CALABASAS HILLS, Calif.--(BUSINESS WIRE)--Nov. 1, 2017--
The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported
financial results for the third quarter of fiscal 2017, which ended on
October 3, 2017.
Total revenues were $555.4 million in the third quarter of fiscal 2017
as compared to $560.0 million in the third quarter of fiscal 2016. Net
income and diluted net income per share were $26.4 million and $0.56,
respectively, in the third quarter of fiscal 2017.
Comparable restaurant sales at The Cheesecake Factory restaurants
declined 2.3% in the third quarter of fiscal 2017, including an
approximately 0.8% negative impact from Hurricanes Harvey, Irma and
Maria. Excluding this weather impact, comparable restaurant sales
declined 1.5%.
“While our third quarter results were impacted by significant hurricane
activity, we are so fortunate that our staff members are safe and our
restaurants did not sustain any significant damage from the storms,”
said David Overton, Chairman and Chief Executive Officer. “I am
extremely proud of our teams for coming together to provide relief in
every way we could. From uninterrupted payroll in spite of lost
operating days and company matching of donations via the California
Community Foundation Cheesecake Factory employee HELP Fund, to much
needed meals for first responders and emergency supplies shipped
directly to our hardest hit area in San Juan, Puerto Rico, we truly
lived our purpose of nurturing bodies, minds, hearts and spirits.”
Overton continued, “Excluding the significant weather impact to the
quarter, our sales and earnings results were in line with our
expectations. As we look forward, we are continuing to invest in the
guest experience, which we believe is contributing to stabilization of
our underlying sales trend. At the same time, we are focused on diligent
cost management to support profitability as we manage through the
current industry environment, as well as prudent capital allocation to
generate the best returns for our shareholders.”
Development
The Company continues to expect to open eight Company-owned restaurants
this year. The Cheesecake Factory in Kapolei, Hawaii opened in September
and The Cheesecake Factory in Minnetonka, Minnesota opened in
mid-October. The Company expects to open five additional restaurants
during the fourth quarter.
In addition, the Company continues to expect four restaurants to open
under licensing agreements internationally in fiscal 2017. This includes
the second location in Qatar that opened in September, the first
location in Bahrain that opened at the end of October and the third
location in Qatar, which is expected to open by year-end.
Capital Allocation
The Company’s Board of Directors declared a quarterly cash dividend of
$0.29 per share on the Company’s common stock. The dividend is payable
on November 28, 2017 to shareholders of record at the close of business
on November 15, 2017.
During the third quarter of fiscal 2017, the Company repurchased
approximately 1.6 million shares of its common stock at a cost of $75.8
million. The Company now expects to allocate a total of $125 to $150
million toward share repurchases in fiscal 2017.
Conference Call and Webcast
The Company will hold a conference call to review its results for the
third quarter of fiscal 2017 today at 2:00 p.m. Pacific Time. The
conference call will be webcast live on the Company’s website at investors.thecheesecakefactory.com
and a replay of the webcast will be available through November 30, 2017.
About The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated created the upscale casual dining
segment in 1978 with the introduction of its namesake concept. The
Company, through its subsidiaries, owns and operates 209 full-service,
casual dining restaurants throughout the U.S.A., including Puerto Rico,
comprised of 195 restaurants under The Cheesecake Factory®
mark; 13 restaurants under the Grand Lux Cafe® mark; and one
restaurant under the Rock Sugar Pan Asian Kitchen® mark
(rebranding to RockSugar Southeast Asian Kitchen®).
Internationally, 18 The Cheesecake Factory® restaurants
operate under licensing agreements. The Company’s bakery division
operates two bakery production facilities, in Calabasas Hills, CA and
Rocky Mount, NC, that produce quality cheesecakes and other baked
products for its restaurants, international licensees and third-party
bakery customers. In 2017, the Company was named to the FORTUNE Magazine
“100 Best Companies to Work For®” list for the fourth
consecutive year. To learn more about the Company, visit www.thecheesecakefactory.com.
FORTUNE and FORTUNE 100 Best Companies to Work For® are registered
trademarks of Time Inc. and are used under license. From FORTUNE
Magazine, March 15, 2017 ©2017 Time Inc. Used under license. FORTUNE and
Time Inc. 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. These
statements involve known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or achievements
of the Company to be materially different from any future results,
performance or achievements expressed or implied by forward-looking
statements, including uncertainties related to the Company’s ability to:
deliver consistent and dependable comparable sales results over a
sustained period of time; provide a differentiated experience to guests;
outperform the casual dining industry and increase its market share;
leverage sales increases and manage flow through; stabilize margins;
grow earnings; remain relevant to consumers; attract and retain
qualified management and other staff; increase shareholder value;
profitably expand its concepts domestically and in Canada, and work with
its licensees to expand its concept internationally; support the growth
of North Italia and Flower Child restaurants; develop a fast casual
concept; expand consumer packaged goods licensing revenue; utilize its
capital effectively and continue to increase cash dividends and
repurchase its shares; and factors outside of the Company’s control
including: economic and political conditions that impact consumer
confidence and spending; acceptance and success of The Cheesecake
Factory in international markets; the risks of doing business abroad
through Company-owned restaurants and/or licensees; foreign exchange
rates and potential changes in NAFTA and cross border taxation; changes
in unemployment rates; the economic health of the Company’s landlords
and other tenants in retail centers in which its restaurants are
located; the economic health of suppliers, licensees, vendors and other
third parties providing goods or services to the Company; 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; and other risks and uncertainties
detailed from time to time in the Company’s filings with the Securities
and Exchange Commission (“SEC”). Investors are cautioned that
forward-looking statements are not guarantees of future performance and
that undue reliance should not be placed on such statements.
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 securities laws.
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.
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The Cheesecake Factory Incorporated
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Condensed Consolidated Financial Statements
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(unaudited; in thousands, except per share and statistical data)
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13 Weeks Ended
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13 Weeks Ended
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39 Weeks Ended
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39 Weeks Ended
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Consolidated Statement of Income
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October 3, 2017
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September 27, 2016
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October 3, 2017
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September 27, 2016
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Amount
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Percent of
Revenues
|
|
Amount
|
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Percent of
Revenues
|
|
Amount
|
|
Percent of
Revenues
|
|
Amount
|
|
Percent of
Revenues
|
|
Revenues
|
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$
|
555,392
|
|
|
|
100.0
|
%
|
|
$
|
560,018
|
|
|
|
100.0
|
%
|
|
$
|
1,688,687
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|
|
100.0
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%
|
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$
|
1,672,573
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100.0
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%
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Costs and expenses:
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Cost of sales
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127,453
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22.9
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%
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|
128,838
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|
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23.0
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%
|
|
|
385,373
|
|
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22.8
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%
|
|
|
386,544
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|
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23.1
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%
|
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Labor expenses
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|
193,466
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|
|
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34.9
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%
|
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|
186,567
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33.3
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%
|
|
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580,364
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|
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34.4
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%
|
|
|
557,436
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|
|
33.3
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%
|
|
Other operating costs and expenses
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138,423
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24.9
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%
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134,877
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|
|
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24.1
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%
|
|
|
411,534
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|
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24.4
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%
|
|
|
396,414
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|
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23.7
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%
|
|
General and administrative expenses
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|
35,364
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|
|
|
6.4
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%
|
|
|
36,057
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|
|
|
6.4
|
%
|
|
|
106,946
|
|
|
6.3
|
%
|
|
|
107,179
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|
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6.4
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%
|
|
Depreciation and amortization expenses
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22,999
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|
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4.1
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%
|
|
|
21,634
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3.9
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%
|
|
|
69,492
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|
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4.1
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%
|
|
|
64,559
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|
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3.9
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%
|
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Impairment of assets and lease terminations
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-
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0.0
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%
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-
|
|
|
|
0.0
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%
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|
|
1,231
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|
|
0.1
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%
|
|
|
-
|
|
|
0.0
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%
|
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Preopening costs
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3,370
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|
|
0.6
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%
|
|
|
1,982
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|
|
|
0.4
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%
|
|
|
5,649
|
|
|
0.3
|
%
|
|
|
6,594
|
|
|
0.4
|
%
|
|
Total costs and expenses
|
|
|
521,075
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|
|
|
93.8
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%
|
|
|
509,955
|
|
|
|
91.1
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%
|
|
|
1,560,589
|
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|
92.4
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%
|
|
|
1,518,726
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|
|
90.8
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%
|
|
Income from operations
|
|
|
34,317
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|
|
|
6.2
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%
|
|
|
50,063
|
|
|
|
8.9
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%
|
|
|
128,098
|
|
|
7.6
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%
|
|
|
153,847
|
|
|
9.2
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%
|
|
Interest and other expense, net
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|
(1,600
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)
|
|
|
(0.3
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)%
|
|
|
(2,477
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)
|
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|
(0.4
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)%
|
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|
(4,426
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)
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(0.3
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)%
|
|
|
(6,962
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)
|
|
(0.4
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)%
|
|
Income before income taxes
|
|
|
32,717
|
|
|
|
5.9
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%
|
|
|
47,586
|
|
|
|
8.5
|
%
|
|
|
123,672
|
|
|
7.3
|
%
|
|
|
146,885
|
|
|
8.8
|
%
|
|
Income tax provision
|
|
|
6,272
|
|
|
|
1.1
|
%
|
|
|
13,012
|
|
|
|
2.3
|
%
|
|
|
24,018
|
|
|
1.4
|
%
|
|
|
39,772
|
|
|
2.4
|
%
|
|
Net income
|
|
$
|
26,445
|
|
|
|
4.8
|
%
|
|
$
|
34,574
|
|
|
|
6.2
|
%
|
|
$
|
99,654
|
|
|
5.9
|
%
|
|
$
|
107,113
|
|
|
6.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic net income per share
|
|
$
|
0.57
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|
|
|
|
$
|
0.72
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|
|
|
|
$
|
2.11
|
|
|
|
|
$
|
2.22
|
|
|
|
|
Basic weighted average shares outstanding
|
|
|
46,602
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|
|
|
|
|
47,815
|
|
|
|
|
|
47,323
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|
|
|
|
|
48,188
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|
|
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|
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|
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|
Diluted net income per share
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$
|
0.56
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|
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$
|
0.70
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|
|
|
$
|
2.05
|
|
|
|
|
$
|
2.16
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
47,519
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|
|
|
|
|
49,212
|
|
|
|
|
|
48,582
|
|
|
|
|
|
49,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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Selected Segment Information
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Cheesecake Factory restaurants
|
|
$
|
507,572
|
|
|
|
|
$
|
512,040
|
|
|
|
|
$
|
1,543,034
|
|
|
|
|
$
|
1,530,274
|
|
|
|
|
Other
|
|
|
47,820
|
|
|
|
|
|
47,978
|
|
|
|
|
|
145,653
|
|
|
|
|
|
142,299
|
|
|
|
|
Total
|
|
$
|
555,392
|
|
|
|
|
$
|
560,018
|
|
|
|
|
$
|
1,688,687
|
|
|
|
|
$
|
1,672,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Cheesecake Factory restaurants (1) |
|
$
|
60,496
|
|
|
|
|
$
|
76,808
|
|
|
|
|
$
|
207,028
|
|
|
|
|
$
|
233,385
|
|
|
|
|
Other
|
|
|
6,003
|
|
|
|
|
|
6,753
|
|
|
|
|
|
18,932
|
|
|
|
|
|
19,434
|
|
|
|
|
Corporate
|
|
|
(32,182
|
)
|
|
|
|
|
(33,498
|
)
|
|
|
|
|
(97,862
|
)
|
|
|
|
|
(98,972
|
)
|
|
|
|
Total
|
|
$
|
34,317
|
|
|
|
|
$
|
50,063
|
|
|
|
|
$
|
128,098
|
|
|
|
|
$
|
153,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(1) Includes $1.2 million in the thirty nine weeks ended October 3,
2017, of accelerated depreciation and impairment expense related to
the relocation of one The Cheesecake Factory restaurant and the
lease termination of one The Cheesecake Factory restaurant. This
amount was recorded in impairment of assets and lease terminations
in the condensed consolidated statements of income.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Consolidated Balance Sheet Information
|
|
October 3, 2017
|
|
January 3, 2017
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
19,795
|
|
|
|
|
$
|
53,839
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
1,275,328
|
|
|
|
|
|
1,293,319
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
691,969
|
|
|
|
|
|
690,112
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
583,359
|
|
|
|
|
|
603,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
|
39 Weeks Ended
|
|
The Cheesecake Factory Supplemental Information
|
|
October 3, 2017
|
|
September 27, 2016
|
|
October 3, 2017
|
|
September 27, 2016
|
|
Comparable restaurant sales
|
|
|
|
|
-2.3
|
%
|
|
|
|
|
1.7
|
%
|
|
|
|
-0.8
|
%
|
|
|
|
1.2
|
%
|
|
Restaurants opened during period
|
|
|
|
|
1
|
|
|
|
|
|
-
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
Restaurants open at period-end
|
|
|
|
|
194
|
|
|
|
|
|
189
|
|
|
|
|
194
|
|
|
|
|
189
|
|
|
Restaurant operating weeks
|
|
|
|
|
2,511
|
|
|
|
|
|
2,457
|
|
|
|
|
7,550
|
|
|
|
|
7,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Results to GAAP Results
In addition to the results provided in accordance with Generally
Accepted Accounting Principles (“GAAP”) in this press release, the
Company is providing non-GAAP measurements which present net income and
diluted 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. The Company
believes that the presentation of these items provides additional
information to facilitate the comparison of past and present financial
results.
|
|
|
The Cheesecake Factory Incorporated
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
(unaudited; in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
|
39 Weeks Ended
|
|
|
|
October 3, 2017
|
|
September 27, 2016
|
|
October 3, 2017
|
|
September 27, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (GAAP)
|
|
|
$
|
26,445
|
|
|
$
|
34,574
|
|
|
$
|
99,654
|
|
|
$
|
107,113
|
|
After-tax impact from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Impairment of assets and lease terminations (1) |
|
|
|
-
|
|
|
|
-
|
|
|
|
739
|
|
|
|
-
|
|
Adjusted net income (non-GAAP)
|
|
|
$
|
26,445
|
|
|
$
|
34,574
|
|
|
$
|
100,393
|
|
|
$
|
107,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share (GAAP)
|
|
|
$
|
0.56
|
|
|
$
|
0.70
|
|
|
$
|
2.05
|
|
|
$
|
2.16
|
|
After-tax impact from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Impairment of assets and lease terminations
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.02
|
|
|
|
-
|
|
Adjusted diluted net income per share (non-GAAP)
|
|
|
$
|
0.56
|
|
|
$
|
0.70
|
|
|
$
|
2.07
|
|
|
$
|
2.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The pre-tax amount associated with the item in the thirty nine
weeks ended October 3, 2017 was $1.2 million, and was recorded in
impairment of assets and lease terminations.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171101006457/en/
Source: The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated
Stacy Feit
(818) 871-3000
investorrelations@thecheesecakefactory.com