The Cheesecake Factory Reports Results for Fourth Quarter of Fiscal 2024

Business Wire

02-20

CALABASAS HILLS, Calif., February 19, 2025--(BUSINESS WIRE)--The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported financial results for the fourth quarter of fiscal 2024, which ended on December 31, 2024.

Total revenues were $921.0 million in the fourth quarter of fiscal 2024 compared to $877.0 million in the fourth quarter of fiscal 2023. Net income and diluted net income per share were $41.2 million and $0.83, respectively, in the fourth quarter of fiscal 2024.

The Company recorded pre-tax net expense of $14.4 million related to impairment of assets and lease termination expense partially offset by Fox Restaurant Concepts ("FRC") acquisition-related income. Excluding the after-tax impact of these items, adjusted net income and adjusted diluted net income per share for the fourth quarter of fiscal 2024 were $51.8 million and $1.04, 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 1.7% year-over-year in the fourth quarter of fiscal 2024.

"Our fourth quarter performance capped off an excellent year, with solid revenue and earnings contributing to record annual revenue and substantially improved profitability for 2024," said David Overton, Chairman and Chief Executive Officer. "While our fourth quarter results were led by the strength of The Cheesecake Factory restaurants, we delivered impressive performance across our portfolio of concepts. Consumer demand for the distinct, high-quality dining experiences we provide our guests across our experiential concepts reinforces our confidence in the long-term growth potential of our portfolio."

"We continued to capture market share, as demonstrated by the ongoing outperformance in comparable sales and traffic at The Cheesecake Factory restaurants versus the broader casual dining industry. During the fourth quarter, we opened nine new restaurants to strong consumer demand, for a total of 23 new openings for the year, surpassing our development expectations."

"Our fourth quarter and full-year results marked the achievement of our key financial and operational objectives, including comparable sales growth, margin expansion and accelerating accretive unit growth. With these accomplishments as a foundation, we are confident in our ability to continue delivering on our goals for 2025 and beyond. We remain focused on leveraging our scale, operational strengths and the appeal of our differentiated concepts to drive long-term value to our shareholders in the years to come."

Development

During the fourth quarter of fiscal 2024, the Company opened nine new restaurants, including three North Italia locations, two Flower Child locations, two FRC restaurants and the relocation of two Cheesecake Factory restaurants. Subsequent to quarter-end, the Company opened five new restaurants, including one North Italia location, two Flower Child locations and two FRC restaurants.

The Company now expects to open as many as 25 new restaurants in fiscal 2025, including as many as three to four The Cheesecake Factory restaurants, six to seven North Italia locations, six to seven Flower Child locations, and as many as eight to nine FRC restaurants.

Liquidity and Capital Allocation

As of December 31, 2024, the Company had total available liquidity of $340.7 million, including a cash balance of $84.2 million and availability on its revolving credit facility of $256.5 million. Total principal amount of debt outstanding was $455 million, including $345 million in principal amount of 0.375% convertible senior notes due June 2026 and $110 million in principal amount drawn on the Company’s revolving credit facility.

The Company repurchased approximately 11,800 shares of its stock at a cost of $0.5 million in the fourth quarter of fiscal 2024. In addition, the Company’s Board of Directors has declared a quarterly dividend of $0.27 per share to be paid on March 18, 2025, to shareholders of record at the close of business on March 5, 2025.

Conference Call and Webcast

The Company will hold a conference call to review its results for the fourth quarter of fiscal 2024 today at 2:00 p.m. Pacific Time. The conference call will be webcast live on the Company’s website at investors.thecheesecakefactory.com.

About The Cheesecake Factory Incorporated

The Cheesecake Factory Incorporated is a leader in experiential dining. We are culinary forward and relentlessly focused on hospitality. Delicious, memorable experiences created by passionate people – this defines who we are and where we are going. We currently own and operate 352 restaurants throughout the United States and Canada under brands including The Cheesecake Factory^®, North Italia^®, Flower Child^® and a collection of other FRC brands. Internationally, 34 The Cheesecake Factory^® restaurants operate under licensing agreements. Our bakery division operates two facilities that produce quality cheesecakes and other baked products for our restaurants, international licensees and third-party bakery customers. In 2024, we were named to the FORTUNE Magazine "100 Best Companies to Work For^®" list for the eleventh consecutive year. To learn more, visit www.thecheesecakefactory.com, www.northitalia.com, www.iamaflowerchild.com and www.foxrc.com.

From Fortune. ©2024 Fortune Media IP Limited. All rights reserved. Used under license. Fortune® and Fortune 100 Best Companies to Work For® are registered trademarks of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, The Cheesecake Factory Incorporated.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, without limitation, statements regarding the Company’s operations, growth, digital strategies and other objectives. Such forward-looking statements include all other statements that are not historical facts, as well as statements that are preceded by, followed by or that include words or phrases such as "believe," "plan," "will likely result," "expect," "intend," "will continue," "is anticipated," "estimate," "project," "may," "could," "would," "should" and similar expressions. These statements are based on current expectations and involve risks and uncertainties which may cause results to differ materially from those set forth in such statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. These forward-looking statements may be affected by various factors including: economic, public health and political conditions that impact consumer confidence and spending, including interest rate fluctuations, periods of heightened inflation and market instability, and armed conflicts; supply chain disruptions; demonstrations, political unrest, potential damage to or closure of the Company’s restaurants and potential reputational damage to the Company or any of its brands; pandemics and related containment measures, including the potential for quarantines or restriction on in-person dining; acceptance and success of The Cheesecake Factory in international markets; acceptance and success of North Italia, Flower Child and Other Fox Restaurant Concepts restaurants; the risks of doing business abroad through Company-owned restaurants and/or licensees; foreign exchange rates, tariffs and cross border taxation; changes in unemployment rates; increases in minimum wages and benefit costs; the economic health of the Company’s landlords and other tenants in retail centers in which its restaurants are located, and the Company’s ability to successfully manage its lease arrangements with landlords; the economic health of suppliers, licensees, vendors and other third parties providing goods or services to the Company; the timing of new unit development and related permitting; compliance with debt covenants; strategic capital allocation decisions including with respect to share repurchases or dividends; the ability to achieve projected financial results; the resolution of uncertain tax positions with the Internal Revenue Service and the impact of tax reform legislation; changes in laws impacting the Company’s business; adverse weather conditions in regions in which the Company’s restaurants are located; factors that are under the control of government agencies, landlords and other third parties; the risks, costs and uncertainties associated with opening new restaurants; and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission ("SEC"). Forward-looking statements speak only as of the dates on which they are made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by law. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements and the discussion of risk factors contained in the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as filed with the SEC, which are available at www.sec.gov.


The Cheesecake Factory Incorporated
Condensed Consolidated Statements of Income
(unaudited; in thousands, except per share data)

Consolidated Statements of Income	13 Weeks Ended December 31, 2024					13 Weeks Ended January 2, 2024					52 Weeks Ended December 31, 2024					52 Weeks Ended January 2, 2024
	Amount			Percent of Revenues		Amount			Percent of Revenues		Amount			Percent of Revenues		Amount			Percent of Revenues
Revenues	$	920,963		100.0	%	$	877,009		100.0	%	$	3,581,699		100.0	%	$	3,439,503		100.0	%
Costs and expenses:
Food and beverage costs		205,768		22.3	%		201,449		23.0	%		806,021		22.5	%		803,500		23.4	%
Labor expenses		315,231		34.2	%		308,555		35.2	%		1,264,382		35.3	%		1,227,895		35.7	%
Other operating costs and expenses		247,113		26.8	%		234,969		26.8	%		959,221		26.7	%		922,428		26.8	%
General and administrative expenses		57,783		6.3	%		54,683		6.2	%		228,737		6.4	%		217,449		6.3	%
Depreciation and amortization expenses		26,435		2.9	%		24,012		2.7	%		101,450		2.8	%		93,136		2.7	%
Impairment of assets and lease terminations expense		15,224		1.7	%		27,827		3.2	%		13,647		0.4	%		29,464		0.9	%
Acquisition-related contingent consideration, compensation and amortization (income)/expenses		(858	)	(0.1	)%		7,796		0.9	%		2,429		0.1	%		11,686		0.3	%
Preopening costs		7,635		0.8	%		9,579		1.1	%		27,495		0.8	%		25,379		0.7	%
Total costs and expenses		874,331		94.9	%		868,870		99.1	%		3,403,382		95.0	%		3,330,937		96.8	%
Income from operations		46,632		5.1	%		8,139		0.9	%		178,317		5.0	%		108,566		3.2	%
Interest expense, net		(2,137	)	(0.2	)%		(2,937	)	(0.3	)%		(10,107	)	(0.3	)%		(10,160	)	(0.3	)%
Other income, net		841		0.0	%		454		0.0	%		2,837		0.1	%		1,608		0.0	%
Income before income taxes		45,336		4.9	%		5,656		0.6	%		171,047		4.8	%		100,014		2.9	%
Income tax provision/(benefit)		4,182		0.4	%		(7,025	)	(0.8	)%		14,264		0.4	%		(1,337	)	0.0	%
Net income	$	41,154		4.5	%	$	12,681		1.4	%	$	156,783		4.4	%	$	101,351		2.9	%

Basic net income per share	$	0.86				$	0.27				$	3.28				$	2.10
Basic weighted average shares outstanding		47,953					47,828					47,789					48,324

Diluted net income per share	$	0.83				$	0.26				$	3.20				$	2.07
Diluted weighted average shares outstanding		49,645					48,609					48,974					49,050

The Cheesecake Factory Incorporated
Selected Segment Information
(unaudited; in thousands)


	For the 13 Weeks Ended December 31, 2024
	The Cheesecake
	Factory			North		Other
	restaurants			Italia		FRC			Other			Total

Revenues	$	669,382		$	81,309	$	85,119		$	85,153		$	920,963
Costs and expenses:
Food and beverage costs		149,130			18,371		18,346			19,921			205,768
Labor expenses		221,494			29,559		29,941			34,237			315,231
Other operating costs and expenses		175,382			21,598		25,090			25,043			247,113
General and administrative expenses		-			-		-			57,783			57,783
Depreciation and amortization expenses		16,768			2,591		3,143			3,933			26,435
Impairment of assets and lease terminations expense		330			-		14,893			1			15,224
Acquisition-related contingent consideration, compensation and amortization (income)/expenses		-			-		315			(1,173	)		(858	)
Preopening costs		1,884			2,230		2,396			1,125			7,635
Total costs and expenses		564,988			74,349		94,124			140,870			874,331
Income/(loss) from operations	$	104,394		$	6,960	$	(9,005	)	$	(55,717	)	$	46,632


	For the 13 Weeks Ended January 2, 2024
	The Cheesecake
	Factory			North		Other
	restaurants			Italia		FRC			Other			Total

Revenues	$	658,445		$	67,224	$	70,913		$	80,427		$	877,009
Costs and expenses:
Food and beverage costs		152,401			16,206		15,769			17,073			201,449
Labor expenses		225,951			23,897		25,083			33,624			308,555
Other operating costs and expenses		173,781			18,285		19,335			23,568			234,969
General and administrative expenses		-			-		-			54,683			54,683
Depreciation and amortization expenses		16,251			1,694		2,289			3,778			24,012
Impairment of assets and lease terminations expense		20,241			1,015		2,527			4,044			27,827
Acquisition-related contingent consideration, compensation and amortization expenses		-			-		316			7,480			7,796
Preopening costs		4,457			2,926		1,998			198			9,579
Total costs and expenses		593,082			64,023		67,317			144,448			868,870
Income/(loss) from operations	$...	65,363		$	3,201	$	3,596		$	(64,021	)	$	8,139


	For the 52 Weeks Ended December 31, 2024
	The Cheesecake
	Factory			North		Other
	restaurants			Italia		FRC			Other			Total

Revenues	$	2,661,627		$	299,575	$	299,969		$	320,528		$	3,581,699
Costs and expenses:
Food and beverage costs		599,899			69,505		66,665			69,952			806,021
Labor expenses		913,560			111,082		108,377			131,363			1,264,382
Other operating costs and expenses		696,739			82,290		88,672			91,520			959,221
General and administrative expenses		-			-		-			228,737			228,737
Depreciation and amortization expenses		66,010			9,244		11,389			14,807			101,450
Impairment of assets and lease termination (income)/expenses		(1,402	)		-		14,893			156			13,647
Acquisition-related contingent consideration, compensation and amortization expenses		-			-		1,262			1,167			2,429
Preopening costs		7,499			7,409		9,206			3,381			27,495
Total costs and expenses		2,282,305			279,530		300,464			541,083			3,403,382
Income/(loss) from operations	$	379,322		$	20,045	$	(495	)	$	(220,555	)	$	178,317


	For the 52 Weeks Ended January 2, 2024
	The Cheesecake
	Factory			North		Other
	restaurants			Italia		FRC			Other			Total

Revenues	$	2,595,066		$	258,878	$	263,923		$	321,636		$	3,439,503
Costs and expenses:
Food and beverage costs		607,439			64,425		59,865			71,771			803,500
Labor expenses		907,579			93,540		93,840			132,936			1,227,895
Other operating costs and expenses		685,521			69,918		72,554			94,435			922,428
General and administrative expenses		-			-		-			217,449			217,449
Depreciation and amortization expenses		64,206			6,407		7,916			14,607			93,136
Impairment of assets and lease terminations expense		20,401			1,015		2,582			5,466			29,464
Acquisition-related contingent consideration, compensation and amortization expenses		-			-		1,262			10,424			11,686
Preopening costs		12,857			5,058		6,482			982			25,379
Total costs and expenses		2,298,003			240,363		244,501			548,070			3,330,937
Income/(loss) from operations	$	297,063		$	18,515	$	19,422		$	(226,434	)	$	108,566

The Cheesecake Factory Incorporated
Selected Operating, Restaurant and Balance Sheet Information
(unaudited; in thousands, except statistical data)


The Cheesecake Factory restaurants operating information:	13 Weeks Ended D ecember 31, 2024			13 Weeks Ended January 2, 2024			52 Weeks Ended December 31, 2024		52 Weeks Ended January 2, 2024
Comparable restaurant sales vs. prior year		1.7	%		2.5	%	1.0	%	3.0	%
Restaurants opened during period		2			3		3		6
Restaurants open at period-end		215			216		215		216
Restaurant operating weeks		2,795			2,783		11,214		11,010

North Italia operating information:
Comparable restaurant sales vs. prior year		1	%		7	%	2	%	8	%
Restaurants opened during period		3			3		6		3
Restaurants open at period-end		42			36		42		36
Restaurant operating weeks		535			442		2,021		1,729

Other Fox Restaurant Concepts (FRC) operating information:⁽¹⁾
Restaurants opened during period		2			3		8		6
Restaurants open at period-end		48			40		48		40
Restaurant operating weeks		611			512		2,264		1,906

Other operating information:⁽²⁾
Restaurants opened during period		2			-		6		1
Restaurants open at period-end		43			39		43		39
Restaurant operating weeks		551			519		2,114		2,074


Number of company-owned restaurants:
The Cheesecake Factory		215
North Italia		42
Other FRC		48
Other		43
Total		348


Number of international-licensed restaurants:
The Cheesecake Factory		34

(1) The Other FRC segment includes all FRC brands except Flower Child.
(2) The Other segment includes the Flower Child, Grand Lux Cafe and Social Monk Asian Kitchen concepts, as well as the Company's third-party bakery, international and consumer packaged goods businesses, unallocated corporate expenses and gift card costs.



Selected Consolidated Balance Sheet Information	December 31, 2024			January 2, 2024
Cash and cash equivalents	$	84,176		$	56,290
Long-term debt, net of issuance costs ⁽¹⁾		452,062			470,047

(1) Includes $342.1 million net balance of 0.375% convertible senior notes due 2026 (principal amount of $345 million less $2.9 million in unamortized issuance costs) and $110 million drawn on the Company's revolving credit facility. The unamortized issuance costs were recorded as a contra-liability and netted with long-term debt on the Condensed Consolidated Balance Sheet and are being amortized as interest expense.

Reconciliation of Non-GAAP Results to GAAP Results

In addition to the results provided in accordance with accounting principles generally accepted in the United States of America ("GAAP") in this press release, the Company is providing non-GAAP measurements which present net income and net income per share excluding the impact of certain items. The non-GAAP measurements are intended to supplement the presentation of the Company’s financial results in accordance with GAAP. These non-GAAP measures are calculated by eliminating from net income and diluted net income per share the impact of items the Company does not consider indicative of its ongoing operations. The Company uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons.

The Cheesecake Factory Incorporated
Reconciliation of Non-GAAP Financial Measures
(unaudited; in thousands, except per share data)


	13 Weeks Ended				13 Weeks Ended				52 Weeks Ended				52 Weeks Ended
	December 31, 2024				January 2, 2024				December 31, 2024				January 2, 2024

Net income (GAAP)		$	41,154			$	12,681			$	156,783			$	101,351
Impairment of assets and lease termination expenses⁽¹⁾			15,224				27,827				13,647				29,464
Acquisition-related contingent consideration, compensation and amortization (income)/expenses⁽²⁾			(858	)			7,796				2,429				11,686
Tax effect of adjustments⁽³⁾			(3,735	)			(9,262	)			(4,180	)			(10,699	)
Adjusted net income (non-GAAP)		$	51,785			$	39,042			$	168,679			$	131,802

Diluted net income/(loss) per share (GAAP)		$	0.83			$	0.26			$	3.20			$	2.07
Impairment of assets and lease termination expenses⁽¹⁾			0.31				0.57				0.28				0.61
Acquisition-related contingent consideration, compensation and amortization (income)/expenses⁽²⁾			(0.02	)			0.16				0.05				0.24
Tax effect of adjustments⁽³⁾			(0.08	)			(0.19	)			(0.09	)			(0.22	)
Adjusted diluted net income per share (non-GAAP)⁽⁴⁾		$	1.04			$	0.80			$	3.44			$	2.69

(1) A detailed breakdown of impairment of assets and lease termination expenses recorded in the thirteen and fifty-two weeks ended December 31, 2024 and January 2, 2024 can be found in the Selected Segment Information table.
(2) Represents changes in the fair value of the deferred consideration and contingent consideration and compensation liabilities related to the North Italia and FRC acquisition, as well as amortization of acquired definite-lived licensing agreements.
(3) Based on the federal statutory rate and an estimated blended state tax rate, the tax effect on all adjustments assumes a 26% tax rate for the fiscal 2024 and 2023 periods.
(4) Adjusted net income per share may not add due to rounding.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250219585576/en/

Contacts

Etienne Marcus
(818) 871-3000
investorrelations@thecheesecakefactory.com

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The Cheesecake Factory Reports Results for Fourth Quarter of Fiscal 2024

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