• Total Revenue (Q4 2024): $921 million.
• Total Revenue (Fiscal Year 2024): $3.58 billion.
• Adjusted Net Income Margin (Q4 2024): 5.6%.
• Adjusted Earnings Per Share (Fiscal Year 2024): $3.44, a 28% year-over-year increase.
• Adjusted EBITDAR (Fiscal Year 2024): $329 million.
• Cheesecake Factory Comparable Sales (Q4 2024): Increased 1.7% from the prior year.
• Cheesecake Factory Restaurant-Level Margins (Q4 2024): 18.4%.
• North Italia Sales (Q4 2024): $81.3 million, up 21% from the prior year.
• North Italia Comparable Sales (Q4 2024): Increased 1% from the prior year.
• Flower Child Comparable Sales (Q4 2024): Increased 11% from the prior year.
• Other FRC Sales (Q4 2024): $85.1 million, up 20% from the prior year.
• External Bakery Sales (Q4 2024): $17.1 million.
• GAAP Diluted Net Income Per Share (Q4 2024): $0.83.
• Adjusted Diluted Net Income Per Share (Q4 2024): $1.04.
• Total Available Liquidity (End of Q4 2024): Approximately $341 million.
• Total Debt Outstanding (End of Q4 2024): $455 million.
• Capital Expenditures (Q4 2024): Approximately $40 million.
• Share Repurchases (Q4 2024): Approximately $0.5 million.
• Dividends Returned to Shareholders (Q4 2024): $13.2 million.

• Warning! GuruFocus has detected 6 Warning Sign with CAKE.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cheesecake Factory Inc (NASDAQ:CAKE) reported record-high annual revenues and adjusted earnings per share for 2024.
• The company opened more new restaurants in 2024 than ever before, with plans to open up to 25 new restaurants in 2025.
• Cheesecake Factory restaurant comparable sales and traffic outperformed the industry, with a 1.7% increase in comparable sales in Q4.
• The company achieved its highest restaurant-level margins in over seven years, with a Q4 margin of 18.4%.
• Flower Child's comparable sales increased by 11% in Q4, significantly outpacing the industry index.

Negative Points

• Cheesecake Factory Inc (NASDAQ:CAKE) experienced a negative mix impact on sales, particularly in the alcohol category.
• The company anticipates a $7 million sales impact in Q1 2025 due to inclement weather.
• There is a noted pressure on other operating expenses, including increased utility costs.
• The company recorded a pre-tax net expense of $14.4 million in Q4, primarily related to impairment of assets and lease termination expenses.
• Despite strong performance, the company is cautious about margin expansion in 2025 due to increased pre-opening costs and new unit inefficiencies.

Q & A Highlights

Q: What factors contributed to the increase in revenue guidance from $3.75 billion to $3.8 billion for 2025? A: Matthew Clark, CFO, explained that the increase is due to higher unit growth, with one more restaurant opened last year than initially guided and an additional one planned for this year. The timing of openings, with 15 restaurants in the first half of the year, also contributes to more operating weeks, driving the revenue increase. The comp assumptions remain consistent with last year's performance.

Q: Can you explain the margin performance in the fourth quarter and the factors driving it? A: Matthew Clark, CFO, highlighted that strong sales and improved retention were key drivers. The sales exceeded guidance, leading to great flow-through, particularly at Flower Child and Cheesecake Factory. Improved retention contributed significantly to labor productivity, enhancing margins across the portfolio.

Q: How is the Cheesecake Rewards program performing, and are there plans to expand it to other brands? A: David Gordon, President, stated that the Cheesecake Rewards program is exceeding internal expectations with high member acquisition and guest satisfaction scores. The focus is on increasing enrollment and driving frequency without expanding the program to other brands. The program remains unique to Cheesecake Factory, emphasizing experiential rewards over points-based systems.

Q: What is the outlook for North Italia and Flower Child's growth, and how is the company managing the rapid expansion? A: David Gordon, President, expressed confidence in managing the 20% unit growth rate for North Italia and Flower Child. The company has been developing management talent and infrastructure to support this growth. The strong opening teams and real estate planning ensure that targets are met, with most North Italia units located near existing Cheesecake Factory locations, leveraging market familiarity.

Q: How does the company view the current consumer environment, and is there any impact on sales trends? A: Matthew Clark, CFO, noted that despite discussions of an anxious consumer, Cheesecake Factory's sales trends remain consistent and resilient. The brand's unique value proposition and experience continue to attract customers, and the company has not observed significant changes in consumer behavior beyond weather-related impacts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.