Cheesecake Factory: Reports Results for Q2/2012

Calabas Hills / CA. (cf) The Cheesecake Factory reported financial results for the second quarter of fiscal 2012, which ended on July 03, 2012. Total revenues were 454,7 million USD in the second quarter of fiscal 2012 as compared to 430,7 million USD in the prior year second quarter. Net income and diluted net income per share were 28,4 million USD and 0,52 USD, respectively.

In the second quarter of fiscal 2012, the Company realized 0,4 million USD in proceeds from a variable life insurance contract, which the Company uses to support its non-qualified deferred compensation plan. This item is non-taxable and increased reported diluted net income per share by approximately 0,01 USD. Excluding this item, net income and diluted net income per share were 28,0 million USD and 0,51 USD, respectively.

Operating Results

Comparable restaurant sales at The Cheesecake Factory and Grand Lux Cafe increased 1,7 percent in the second quarter of fiscal 2012. By concept, comparable restaurant sales grew 2,1 percent at The Cheesecake Factory and declined 2,9 percent at Grand Lux Cafe.

«We continue to take market share and maintain our outperformance relative to the industry with respect to comparable restaurant sales, particularly growth in guest traffic. We have long said that our focus on menu innovation and quality, as well as high levels of hospitality, set us apart from others in casual dining and represent our biggest sales drivers. Once again, we demonstrated that we are focused on the right areas to drive sales and we continue to hold a leadership position in these areas», said David Overton, Chairman and CEO.

«Our financial performance was strong across our key metrics, including significantly higher restaurant-level margins, compared to last year. As a result, we delivered earnings per share growth of over 20 percent in the second quarter, solidly above our targeted range», continued Overton.

Capital Allocation

The Company also announced today that its Board of Directors approved the initiation of a cash dividend to its shareholders. A quarterly dividend of 0,12 USD per share will be paid on August 21, 2012 to shareholders of record at the close of business on August 8, 2012. On an annualized basis, the Company´s dividend payment equates to a payout of approximately 25 percent of its full-year net income. Future dividends will be subject to Board approval.

«We are confident in the strength of our business, operationally and financially. As a result, we are taking a very positive step in our commitment to increase shareholder value by paying a dividend, with the objective of increasing it over time», continued Overton.

The Company repurchased 543’502 shares of its common stock at a cost of approximately 16,7 million USD during the second quarter of fiscal 2012. Year-to-date, the Company repurchased 1’899’649 shares of its common stock at a total cost of approximately 57,5 million USD.

The Company continues to expect that it will return approximately 100 million USD in free cash flow to shareholders in fiscal 2012 through share repurchases. Dividend payments will represent an incremental return of capital to shareholders in fiscal 2012.

«Our business is healthy, stable and predictable. We generate a substantial amount of cash, which allows us to continue investing in the profitable growth of our concepts while simultaneously returning a meaningful amount of cash to our shareholders», concluded Overton.

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