Cheesecake Factory: Reports Q1-2021 Financial Results

Calabas Hills / CA. (cf) The Cheesecake Factory Incorporated reported financial results for the first quarter of fiscal 2021, which ended on March 30, 2021. Total revenues were USD 627.4 million in the first quarter of fiscal 2021 compared to USD 615.1 million in the first quarter of fiscal 2020. Net loss available to common stockholders and diluted net loss per common share were USD 1.2 million and USD 0.03, respectively, in the first quarter of fiscal 2021.

During the first quarter of fiscal 2021, the Company recorded Covid-19 related charges of USD 4.9 million, for costs such as sick and vaccination pay, healthcare and meal benefits for furloughed staff members, additional sanitation and personal protective equipment. Excluding the after-tax impact of these and certain other items, and reflecting the potential impact of the conversion of the Company’s convertible preferred stock into common stock, adjusted net income and adjusted net income per share for the first quarter of fiscal 2021 were USD 10.8 million and USD 0.20, 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 2.8 percent year-over-year in the first quarter of fiscal 2021. Relative to the first quarter of fiscal 2019, comparable restaurant sales at The Cheesecake Factory restaurants declined 10.4 percent.

Fiscal 2021 second quarter-to-date through April 27th comparable sales for The Cheesecake Factory restaurants increased approximately 220 percent year-over-year and 7 percent relative to the same period in fiscal 2019, supported by approximately one-third off-premise sales mix and reflecting eased Covid-19 restrictions, as well as strong consumer spending trends.

As of today, nearly all of the Company’s restaurants across its concepts, including 206 Cheesecake Factory locations, are operating with reopened indoor dining rooms with limited capacity in accordance with local mandates and social distancing protocols. On average, Cheesecake Factory restaurants with reopened dining rooms are operating at approximately 60 percent indoor capacity. One Cheesecake Factory location is operating an off-premise only model and two locations across the Company’s concepts are currently closed with plans to reopen by the end of the second quarter.

«We saw a significant increase in sales at The Cheesecake Factory restaurants and across our portfolio in March as Covid-19 dining restrictions eased and consumer spending generally increased,» said David Overton, Chairman and Chief Executive Officer. «In addition to these positive macro trends, we believe our performance also demonstrates the power of The Cheesecake Factory brand as we saw meaningful pent-up demand to dine at our restaurants, while we also continued to drive strong off-premise sales volumes. Our operators did a tremendous job managing the sales levels – delivering delicious, memorable experiences for our guests and also exceeding our expectations across our key performance indicators, including operating margins.»

Overton continued, «We are honored to be recognized as one of the ‘100 Best Companies to Work For®’ by FORTUNE magazine for the eighth consecutive year, continuing to underscore our position as an employer of choice. This accolade is even more meaningful in the context of the challenges we faced during 2020 and the unique labor environment the restaurant industry is currently experiencing. We believe we have one of the best teams in the industry, which we expect to continue to differentiate us in the Covid-19 operating environment and as we emerge from the pandemic.»

Development

During the first quarter of fiscal 2021, The Cheesecake Factory opened in Washington, D.C., North Italia opened in Birmingham, Alabama and Blanco opened in Nashville. Subsequent to quarter-end, North Italia opened in Miami and one Cheesecake Factory restaurant opened internationally in Shanghai under a licensing agreement.

Balance Sheet + Cash Flow

During the first quarter, the Company generated USD 21.6 million in cash flow from operating activities. As of March 30, 2021, the Company had total available liquidity of approximately USD 278 million, including a cash balance of approximately USD 181.3 million and availability on its revolving credit facility of USD 96.6 million. Total debt outstanding was USD 280.0 million. As previously announced, a USD 5.1 million cash dividend for the first quarter of fiscal 2021 was paid on March 31, 2021 to holders of the Company’s convertible preferred stock.