The Cheesecake Factory: Reports Results for Q4/2011

Calabas Hills / CA. (cf) The Cheesecake Factory reported financial results for the fourth quarter of fiscal 2011, which ended on January 03, 2012. Total revenues were 477,7 million USD in the fourth quarter of fiscal 2011 as compared to 416,7 million USD in the prior year fourth quarter (14 weeks versus 13 weeks). The additional week in the fourth quarter of fiscal 2011 contributed approximately 43 million USD of sales. Net income and diluted net income per share were 29,9 million USD and 0,54 USD, respectively.

In compliance with accounting rules, the Company recorded a pre-tax, non-cash charge of 1,5 million USD related to the impairment of three restaurants during the fourth quarter of fiscal 2011. In addition, the Company recorded a pre-tax benefit of 0,7 million USD and a reduction to its income tax provision of 1,1 million USD, both related to a partial settlement with the Internal Revenue Service. On a combined basis, the items above increased diluted net income per share by approximately 0,01 USD. Excluding these items, net income was 29,4 million USD and diluted net income per share was 0,53 USD.

Operating Results

Comparable restaurant sales at The Cheesecake Factory and Grand Lux Cafe increased 2,7 percent in the fourth quarter of fiscal 2011 (14 weeks versus 14 weeks). By concept, comparable restaurant sales grew 2,7 percent at the Cheesecake Factory and 1,9 percent at Grand Lux Cafe.

«We delivered our best comparable sales and highest guest traffic levels of the year, driving 36 percent earnings per share growth. The Cheesecake Factory offers the strongest, most consistent guest experience in the industry – and our numbers confirm it. We have always been an operating company, and over the past few years, our level of excellence in food, service and overall execution has become even better, further separating our concept from others in the industry. This places us in an extremely strong competitive position», said David Overton, Chairman and CEO.

«Continued focus on an exceptional guest experience will be a key to extending our market share, and we expect that 2012 will represent our third consecutive year of comparable sales and guest traffic growth. This year also marks the beginning of our global expansion, which will be an important component to our future earnings potential, adding to our confidence that mid-teens earnings per share growth is a realistic and achievable goal going forward», concluded Overton.

Development

The Company now expects it will open as many as seven to eight new restaurants in the U.S. in fiscal 2012. In addition, the Company expects that as many as three restaurants in the Middle East will open this year under a license agreement.

Capital Allocation

During the fourth quarter of fiscal 2011, the Company repurchased 973’243 shares of its common stock at a cost of approximately 27 million USD. For the full year of fiscal 2011, the Company repurchased 5’992’024 shares, returning approximately 172 million USD in cash to shareholders, exceeding its plan for the year.