Cheesecake Factory: Reports Q3-2023 Financial Results

Calabas Hills / CA. (cf) The Cheesecake Factory Incorporated announced financial results for the third quarter of fiscal 2023, which ended on October 03, 2023. Total revenues were USD 830.2 million in the third quarter of fiscal 2023 compared to USD 784.0 million in the third quarter of fiscal 2022. Net income and diluted net income per share were USD 17.9 million and USD 0.37, respectively, in Q3-2023.

The Company recorded a pre-tax net expense of USD 1.5 million primarily related to Fox Restaurant Concepts (FRC) acquisition-related expenses. Excluding the after-tax impact of this item, adjusted net income and adjusted net income per share for the third quarter of fiscal 2023 were USD 19.0 million and USD 0.39, respectively.

Comparable restaurant sales at The Cheesecake Factory restaurants increased 2.4 percent year-over-year in the third quarter of fiscal 2023 and increased 12.6 percent relative to the third quarter of fiscal 2019, on an operating week basis.

«Our third quarter results reflect positive sales trends, as we continued to outperform the broader casual dining industry led by solid comparable sales growth at The Cheesecake Factory restaurants,» said David Overton, Chairman and Chief Executive Officer. «Our performance amidst the softening sales environment is a testament to the resilient consumer demand for the distinct, high-quality dining experiences we provide our guests. Our tenured operators continued to do an excellent job effectively managing their restaurants and consistently delivering exceptional food quality, service and hospitality to drive sales.»

«During the quarter we opened two Cheesecake Factory restaurants to strong demand, further underscoring the enduring appeal and brand affinity for our flagship concept. We remain sharply focused on accelerating our unit growth to achieve our long-term development objectives, even though we continue to experience delays beyond our control. As the macroeconomic environment has gradually stabilized and input costs have continued to improve this year, the stability of our operational and financial performance reinforces our belief we are well positioned to drive meaningful growth, shareholder value and market share gains going forward.»

Development during the quarter

During the third quarter of fiscal 2023, the Company opened two Cheesecake Factory restaurants, one in Birkdale, NC and the other in Estero, FL. While the Company continues to make progress against its pipeline, opening timelines continued to be pressured by substantial permitting delays, as such the Company is strategically shifting some restaurant openings into the first quarter of fiscal 2024. As a result, the Company now expects to open as many as 16 new restaurants in fiscal 2023 and as many as four to six new restaurants in the first quarter of fiscal 2024. The fiscal 2023 new restaurant openings include as many as five Cheesecake Factory restaurants, four North Italia restaurants, and as many as seven FRC restaurants, including one Flower Child location.

Additionally, the Company expects two Cheesecake Factory restaurants to open internationally under licensing agreements in fiscal 2023.

Liquidity and Capital Allocation

As of October 3, 2023, the Company had total available liquidity of USD 300.5 million, including a cash balance of USD 64.0 million and availability on its revolving credit facility of USD 236.5 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 453,400 shares of its stock at a cost of USD 14.6 million in the third 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 November 28, 2023 to shareholders of record at the close of business on November 15, 2023.