Calabas Hills / CA. (cf) The Cheesecake Factory Incorporated reported financial results for the second quarter of fiscal 2023, which ended on July 04, 2023. Total revenues were USD 866.2 million in the second quarter of fiscal 2023 compared to USD 832.6 million in the second quarter of fiscal 2022. Net income and diluted net income per share were USD 42.7 million and USD 0.87, respectively, in Q2-2023.
The Company recorded a pre-tax net expense of USD 0.6 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 2023 were USD 43.1 million and USD 0.88, 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 1.5 percent year-over-year in the second quarter of fiscal 2023 and increased 14.1 percent relative to the second quarter of fiscal 2019, on an operating week basis.
«I am pleased to report our second quarter results marked the third consecutive quarter of sequential profit margin expansion, finishing above our expectations, reflecting continued progress against our stated goal of recapturing our margins,» said David Overton, Chairman and Chief Executive Officer. «We delivered another quarter of comparable sales growth across our portfolio of concepts, with comparable sales at The Cheesecake Factory restaurants continuing to outpace the industry relative to 2019. Our experienced 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 three new restaurants during the second quarter, including two in the Miami area which opened to impressive demand, underscoring the strength of the consumer demand for our concepts and the unique dining experiences we provide for our guests. We remain intently focused on accelerating our unit growth and achieving our long-term unit growth objectives, despite ongoing construction and permitting challenges.»
During the second quarter of fiscal 2023, the Company opened a Cheesecake Factory and a Henry in the Miami area and a Doughbird in Tucson, AZ. While all of the sites in the Company’s pipeline remain active, the Company continues to experience some delays in opening dates due to construction challenges and permit approval delays. As a result, the Company now expects to open as many as 20 new restaurants in fiscal 2023, including as many as six Cheesecake Factory restaurants, five North Italia restaurants, and as many as nine FRC restaurants, including three Flower Child locations. In addition, in fiscal 2023 the Company expects two to three Cheesecake Factory restaurants to open internationally under licensing agreements.
Liquidity and Capital Allocation
As of July 4, 2023, the Company had total available liquidity of USD 330.1 million, including a cash balance of USD 91.6 million and availability on its revolving credit facility of USD 238.5 million. Total principal amount of debt outstanding was USD 475 million, including USD 345 million in principal amount of 0.375 percent convertible senior notes due 2026 and USD 130 million in principal amount drawn on the Company’s revolving credit facility.
The Company repurchased approximately 280,400 shares of its stock at a cost of USD 9.3 million in the second quarter of fiscal 2023. In addition, the Company’s Board of Directors has declared a quarterly dividend of USD 0.27 per share to be paid on August 29, 2023 to shareholders of record at the close of business on August 16, 2023.