Cheesecake Factory: Reports Q3-2022 Financial Results

Calabas Hills / CA. (cf) The Cheesecake Factory Incorporated reported financial results for the third quarter of fiscal 2022, which ended on September 27, 2022.

Total revenues were USD 784.0 million in the third quarter of fiscal 2022 compared to USD 754.5 million in the third quarter of fiscal 2021. Net loss and diluted net loss per share were USD 2.4 million and USD 0.05, respectively, in the third quarter of fiscal 2022.

Excluding the after-tax impact of a USD 0.8 million charge recorded by the Company primarily associated with FRC acquisition-related items, adjusted net loss and adjusted net loss per share for the third quarter of fiscal 2022 were USD 1.6 million and USD 0.03, 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 1.1 percent year-over-year in the third quarter of fiscal 2022. Relative to fiscal 2019, third quarter comparable restaurant sales at The Cheesecake Factory restaurants increased 9.5 percent. Through October 25th, fourth quarter-to-date comparable sales for The Cheesecake Factory restaurants increased approximately 2.8 percent year-over-year and 14.0 percent as compared to the same period in fiscal 2019.

«Our revenue results for the third quarter were within our expected range, and sales trends across our portfolio of concepts remained solid, strengthening throughout the quarter and into the fourth quarter,» said David Overton, Chairman and CEO. «Our operators remain focused on delivering delicious and memorable guest experiences and effectively managing what is in their control. In fact, labor productivity and food efficiency results for the quarter exceeded our expectations and pre-pandemic levels.»

«While our operational performance has been solid and core cost inputs have become more stable and predictable, we continue to face a dynamic and challenging inflationary environment in some areas. As a result, our profit margins in the quarter reflected higher than anticipated operating expenses particularly in utilities and building maintenance. However, we remain highly focused on returning restaurant margins to pre-pandemic levels in the near-term supported by appropriate pricing actions to offset the higher costs while also managing the business for the long-term including increasing market share.»

Development

During the third quarter of fiscal 2022, we opened The Cheesecake Factory in Katy, TX, a suburb of Houston, a North Italia in Dunwoody, GA, a suburb of Atlanta, and a Fly Bye in Phoenix, AZ.

The Company now expects to open as many as 13 new restaurants in fiscal 2022, including as many as three Cheesecake Factory restaurants, four North Italia restaurants, and as many as six FRC restaurants, including three Flower Child locations. This includes the opening of The Cheesecake Factory Opry Mills in Nashville, TN, a North Italia in The Woodlands, TX, a suburb of Houston, and a Flower Child in Austin, TX subsequent to third quarter-end.

In addition, in fiscal 2022 the Company expects one Cheesecake Factory restaurant to open internationally under a licensing agreement.

Liquidity and Capital Allocation

As of September 27, 2022, the Company had total available liquidity of USD 372 million, including a cash balance of USD 133 million and availability on its revolving credit facility of USD 239 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 889,000 shares of its common stock at a cost of USD 26.7 million in the third quarter of fiscal 2022, and also announced today that its Board of Directors declared a quarterly dividend of USD 0.27 per share to be paid on November 28, 2022 to shareholders of record at the close of business on November 15, 2022. As of September 27, 2022, 1.5 million shares remained available under the Company’s authorized share repurchase program. Subsequent to quarter-end, the Company’s Board of Directors authorized an increase of 5.0 million shares to the existing repurchase program raising the total authorization to 61.0 million shares.

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