CAKE - Earnings call transcript Q4 2024 | The Cheesecake Factory Incorporated

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Operator

Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today.

At this time, I would like to welcome everyone to The Cheesecake Factory Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] Thank you.

I would now like to turn the conference over to Etienne Marcus, Vice President of Finance and Investor Relations.

begin. may You

Etienne Marcus

welcome Call. and Fourth Fiscal Quarter Good to Earnings XXXX afternoon, our

On David and today and me Chief the with call are Executive President Officer; Gordon, Financial Officer. our Chief David Overton, our Clark, President; Matt Vice and Executive Chairman our

be Exchange let fact will of and as meaning forward-looking is within All that on we made are call, call forward-looking begin, the available that, update factors of and this undertakes based could forward-looking be those results of speak statements from a implied website the Securities this Actual of statements. Act today's to quickly duty considered only our XXXX. company in any me and Before are Litigation at the investors.thecheesecakefactory.com result forward-looking the with today's you not remind during date Commission. different items which on discussed historical Reform or Private no filings and on in statements press release, our as statements materially stated detailed in Securities the

conference our we financial and In terminations our this GAAP comparable assets our reconciliations release acquisition-related as the in lease press on explanation excludes impairment call, basis, on non-GAAP website, during will of and results be described. and An most directly expenses. an use addition, of adjusted of presenting which to measures measures appear previously

opening David to opening on will and commentary financial some David outlook, and then quarter with up fourth questions. Gordon provide financial Overton our results an our call will today's begin update. before review remarks, will operational Matt call the provide

over With that, to Overton. David I'll call the turn

David Overton

Etienne. Thank you,

their are in recent Angeles we events first highlight our I'd moment work take a responders and the our and to to for and who the all to begin, extend These acknowledge devastating the service. I of very communities, dedication firefighters affected. grateful sympathies deepest to our tirelessly Los those like area Before protect wildfires

turning high with ended delivering the year to the sales Now a dependable our We results, Cheesecake leading to development The restaurant outperforming on revenues, unit again comparable once industry, and guidance. quarter traffic fourth note, Factory results. earnings and our exceeding consistent and

XXXX, while adjusted opening record-high revenues more and In new also annual fact, in a history. share than single ever per restaurants earnings generated we in in our company's before year

I've our steadfast on menu said service a design of maintaining delivering decor quality, hospitality. food As innovation, and the our performance before, our of and reflection is and restaurants, contemporary exceptional focus

are latest than the by point, well-received this variety our cuisines, with rolling XX more To we menu The menu, a and positive offerings. feedback, of range guests broad our our in price new midst the items new categories been which features across quality has contemporary out of points. the and highlighting of

of discounting, high continue landscape. us to drives competitive innovation menu the we best-in-class coupled with our need and degree set a apart the for ongoing Our believe, without relevance operators, will in

quarter-end, restaurants. for weeks, and the the in new quarter. openings a we quarter Factories, to restaurants, Turning development. demand, Flower X We opened Italia, total North more X X And the in X Cheesecake in X Flower consumer as restaurants X Italias, to including X Childs opened FRC restaurants. restaurants and X FRC to Childs fourth X many as to coming strong expect X of North X Subsequent including open we first

to expect to XX looking our as as we and many XXXX. restaurants in development now momentum on open We're build new

internationally X Additionally, we Factory licensing anticipate as agreements. many under Cheesecake to restaurants as open

forward. power our larger growth in our results experiences to our distinct, high-quality going the of the for strategy confidence demonstrate reinforcing our portfolio. growth platform guests long-term sustainable our experiential demand in across dining consumer the drive closing, we our reinforces our of our concepts In provide confidence and potential provides, value And

the turn David update. now Gordon to I'll call an that, provide over to operational With

David Gordon

you, on without memorable possible relentless delicious our The exceptional operators' guest not and execution results focus and be restaurants. would managing delivering their Thank David. experiences highlighted David while effectively

including years. the productivity, we contributing in margins Factory were record-high our level flow-through for in again, improvements profit over and business, restaurant-level Cheesecake labor the and To guest once better-than-expected And scores the marking restaurant-level fourth to satisfaction margins. point, saw across higher highest XX.X%, this quarter X

continued Importantly, in our operational industry-leading many management to support of improve, expect ongoing these which improvements and to staff retention areas. we

Factory casual XX%, from outperformed Cheesecake dining AUVs And an off-premise meaningfully in X.X% the Now year. contributed of recent million, the The $XX.X sales comparable basis quarters. mix line Black industry, by XXX comparable sales prior Box growth index once with more supported sales points. trends. turning to Fourth annualized importantly, of quarter traffic the increased exceeding to by

supports North $XXX,XXX, Italia This with comparable million. X demand, the thesis fourth new there an Italian from quarter of sales significant North AUV In AUVs X% $X.X contemporary exceeding as such for for on-trend, with Italia. fourth Italia over their prior North increased sales is in of aggregate year, annualized quarter, annualized the average opened our we markets an demand offering tremendous that existing to million. restaurants weekly $XX

predominantly margin mature the and a increase year driven price adjusted of in by October. from for prior North profit implemented to XX.X%. margin Italia meaningfully The Restaurant-level expansion menu operational improved locations the X% was improvements

from quarter which up the the Black the index, fast of was average for XXXX. improvement Child across XX%, dining outpacing Child's The We growth be Flower relatively trending Flower potential, sales increased significantly the quarter. as flat in by sales casual momentum about of quarter $XX,XXX, higher substantially with in continue This sales concept. fourth the resulted comparable evident sales optimistic Box fourth highly to XX% weekly was

of aggregate X Flower average solid reaching Additionally, Childs new we fourth AUV weekly $X.X in an annualized $XX,XXX, over to million. the with locations demand, quarter, for sales X the for opened nearly

place profile, accelerated Flower growth. support is an the Restaurant-level locations quarter. team, believe Flower in and demand poised adjusted XX.X% unit operations for the for was infrastructure fourth economic consumer With profit Child experienced Child for margin mature attractive strong and the we

Other $X.X were AUVs million. FRC annualized

summary, across believe expansion to In our and sales our growth operational portfolio, are unit encouraged We well-positioned the by strength, sustained performance moving are sequential support objectives driven forward. concepts. we margin very of improvements our by we

And call the me for turn financial over that, Matt to let our review. with

Matthew Clark

Thank David. you,

overview exceeded we our million with me and year total net fourth a quarter end income $XXX high Let results. provided. adjusted of high-level of X.X% and fiscal begin the Fourth of margin quarter of revenues guidance the

billion, For adjusted revenues $X.XX, per adjusted a the year-over-year share fiscal of of we EBITDA increase, delivered $X.XX year, XX% earnings $XXX million. of and total

X% year. X.X% Comparable $XXX.X details quarter versus prior Fourth around year. Now sales the quarter. turning at Factory million, The from the specific prior increased up some sales Cheesecake the to restaurants more were

XX% up $XX.X from the Italia from sales year. North prior sales and sales million, year, XX% Other week week sales prior million, And were million. sales XX% external operating $XX.X up were per were $XX.X and $XX.X Flower from year, per $XX,XXX. totaled the the operating Child prior $XXX,XXX. totaled million, FRC were sales up bakery

year-over-year commentary. realize across we fourth in to continued several quarter, variance moving key the improvement to In Now expense items the line P&L.

menu and a inflation. wage pricing sales XXX by improvements. points, commodity decreased decreased higher XX productivity labor menu and cost Specifically, to points, supported primarily inflation of basis pricing percent sales by as primarily basis Labor driven relative leverage of

the line a basis Depreciation percent points points operating were prior year. increased year. expenses as G&A in the increased of sales. prior Other with XX from XX basis

Cheesecake in X restaurant $X.X openings. X Note, compared We the QX in X included new the $X.X versus year's openings quarter fourth which lower were costs quarter, costs Preopening to standard XXXX. the million in the million restaurants required opened this Factory preopening fourth period. than during prior-year quarter, restaurants of relocations,

And FRC in quarter, we acquisition-related recorded and income. partially the assets million, of of to by a pretax $XX.X related net impairment expense, offset primarily termination lease fourth expense

GAAP share per income $X.XX. diluted net was net quarter diluted per Fourth Adjusted share was $X.XX. income

available including cash Total ended with liquidity balance capital on turning Now approximately million, approximately facility. The $XXX our million million quarter $XX company outstanding was balance allocation. and million. to credit our and debt the of about available a of $XXX revolving $XXX sheet total

during maintenance. unit CapEx totaled for approximately quarter $XX million development and fourth new the

$X.X approximately and via dividend. share million to $XX.X million in During repurchases we the returned quarter, our completed shareholders

Now to shift outlook. let me our

as ahead, and restaurant weeks in which comparable underlying thoughts counts, our material assumptions effect will net While the operating The includes year know sales will in XXXX full and we we and provide think of XXXX. not quarter-to-date any factor associated earnings our QX the today, happen everything trends, updated with be providing disruptions. or impacts for specific what assumes of will on assumptions guidance, we no consumer and we holidays,

quarter. QX, we to includes sales far This an in million to inclement anticipate in impact $X For be and $XXX approximately due so $XXX the between million estimated million. of experienced total weather revenues

our as commodity at time, of effective expect Next, remains digits QX market very inflation single this low for basket we stable. broad

minimum digits modeling as when low We net increases latest in labor of labor. rates total factoring the mid-single in of and as other wage trends components are well inflation to wage

G&A million. to Depreciation estimated $XX approximately about is estimated $XX is be be to million.

openings We support and are early $XX the to planned preopening estimating in approximately X openings. expenses million the quarter be QX to

anticipate net margin the to provided. sales income about Based on range adjusted these assumptions, we be X.X% X.X% would on to based

weighted tax average a XX we and of approximately million rate shares. are purposes, X% shares modeling For outstanding of assuming approximately

our $X.X fiscal material midpoint or total Turning billion fiscal sensitivity XXXX XXXX. anticipate no disruptions, and on Based for revenues to the approximately similar be modeling. consumer we of assumptions operating to at

of plus X%. For or purposes, are sensitivity range minus using a we

We the total fairly to our basket, to currently labor and low quarters. the estimate mid-single-digit in inflation commodity and expenses other across across range, be operating consistent

G&A depreciation year-over-year about are for be basis given our million. and We to of $XXX to approximately the be expenses estimating to a $XX preopening be we lower expectations, points growth XX And percent year. estimating are sales, about as million

income would margin provided. sales full-year be we assumptions, X.XX% expect these the on estimate at net approximately Based to

tax modeling assuming shares we to XX% relatively a flat weighted are rate For and XXXX. outstanding purposes, average

development, we to earlier, growth stated With to as regard this unit David accelerating year. continue plan

now restaurants year of back this the many at the as open as XX we As half new in first the expect XX in remainder to with such, XXXX, many openings in the and as half. as time,

North many anticipate unit we as million support Cheesecake Childs, CapEx as in This $XXX to X as X X maintenance and to X X X restaurants. X required development restaurants. million includes to cash our well as would to And to X Flower on to $XXX Italias, FRC factories, approximately

fourth XXXX. our to the the solid operational by and success, move operating In both and quarter The dedication as strength and exceptional teams for and closing, performance positioning we continue well strong into sales, of highlighted year, growth. our we significant full our profitability operational drive delivered concepts execution financial of us

on unit forward. going growth growing restaurant restaurant operating we we momentum, accelerating expanding build and shareholder to this margins, focused value sales, meaningful comparable As remain accretive on drive

we'll said, your questions. that with And take

Operator

Your David Tarantino first [Operator Baird. Instructions] the question of line from comes with

David Tarantino

guidance. Matt, your clarification just a quick question on

the at last time And $X.XX revenue in billion billion. $X.X said midpoint. I you have said think I you might think

wondering guess, driving growth what change? the comp your Is guess, assumption? you that, change really did changed. minor just I So it unit outlook? what's Or I

Matthew Clark

went David, Yes. right? as it's year opened well. The originally restaurant by growth year, increased Matt. last than up, we X and X then unit to guided this We more

So And then the the the right? of half first XX year. timing, restaurants we've got in

just we're operating getting more So in. weeks

So that's upside. driving the

Our performance as our a remain last assumptions consistent comp that. year, continuation of

David Tarantino

guess the I like year, then assuming it for And on you're it. doesn't expansion. seem much this outlook margin Got

saw in So kind margin momentum not Or after guidance factors over a had improvement you're there exiting anticipating are you guess, conservative where XXXX the respect? a is of in you I in your that carrying wondering, XXXX? performance, really just year that nice maybe year-over-year that

Matthew Clark

Sure. This Matt again. is

'XX a points lap and there's the continue of year-over-year Cheesecake preopening to relocations probably planned-for as increase dynamics. Number basis couple is XX locations. So then we one, a early of spend and even the couple

of to points. as basis that, in think I that probably number front-loaded have XX unit that's some been we history, an openings -- and it's increase the our newer with ever also weeks as in XX

points that the certainly, the where to to expect we assumptions mature basis be expansion, level, consistent level, to at the continue we last feel margin of very XX that. our XX time. about guided see to with confident and mature So At still we'd

we We in your moving it out a the early great point, just feel hero make it's that the really right, as and think nobody set the coming the also year, we everything sure be forward about still needs is want We momentum. to to appropriately. I to. And expectations And expected to gate. of

Operator

of Vaccaro. Your line next the Brian comes question from

Brian Vaccaro

because into I even some brand some The of each Cheesecake I getting North just quarter just could noted drivers margin strong wanted were And that about quarter. I expansion. obviously, the Maybe fourth margin you could potentially And labor think what Factory upside performance. labor you versus leverage you Italia, productivity, the margins? unpack -- ask nice saw this yes, guess, unpack to the some in

Matthew Clark

Sure, Brian. This Matt. is

handily call one, things upside obviously, I was the strong great are some quarter there a of sales guidance. it out. would X was there think And flow-through. that I beating us, for Number the

I our extra concept. by restaurants had think specifically that of increased for the piece that. sales example, see tremendous sales delivered on and Flower you And profitability. Child,

quarter's coupled And at and the quarter quarter Factory, stability continued so another particularly Cheesecake third trend high trends, our levels. productivity great major all-time again sales with retention the in improving Certainly, a sequential the of just seen labor that predictability continued we've to financial of to into the contributions fourth category, right? and statements, yet level, has an that exceeded

X our concepts, And really those together the then I did we it's So I of performance main drivers. think, retention a exceptional across And sales see, margin portfolio. the are of combination all the piece. and the for think piece

Brian Vaccaro

helpful. That's right. All

I both And components North the Factory could walk and sorry but comp you quarter? in if it, the missed through Cheesecake for

Matthew Clark

Yes.

Cheesecake the for Factory, So about X.X%. was a the negative Traffic X.X%. net effective pricing was pricing,

And a mix was the negative so X%. about

was on-premise, little of so we see to size, about because X.X% think pretty in industry. in the the original that's I that little a a to bit higher component, our normalization negative bit guide, of as that, of a color little probably component party I a little alcohol our Just was off-premise And been there, common saw think we continue it. than

in about in think have. ranges And the we came where comp we good pretty I within are felt the pieces total. the individually all that So

to me. in going I come quite to it. we'll back I'm look the have front to for on we'll that, have North, And find you it of don't

Operator

comes line the of question with next Your Jefferies. Andy Barish from

Your next Tower line of question with Jon Citi. comes from the

Jon Tower

the for that's that clarification. the due does first, coming contemplate on convertible June? interest margin, for Matt, of guidance XX% in Maybe a the net refinancing

Matthew Clark

in about will, the Yes. great active moves. particularly closer discussions Current That's as our I question, with a get in Jon. you that, we Board we've into June. the if mean been to looking stock status,

So we broad-stroke some guidance. into are have that actively contemplating we of incorporated that. sort And assumptions

Jon Tower

Okay.

or it clarify. not? does Sorry, to So does just

Matthew Clark

It does. It does.

Jon Tower

whether on how it's about see core terms perhaps I'm opportunity that business little terms I platform perhaps or thinking call provide curious some the an you this in a then think bit Great. the more Italia and, be just for Cheesecake being Okay. maybe spill discussed at able brand over program, if in across you could call, if on the last Flower bit, And was but and it little of itself. a to frankly, updates rewards -- time, portfolio it to was, because at the we leverage Child expecting I your color this or just North it, of just impacting

David Gordon

Sure. Gordon. Jon, David this for the is Thanks question.

was even Member be Cheesecake continues to very into throughout Factory. internal and continue expectations January QX, acquisition at Rewards, exceed We bullish positive. specifically to our own Cheesecake on

So it's great to see.

very scores guest at are of all-time NPS high. that satisfaction scores, to Our show already over-indexing on members sort our continue an high

we And continuing best that tactics have X margin-neutral and different acquisition and make level throughout and to test profitable get of our program, the and of and guests And that's to continue sure out best coming We're engagement, to enrollment frequently. the X we're and guests or average their program. drive increasing campaigns of to more goal seeing are frequency. the our drive it's visits guests, to growth activation our

a guest cross-concept most attractive. program, to things it we Cheesecake for make be with from Factory, the delight, the to perspective, plan something a And do continue to but the part to the that, unique, it like at is not Cheesecake focused program for still our is keep with Factory, and rewards more surprise So of not now been keep experiential, poles moving always to points-based and then with also some able are and guests have of published access. it tent program rewards that the

Jon Tower

And peak sales the of coming either total at platform? any sign-ups terms that of through are rewards color reservation percentage or in or in

David Gordon

we'll We the asking that actually in I sharing information. But still future. are again. see you appreciate not

Jon Tower

pricing rolling any out lastly, for are Then with just now, incremental out for Okay. on pricing? there the menu rolled is or new that expectations 'XX,

Matthew Clark

Matt. No. effectively be at point It's in this is that time. level going Jon, this around X% to

And over. in of to between so get But then we we're where pretty the see lapping a just And kind consistent. long time and then. we'll summertime, now

Operator

Your next Barish comes Andy Jefferies. from question the line of with

Andrew Barish

more that. Sorry One time.

that. about Sorry

part lower-priced of this a I anything haven't you yet, do. you'd it menu, of know Just I guys call selection or regular a on what to But -- of seen menu but on is the new there? anything anything sort items, of more highlight out?

David Gordon

is Andy. Gordon. Sure, David This

large very items. a obviously, Smash think change, are A the few some I like it's price Cheesecake different crosses put XX and points, menu sort beverages. cuisines, items to right-up-middle-of-the-road then that with items, burger on different those unique some And So menu. up we it of of Factory

also some fritters. carrots, chicken baby jalapeno cucumbers, roasted some some Asian great new vegetarian There's some options,

you there's cuisine, America nothing our that And great price of across name of that representation say can't that want. points. all menu all of the might always and I'd on types menu this So of is type cuisine we've said types put we a

it I free the in delivered. on and restaurant try feel So out to it to go encourage or DoorDash you either there jump and would have

Andrew Barish

appreciate Yes, up tracking and XX%. Flower then And of that. the Child kind on is comps, AUV

those numbers. been the markets kind of in as just of kind us XX% going it noted of the understand help comp quarter assume there? level you brand build the -- What's that you Is just of I of ramping. comp So reaching kind of fourth Or has out? on that for double-digit awareness sort

Matthew Clark

about stay that going it at done throughout different question. of lot for but And forever, Yes, pieces performance the ramping up we've that Andy, that doesn't has Matt. double it's there. this the We're together. year. to pull it that you're digits And is right really to happy thanks been a mean

improve A program and the the specifically. We've execution. Remember like component of of a the of That's it. gaining the coordination the couple at the also was those basically rewards certainly, of relaunch that between XXXX the put introduction their Child off-premise things of But brand the Certainly, quite And traffic. catering levers on-premise KDS comp. in been for beginning Flower to we bit work been to adding were to of did contributor. the a awareness.

it's one but aggregate. continues of an one think a I it's piece, points couple of not contribute comp. the So Each pieces to those growing to

Operator

Your comes the Brian from with next of Bittner question line Oppenheimer.

Brian Bittner

In your X% a X% long-term look your you comp. growth of framework, I about to When revenue growth target to the X% on to average is X% X% target X% XXXX, at X% comp. annual revenue on

just Is is moving what on unlock get revenue that after to of I'm to range. X% it underlying XXXX? how that Or better X% curious So forward question? the the just comp you would units new contribution to growth answer

Matthew Clark

Yes, year Factory, last of X% had like those right Matt. of just So going Brian, X to closures world, unplanned math really Cheesecake It's X simple the normal and where in then about right? you relocations, it's about that's back think actually a that comp really a we there. were openings

essentially which if situation, this at we'd doesn't So be happen, year. very X% that unique, an was

mean fantastic, of alluded Gordon So contribution planned the $XX gate. in from rate think comments. perspective fourth we're in quarter already is a the North the openings units The as there out on new to I the David opening. I the million averaging from run our

the to basis. future that that like run a great feel X% no, annual about on in feel and we've we getting X% So of terms rate, hit consistent

Brian Bittner

that, really important still rolled of this about comp into, talked just a have underpinned component flattening you comp. in which that's about being X% X% about mix, And mix kind that XXXX. out has talked with you new flattening you revenue the the that out? particularly something you've feel of build. Is outlook within you've out your menu And to negative, a good been visibility Okay. Obviously, XXXX by

Matthew Clark

Yes, I do.

because material very not look, traffic quarter, total X.X% think, probably terms consistent. but to that's the was very, in of fourth in be it the I continues guide, higher right,

even So Cheesecake were with on at above consensus we X.X%. still the that, comp

like feel I So the is business predictable. extremely

help few out right? seen attractive menu I your to or the think, And So a category think we one are year that's appetizers of points. Quite new And also that, a them in. of the industry only incremental because point, we price will rolling some beverages, with are has nonalcoholic that focused sides. have some this the I pressure little on bit do

we and range continues is of are that definitely like that business comp addressing and the So be predictable we to attainable. certainly all feel

Operator

the Your from of Jim with next question comes Stephens. line Salera

James Salera

for I on to point the the FRC a wanted restaurants year. clarifying ask maybe

I You of in varies for XQ. the X, to X already boxes the said guys and called believe size X pretty you But opened drastically.

trying or to contribution some just open we're And Can should half you out size average kind the more when for then like units you think throughout full to expect new year? spread so are around the portfolio FRC color they year. year? us about those front going under to of just restaurants expect of we And give the the the them, be this of

Matthew Clark

Jim, is Matt. Yes, this

probably, of fourth. FRC-specific, the X although say, pretty spread end and the So third, I third like quarters the think first, early near in the about maybe it for out, second would

much is of million, average they're what of contribution around doing. pretty which to feet, size, X,XXX Average and about square X,XXX kind $X

So for any what there be we has aggregate than see don't them. difference that will in been the trend

to way in. that's them model mathematical kind of So a

James Salera

frequency building And to you more expand how versus you brand? Italia, the to strong frequency just think then significantly really out best other And that visits talked guest with density the but the How people times I more average concepts, of get guests X expect Great. have per about guests X gears believe shifting the a come concepts, to little that more do maybe per past, kind introduced Flower times as these bit. do units? you in even Okay. frequently, maybe double-digit of been you Child, between year. Cheesecake North the year, some

David Gordon

Gordon. Jim. is David Sure, This

year. average is a X, the more think like a X little I Cheesecake

Cheesecake guests aspirational X. Our at more coming to X celebration like in maybe for that's a is

fast in across you Child a certainly, a frequently, lunch, casual, and breadth way, look could coming more like be different case have use XX% a probably for dinner, Flower times you versus a the When using few XX% being where of lunch people other concepts, other a especially, XX% concepts. week, completely it it's considering It's lunch, off-premise, primarily, the the very mix.

unique So it frequency. has a probably of different profile

The to I Other FRC OpenTable, for for concepts very which source and we've can North. Cheesecake other Factory, good is we is what that and of all thus seen North, through think look similar that's far in reservations data FRC the whether data concepts, a at, at the

Operator

Barclays. comes Your with the from Bernstein of next line question Jeffrey

Jeffrey Bernstein

is quarter. improving have My Great. know shifts. holiday of after first to continued seeing and quarter, far trends things for more the first little fourth industry, seems like and It many for the fourth that about maybe talked trends. I question thus the recent slowed a on in broader most the just weather the close quarter,

maybe $X million noted you think weather I a hit.

the of Just trying far or then first in in you've whether sense fourth through consumer if at and X to couple you've underlying but anything I And whether your all, the whether have haven't, stable to follow-up. to get has seen comp you quarter. past thus maybe seen you been any there's change believe behavior else quarter months, the a

Matthew Clark

Jeff, this is Matt.

provided, shows there's comps steady now it I that in you that range quarter-to-quarter. pretty think when the model we've from even

through weather Factory right? I to are impact feet cycles before the been We've and pretty in there's have and easy to Pittsburgh, snow So so these in incredibly sales, you concepts resilient. see of then other X an Cheesecake the data when it's differentiation, think

of of temperature or they and not going those -- some not talking just we're Because really events. coming about whatever, weather were are the

feel and despite out. we even comps what so the And lays been that guide that's that, our consistent, very confident have

do I like in a good we're spot overall. feel So

Jeffrey Bernstein

That's Italia about Flower know Child, great. annual my talked you follow-up, and type just unit I growth. And XX% for North

faster? factor asking, With feel reverse gating by For you guys that doing most order. you are accelerate people I companies, XX% is going the can in like always plus, the

estate? back, that your staffing the comfort that looking growth Cheesecake I real whether mean in level managing growth, or had just it's years. at manager I was degree wondering level in XX level I'm or of of And hasn't

a So type being Italia and sense again, in unit Child growth at just those, able brands. confidence trying to your to Flower get that for sustain XX% North

David Gordon

Great David question, Jeff. Gordon. This is

past few North retention to years, hard in the place and for to Child, the we at have been able we growth, have manager ensure that be specifically working on XX% grow and talent and development think rate. we at Flower because to I want

So Factory Cheesecake retention, also seen in the with at management benefits we've some we've that of improved seen North.

managers So really we we that general executive highly feel need chefs pipeline a execution all and to restaurant the talent with good enable about talented management of new the across for openings of concepts.

the these talent able us hit targets. confident and design, been sure open open be teams that planned-for feel across those corporate very place our we years help restaurants, construction, on the make right right Certainly, that real to all properly center have and on time. to pipelines working team, now on And estate the the strong for have in on the all infrastructure side, very that opening of we have they're

Jeffrey Bernstein

already percentage of And does in units in proximity it seems into? located typically average. Cheesecake? a the a advantage to you feel are close like Like North Italia reasonable proximity are competitive want knew to I you to what big affluent the market box, if Italia generally you'd have go little like than more the units feel It bit Cheesecake North a like similar, Factory? the they're

David Gordon

on would North, the demographic, probably profile very all right similar the them, Probably consider right to of a you're close you in majority for guest of because within depending look XX Factory. Cheesecake would those what them, are miles, proximity. saying But a if that the we

Operator

from Sachs. line with next Cho Christine Your comes question of the Goldman

Hyun Jin Cho

further stable labor here? I key on you the are these room the from see some And XXXX, I to tailwind continue huge the labor And variables even you. here for what do to know So for has improvement levels? into market you just XXXX? been a up follow of efficiency. wanted in Do expect this some

David Gordon

David is again. year. maintain goals our we to this of to is were Christine, year levels this Certainly, the one Sure. achieve last that for Gordon able

company. all-time As stated attrition the earlier, for lows Matt in these are

So a satisfaction. have in know operators we because the and programs across and in restaurant, side, the goals management contributor staff ensuring to we've talked that to execution place, to they the to guest everything on we that sales, been set it's place, from remains around some solid profitability have the and key the

The January, macro we think can world to Even around terrific so numbers we we far. in maintain levels. saw some attrition. those So stable seems really relatively be

So the it's things the we the when we one to of it business, are side comes people that of best at. think

be People for continue the want hours work culture. best-in-class come the in of and We the a to to employer. stability because us

done increased think culture I and concepts spreading we've as they've other job good seen the now well, retention. improvement across that of a in

So have I and it in to maintain where year. place about this the we think we feel programs for are good

Hyun Jin Cho

it does like here space feel And value to narrative Great. the stay. is stepped-up across the

peers? of scores years telling CAKE's guests differently versus relative key are you consumer but turn? record-high, prior messaging you about what your your You did kind so mention approaching are in proposition CSAT any relative intelligence to And to your value the is

David Gordon

Well, certainly again. -- David this is

as $XX.XX $XX. look guests One of menu And is few different points, to points. range new earlier, about is we our a price definitely at everything think great price I talked value ways. a from this

it's appetizer, value different which those of at price points. steak $XX, with all you our price offering So a what if best to ever comes had is, high-end at there. an point we it a frites you've meeting is if Or looking if steakhouse, some great want value the for that you compare are a to you're when lower

Cheesecake I of course, options portions so So that experience the the of day. point played at today. has people And overall different of the for many next Cheesecake size allows that value and a of on for people looking proposition value well the price have a the of And to for because think the share is always guests. of leftovers part of experience, the proposition large the are dining experience the

Operator

Bank of with Katherine next comes of from Your line question Griffin America. the

Katherine Griffin

about for didn't to growth Italia this contextualize sure quarter meaningfully, outpaced given first quarters, trend ask last the has Cheesecake is just core comps. where North the to wanted First, and make I I I happen. can pretty several that, that them want

So anything of or just comparisons North versus anything terms might is period-over-period calling Italia -- if at to in just like Cheesecake think like in out in cadence there's you comps fourth there quarter? slower seen growth monthly the worth to -- have why that's the about

Matthew Clark

me I'm Matt. is get question. that window to glad this the because Brian's back it up brought Katherine, gives to you

slightly just was So similar for is to mid-Xs. the very the pricing The traffic similar Cheesecake too, Factory, was in negative. North

that's a The North. again, the heavier a X impact really, for past quarters. X little alcohol to been mix was of of in bit It And kind the for has category.

If there. a component think heavier has you about just North

Cheesecake It on, very good. very feel Gordon North stable. But margins commented similar were see we mature very, very Factory. very really consistent could was strong, and And the with the margins David to you up that

really and very just in of is little everything time we differential a feel consistent a the mix like alcohol in at bit component. this So point

Katherine Griffin

spoken it I'm up leverage think there's so at unit of Child costs. for also curious North the then inefficiencies your is or I North new if honeymoon versus if at, that to past, was there years Okay. something a in it can that And that AUVs the about see Italia? build you Flower more Italia takes you've trend specifically, maybe you a few

Matthew Clark

Katherine, it's Matt again.

about and sales on the level, is faster to the up see regardless. into when targeted you I because we the of profile, North specifically get are ramp a awareness. market, they it's right? faster different fast brand existing able Flower, Flower the casual, think both the So Child right, go margins margin it to when for depends and we markets think up But

And either their to way, X.X of so year versus more X X the time period years. -- like is that probably

get it's the a it's time, much able sales up period shorter of or volumes, So market, to to team at new speed that overall. different faster for even to whether existing a be just

Operator

question next from Haskett. comes Farmer Gordon Your Jeff with line of the

Jeffrey Farmer

restaurant one they're an acknowledged anxious following today, weeks. management in question. couple teams, A Jeff's that Just up on recent of earlier seeing consumer including increasingly

calendar happening what's an that's your guys this concepts. So curious weather or this some whether seeing I'm consumer thinking not you increasingly for are beyond of and or how sort just anxious about shifts. your or is

Matthew Clark

I the that out. been Day. we data is weather able this in today. Valentine's to have Jeff, mean Matt. be I I say impacts it see the think parse us. that tremendous wouldn't would would that to we clear mean very I very, had We a

I want experiences go and have think out to still people regardless.

those it we're I for the things. types good we're we to be more back, and optimism quick-serve year. mean side or so if have -- on a off cutting But of I think And the start, might they're

you The shows years, I And X the happened. never think feel resilience incredible saw people been was I talking that recession It cycles. particularly about that's about coming like Cheesecake anxious I are consumer. that. right? talked for know Factory brand throughout

experience our And proposition, pretty feel weathered Gordon very a as people predictable. business so I we Factory I the And Cheesecake and we -- we see David think storm. unique, value as And think, still like being highlighted. is

Jeffrey Farmer

a does pricing All there. management somewhat follow-up, related, make a it, lot terms through little definitely around this first, to call sensitivities of bit that listening of right. then heightened the commentary implying cautious season, sort again, again, X/X more in earnings And of teams It and menu there's across out let's of price XXXX, some but sense. a

Cheesecake sort relates You just sensitivities. But curious you're it what acknowledged price of at that. as specifically the I'm seeing to core

Matthew Clark

still will, you regarding, if above rates, levels. like, say, we're attachment XXXX Well,

right, the preserve pricing the And the well. And mandate take, so inflation traffic in very we've very support that it across to proposition. We to dual business, to of guest really line to and and distributing through protect effective menu I the I been protect the straddled we've think always the needed waves that to value that we've margins. about about talk think all

We trading does and Cheesecake right? drive of what that to The that's come and And are that never that, the traffic. of where people Factory some for get discounting into challenges think that off the not are that's looking in, wars, I

And so middle full-service we'll much pretty space, continue the to monitor of the pricing. I mean, within the I the think range. still we're in

those a most I half because frankly, the earnings discussions, calendar, quick-service. think first centered of of around the is of lot

wouldn't coming of that the that fence. from that side was so commentary surprise And me, that

Operator

comes of Jim line Sanderson with the question Northcoast next from Your Research.

James Sanderson

are clarify, Just guide 'XX at far unit what closures embedded as in as wanted to all? that, for if growth,

Matthew Clark

we anticipate do Cheesecake now, X with Right closure Factory.

that. haven't We specified

would have included we and year middle Cheesecake. the XX that's revenue of for around in the So new the we'd have closure X outlook. And the

James Sanderson

bit for good. Flower mature some and about margin margin your just Is pretty potential the goes to a banners given brands? are North you those locations as little margins. maybe Very you on Child, reporting Italia long-term what the talk strong also can see as for text I or wanted potential more of there far provide

Matthew Clark

we talk cycle. Flower hybrid, casual between a about Factory, business basis, category, a full the and the there improving. think fast I it's XX% is regular really already, little mean Child on and Cheesecake Sure. bit but for operating on right certainly, XX% depending for still the And we're full-service I and year

continue that end. the to as remains towards environment so higher supportive, the as push And can we think long I

to very new that as Child, And like So would And to right? units, feel we Factory. similar there's mature North And Child always but were from we mature the look year, quarter. for mature, that drag think the same operate Factory, would I full Flower Cheesecake. Cheesecake Flower fourth what operate Cheesecake like, will the and so for certainly, the the is same in XX%, right? saw the going be And along feel and

consistent, pretty Jim. So

work think profiles margin of think our business And returns. I similar we target up are overall, pretty lining similarly the equivalent. and we kind models

Operator

Your with next question Silberman the Bank. Lauren line of comes from Deutsche

Lauren Silberman

then Jeff's some like 'XX to follow XXX the a on that X% cadence think, I the both you trends to XQ. the think was to of Can to it And expect lot on quarter? to, So in confirm, I on, questions. To year. us range just throughout start points of first to you're in you headwind color A noise I that quarter? be want do basis saw of up talking exiting X% the that and comps you give

Matthew Clark

So through fourth pretty steady quarter. business and was predictable the

assumed about kind that was little there little shifts. guidance, of with that of of and spot-on And bit pretty wasn't own a much lot there's I noise. blip expectations think holiday talked our true, there. It all around expected. election that eerily a was in the were those our then consistent and as we the But came a

but we similar guide, And at what think then last of yes. answer look if We're giving feel even comps, to experiencing the consistent trends the we're I would like, did you you, not we Lauren, the if inclusive be year. weather, all specific

Lauren Silberman

prior the on really impressive follow-up X-wall Cheesecake a then And Great. margins. question,

XX.X% think of in you quarter, over you Or is price? get margin level Is do guess, this about you it? are about sort XX% the high you're in X how think years. to, I room where restaurant mentioned -- I to highest end you still reinvesting to a XX% of see thinking there

Matthew Clark

that Yes. effect for given and the higher on be the to tends Keep right? a margin QX Two us things flow-through. mind seasonality in that,

more little a we have back on year. Cheesecake because for We full But for -- sales QX down come QX because So that's great bit an of and thinking of so up. to volumes it were goes annual then kind were a about -- XX% question. you we tends basis the though, the back

in good, right? range mean, or a feels I like a in good targeted. it the we're middle So spot, basis That minus we of few points, the right feels plus it's

we'll it. that So continue to monitor and watch

in to mean on from And never there's not away sort with of their ways we of margins other taken also get competitors the sizes the our I We've reinvesting. first the many menu of back training business. the guests anything up any that down certainly components of of other all place. development, that or cutting teams, do the taken portion did of our the we're

And the so of say, keeping I it same. will part is the reinvestment,

Operator

of the line from comes Stanley. question next Your Harbour with Brian Morgan

Brian Harbour

of seem very does And more it your still you of a opportunity? the Could had a bit the you of margins like had I think quite on labor looks about kind think in you the stores labor food very 'XX, this sort that is should think food those in we on as different line. of good side? like favorability year. favorability? 'XX? talk that. we I on of cost focused mean Is some XQ, Matt, just of about you do line. mean, it there favorability the How pieces on about this obviously, are

Matthew Clark

Yes, Brian, great question.

give of in bit of Just room for is both a some I think color do those. to everybody here, little there

think, consistent call. is continues the said be last the news And great what on predictable to we I business consistent. is again, this with and the

on bit. room as and COGS we'll I basis although points mean quite to I there's both But a So not captured I do some XX right? labor, XX we that think much, think see OpEx, each little a maybe a faster possibly. up gone of has other seen utilities of for But pressure in those that a the little of bit cost we've bit and year. in full

a slight So about the there. talked And of that key preopening OpEx. on are we offset certainly, other the components costs maybe other then, the kind

on any continued I improve one continues in we benefits benign, given be retention momentum market the broad into seen that the any derail this on that. should line basket. it lap of and our other the eggs, to to isn't of we've huge of pieces. flash as commodities, those watching of year, of And But going But January around regardless even labor everybody mean think, fairly outside I the of for to, point piece we're that's course. a some

Brian Harbour

impairment the sense. what was the to FRC Okay, on And quickly, makes Other segment? could just comment you for related

Matthew Clark

for street out and didn't was was did actually culinary have question this a happen. we here, and Atlanta kind development market in on X a impair. we Jim's did have restaurants just that Yes, one closed closures, XX we there close drop me in It basically of Ari that did, on reminded the that like where to

And to of positivity. areas wanted so to on other focus continue the we

was there, was like that -- Brian. XX% right everything So of the that

Operator

with Rahul question next Kro JPMorgan. line Your from of comes the

Rahul Krotthapalli

kind box? margin on profile think mature seems fast there, average wanted boxes lot the Child. out than dig there I what more opportunity the would XX%. a time? at the be over a What for of be Because I more the format, the in a Flower to target fully And you little would casual to volumes potential looking

Slide at looking also I'm XX. And

when from potential. growth You don't of revenue lot a seem AUV to here the I model look at

the to can curious how any how like I'm and And helpful. comments improve, on will ratio this. you you guys think sales-to-investment So be also today, about

Matthew Clark

out we about upside model there think, Sure, conservative super I you're performance Rahul. growth, with AUV Good are potential happy just And the we Flower right, of like certainly, didn't that. And to we're there. said, questions. And associated Child. be

this of are no capacity $X I overshoot We the early have again, units So in excess stage. reason to But the in there's that significant there's, doing right? million, system in think potential build-out.

right? We ready feel XX%. great the give to about that to $X.X margins AUV, we about a we're X,XXX dollar think the sort casual, think They million are say, a $X.X But casuals answer. relative don't at when continue mature fast X,XXX to, square and about the of fast I think significant accelerate. of being very, million we're that in as or of do feet, to you coming comparing AUV, the returns a definitive contribution lot out is very

doing little a of and mean moat, competitive nobody a think play, bit that's unique I is we it's what there. the right? doing we're So

can the it super-excited first just become. sort and grow accretive we're we can of this bring that salvo that think I think business that the magnitude And So of the brand. we about the returns it as is

Rahul Krotthapalli

off-premise Do mix you the this brand? mind for like sharing

Matthew Clark

XX-XX, about roughly It's speaking. Sure.

standard much off-premise; if fast much off-premise. we're on-premise, So full-service, unique, XX% because you're if higher it's we think that's about XX% incredibly standard it's a lower off-premise. Again, right, casual,

doing don't doing Child business the And really anybody think is that Flower so today. way the we it we're a

Operator

with Our Brian Raymond final James. question Vaccaro from comes today

Brian Vaccaro

wanted you unit common that threads recently. mentioned just Are Italia. some North brand openings in on new strong you'd are highlight those And the for there one quick one squeeze very there to there volumes? driving higher any I

David Gordon

busiest in the Well, factories. at our were great have Cerritos If in we one Cheesecake markets. we was in look California, where they Brian, certainly busiest here one, out of

in one Another was Henderson.

presence we in they where are good currently a with have So North. markets

there's not part sales. mentioned see now certainly necessarily we X the go was we have into, in only Nevada, that So awareness, earlier, because That when benefit situation, we as infill of QX. in Matt but an when those heightened

Brian Vaccaro

is margin margins the mean to XX.X%. just to mature you'd gear And improvement, to to also going higher starting I X%. what the sort especially Quite that your a a in specifically? the about store were stores where that drove be at expect view, is bit you Okay. margins mature XX% brand forward? the the up a on nice In XX% of hit that elaborate sitting relative Could on comps little Great. --

Matthew Clark

Brian. is Matt. Yes, This

the plays Again and level. and the really occasion I right? think strong seasonality, holiday at in special Italia So well drove season certainly, volumes mature so. there's North

time. an that And would continue and basis, between mature XX% so point annual be, store we to would in anticipate this on XX% the at

up As finally. we a we've on said last pricing, as behind got commentary. the in little year, We during caught that noted

so a brand of great awareness, I just the pricing operations on it's then and and stable being fully sort think And versus combination of inflation. improving

Operator

and participation, Ladies does session, today's disconnect. now and conference may gentlemen, that that does you conclude our question-and-answer for conclude you call. Thank your and

The Cheesecake Factory Incorporated (CAKE) 19 Feb 252024 Q4 Earnings call transcript