in the second quarter of fiscal 2019. Net loss and diluted net loss per share were USD 56.5 million and USD 1.61, respectively, in the second quarter of fiscal 2020 reflecting the impact of Covid-19. The results in this statement include the acquisition of North Italia and the remaining business of Fox Restaurant Concepts LLC («FRC») on October 2, 2019.
The Company recorded pre-tax Covid-19 related charges of USD 11.7 million, including healthcare benefits and other expenses associated with the Company’s furloughed staff members. Excluding the after-tax impact of this and certain other items, and reflecting the potential impact of the conversion of the Company’s convertible preferred stock into common stock, adjusted net loss and adjusted if-converted net loss per share for the second quarter of fiscal 2020 were USD 46.0 million and USD 0.87, respectively.
Comparable restaurant sales at The Cheesecake Factory restaurants decreased 56.9 percent in the second quarter of fiscal 2020, reflecting the impact of Covid-19.
The Company began to reopen dining rooms across its concepts the second week of May. As of today, approximately 71 percent of the Company’s restaurants across its concepts, including 146 Cheesecake Factory locations, are operating with reopened indoor dining rooms with limited capacity in accordance with local mandates. Approximately 16 percent of the Company’s restaurants across its concepts, including 36 Cheesecake Factory locations, are operating with reopened patios with social distancing in accordance with California, Florida and New Mexico dining restrictions. Currently, 22 Cheesecake Factory locations are operating an off-premise only model and 16 locations across the Company’s concepts, including one Cheesecake Factory restaurant, are currently closed.
The Cheesecake Factory restaurants with reopened indoor dining rooms have recaptured, on average quarter-to-date, nearly 80 percent of prior year sales levels, reflecting continued strength in off-premise sales. For The Cheesecake Factory restaurants that are continuing to operate an off-premise only model at present, current weekly off-premise sales would equate to approximately USD 4.2 million per unit on an annualized basis, on average. In aggregate, across restaurant operating models, fiscal third quarter to-date through July 26, 2020 comparable sales at The Cheesecake Factory restaurants are down approximately 32 percent.
«Our operators have done an extraordinary job navigating the myriad of evolving regulations to provide our guests delicious, memorable experiences whether in our restaurants or the comfort of their own homes,» said David Overton, Chairman and Chief Executive Officer. «With the reopening of many of our dining rooms, we have also importantly been able to bring a number of our staff members back to work. We have taken a deliberate approach in our reopening strategy as the health and safety of our team and guests remain our top priority.»
Overton continued, «We have seen very strong pent-up demand when Cheesecake Factory locations reopen on-premise dining. Our large restaurant footprints and flexible seating layouts are enabling us to capture meaningful sales levels despite capacity restrictions. At the same time, we continue to see strength in the off-premise channel at both reopened restaurants and those continuing to operate an off-premise only model. We have managed the business well in this dynamic environment, with strength across our restaurant-level key performance indicators, including food efficiency, labor productivity and controllable profit. This enabled us to exit the second quarter in a solid financial position, with a strong cash balance. Looking ahead, we believe we will continue to be able to effectively manage through and ultimately emerge from this crisis in a strong position as we have proven in prior cycles.»
No new restaurants were opened by the Company or its international licensee partners during the second quarter of fiscal 2020. The Company currently has eight locations under development across its concepts and is monitoring operating conditions in their respective markets to determine when to move forward with these new unit openings.
As of June 30, 2020, cash and cash equivalents totaled USD 250.2 million and total debt was USD 376 million. The Company has paid a substantial majority of its rent payments through July after giving effect to various abatement and deferral structures in place for certain lease agreements. During the second quarter of fiscal 2020, the Company issued 3,694 shares of Preferred Stock to satisfy a payment-in-kind dividend of USD 18.47 per share.