The Cheesecake Factory Reports Results for Fourth Quarter of Fiscal 2024

Rhea-AI Summary

The Cheesecake Factory (NASDAQ: CAKE) reported strong Q4 2024 financial results with total revenues of $921.0 million, up from $877.0 million in Q4 2023. Net income reached $41.2 million with diluted EPS of $0.83. Adjusted for impairment and lease expenses, net income was $51.8 million with adjusted EPS of $1.04.

Comparable restaurant sales increased 1.7% year-over-year. The company opened nine new restaurants in Q4, including three North Italia locations, two Flower Child locations, and two FRC restaurants. For fiscal 2025, they plan to open up to 25 new restaurants.

The company maintains strong liquidity of $340.7 million, including $84.2 million in cash. They repurchased 11,800 shares at $0.5 million in Q4 and declared a quarterly dividend of $0.27 per share, payable March 18, 2025.

Positive

• Revenue increased to $921.0M from $877.0M YoY
• Comparable restaurant sales grew 1.7% YoY
• Successful expansion with 23 new restaurant openings in 2024
• Strong liquidity position of $340.7M
• Quarterly dividend maintained at $0.27 per share

Negative

• Pre-tax expense of $14.4M for asset impairment and lease termination
• Total debt of $455M including $345M in convertible notes

Insights

Financial Analyst

The Cheesecake Factory's Q4 2024 results reveal a company executing effectively on multiple fronts. Total revenues of $921.0 million represent a 5% year-over-year growth, while the 1.7% comparable sales increase demonstrates the brand's resilience in a challenging casual dining environment. The adjusted EPS of $1.04 reflects improved operational efficiency and successful cost management.

The company's multi-brand growth strategy is particularly noteworthy. The aggressive expansion plan of 23 new restaurants in 2024, followed by up to 25 new locations in 2025, spans across various concepts including North Italia, Flower Child, and other FRC restaurants. This diversification reduces single-brand risk while targeting different market segments and price points.

From a balance sheet perspective, the $340.7 million in available liquidity provides adequate flexibility for expansion plans. However, the $345 million convertible notes due in 2026 warrant attention, as their maturity coincides with a period of aggressive expansion. The modest share repurchase of 11,800 shares suggests management is prioritizing operational investment over shareholder returns, though the maintained quarterly dividend of $0.27 indicates confidence in sustainable cash flow generation.

The company's market share gains and outperformance versus the broader casual dining industry validate its premium positioning and operational execution. The continued investment in new restaurant openings, despite industry headwinds, demonstrates management's confidence in the company's differentiated dining concepts and their ability to attract consumers seeking experiential dining options.

CALABASAS HILLS, Calif.--(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 December 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/

Etienne Marcus

(818) 871-3000

investorrelations@thecheesecakefactory.com

Source: The Cheesecake Factory Incorporated

FAQ

What was The Cheesecake Factory's (CAKE) revenue in Q4 2024?

The Cheesecake Factory reported total revenues of $921.0 million in Q4 2024, compared to $877.0 million in Q4 2023.

How many new restaurants did CAKE open in Q4 2024?

The company opened nine new restaurants in Q4 2024, including three North Italia locations, two Flower Child locations, two FRC restaurants, and two relocated Cheesecake Factory restaurants.

What is CAKE's expansion plan for fiscal 2025?

The company plans to open up to 25 new restaurants in fiscal 2025, including 3-4 Cheesecake Factory restaurants, 6-7 North Italia locations, 6-7 Flower Child locations, and 8-9 FRC restaurants.

What was CAKE's comparable restaurant sales growth in Q4 2024?

The Cheesecake Factory restaurants reported a 1.7% increase in comparable restaurant sales year-over-year in Q4 2024.

What is the amount of CAKE's quarterly dividend for March 2025?

The company declared a quarterly dividend of $0.27 per share, payable on March 18, 2025, to shareholders of record as of March 5, 2025.