The Cheesecake Factory Reports Results for Third Quarter of Fiscal 2022 and Provides Business Update
The Cheesecake Factory reported Q3 fiscal 2022 revenues of $784.0 million, up from $754.5 million in Q3 2021. The net loss was $2.4 million, translating to a diluted loss per share of $0.05. Adjusted net loss stood at $1.6 million or $0.03 per share. Comparable restaurant sales rose by 1.1% year-over-year. The company plans to open up to 13 new restaurants in 2022, with available liquidity of $372 million. A dividend of $0.27 per share is scheduled for November 28, 2022.
- Revenue increase from $754.5 million to $784.0 million year-over-year.
- 1.1% year-over-year increase in comparable restaurant sales.
- Plans to open up to 13 new restaurants in fiscal 2022.
- Total available liquidity of $372 million.
- Net loss of $2.4 million and diluted loss per share of $0.05.
- Higher than anticipated operating expenses, impacting profit margins.
Total revenues were
Excluding the after-tax impact of a
Comparable restaurant sales at
“Our revenue results for the third quarter were within our expected range, and sales trends across our portfolio of concepts remained solid, strengthening throughout the quarter and into the fourth quarter,” said
“While our operational performance has been solid and core cost inputs have become more stable and predictable, we continue to face a dynamic and challenging inflationary environment in some areas. As a result, our profit margins in the quarter reflected higher than anticipated operating expenses particularly in utilities and building maintenance. However, we remain highly focused on returning restaurant margins to pre-pandemic levels in the near-term supported by appropriate pricing actions to offset the higher costs while also managing the business for the long-term including increasing market share.”
Development
During the third quarter of fiscal 2022, we opened
The Company now expects to open as many as 13 new restaurants in fiscal 2022, including as many as three
In addition, in fiscal 2022 the Company expects one
Liquidity and Capital Allocation
As of
The Company repurchased approximately 889,000 shares of its common stock at a cost of
Conference Call and Webcast
The Company will hold a conference call to review its results for the third quarter of fiscal 2022 today at
About
From Fortune ©2022
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 sales trends and strength, returning to pre-pandemic margins, pricing actions to offset higher costs, increasing market share, development expectations, liquidity, the quarterly dividend and the Company’s share repurchase program. 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: the rapidly evolving nature of the COVID-19 pandemic and related containment measures, including the potential for a complete shutdown of the Company’s restaurants, international licensee restaurants and the Company’s bakery operations; supply chain disruptions and inflation; the geopolitical environment; 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; economic, public health and political conditions that impact consumer confidence and spending, including the impact of COVID-19 and other health epidemics or pandemics on the global economy; acceptance and success of
Condensed Consolidated Financial Statements | |||||||||||||||||||||||||||
(unaudited; in thousands, except per share and statistical data) | |||||||||||||||||||||||||||
Consolidated Statements of (Loss)/Income | 13 Weeks Ended |
13 Weeks Ended |
39 Weeks Ended |
13 Weeks Ended |
|||||||||||||||||||||||
Amount |
Percent of Revenues |
Amount |
Percent of Revenues |
Amount |
Percent of Revenues |
Amount |
Percent of Revenues |
||||||||||||||||||||
Revenues | $ |
784,001 |
|
|
100.0 |
% |
$ |
754,474 |
|
|
100.0 |
% |
$ |
2,410,354 |
|
100.0 |
% |
$ |
2,150,847 |
|
100.0 |
% |
|||||
Costs and expenses: | |||||||||||||||||||||||||||
Cost of sales |
|
197,774 |
|
|
25.2 |
% |
|
169,418 |
|
|
22.5 |
% |
|
590,457 |
|
24.5 |
% |
|
474,237 |
|
22.0 |
% |
|||||
Labor expenses |
|
293,040 |
|
|
37.4 |
% |
|
279,957 |
|
|
37.1 |
% |
|
893,322 |
|
37.1 |
% |
|
784,501 |
|
36.5 |
% |
|||||
Other operating costs and expenses |
|
217,009 |
|
|
27.7 |
% |
|
201,490 |
|
|
26.7 |
% |
|
643,844 |
|
26.7 |
% |
|
582,518 |
|
27.1 |
% |
|||||
General and administrative expenses |
|
50,324 |
|
|
6.4 |
% |
|
45,802 |
|
|
6.1 |
% |
|
149,638 |
|
6.2 |
% |
|
138,457 |
|
6.4 |
% |
|||||
Depreciation and amortization expenses |
|
22,651 |
|
|
2.9 |
% |
|
22,576 |
|
|
3.0 |
% |
|
66,764 |
|
2.8 |
% |
|
66,805 |
|
3.1 |
% |
|||||
Impairment of assets and lease termination expenses |
|
- |
|
|
0.0 |
% |
|
- |
|
|
0.0 |
% |
|
313 |
|
0.0 |
% |
|
594 |
|
0.0 |
% |
|||||
Acquisition-related contingent consideration, compensation and amortization expenses |
|
1,081 |
|
|
0.1 |
% |
|
685 |
|
|
0.1 |
% |
|
2,920 |
|
0.1 |
% |
|
12,592 |
|
0.6 |
% |
|||||
Preopening costs |
|
4,327 |
|
|
0.6 |
% |
|
3,169 |
|
|
0.4 |
% |
|
9,038 |
|
0.4 |
% |
|
9,804 |
|
0.5 |
% |
|||||
Total costs and expenses |
|
786,206 |
|
|
100.3 |
% |
|
723,097 |
|
|
95.9 |
% |
|
2,356,296 |
|
97.8 |
% |
|
2,069,508 |
|
96.2 |
% |
|||||
(Loss)/ income from operations |
|
(2,205 |
) |
|
(0.3 |
)% |
|
31,377 |
|
|
4.1 |
% |
|
54,058 |
|
2.2 |
% |
|
81,339 |
|
3.8 |
% |
|||||
Interest and other expense, net |
|
(1,315 |
) |
|
(0.1 |
)% |
|
(1,794 |
) |
|
(0.2 |
)% |
|
(3,906 |
) |
(0.1 |
)% |
|
(9,194 |
) |
(0.4 |
)% |
|||||
(Loss)/ income before income taxes |
|
(3,520 |
) |
|
(0.4 |
)% |
|
29,583 |
|
|
3.9 |
% |
|
50,152 |
|
2.1 |
% |
|
72,145 |
|
3.4 |
% |
|||||
Income tax (benefit)/ provision |
|
(1,122 |
) |
|
(0.1 |
)% |
|
(3,097 |
) |
|
(0.4 |
)% |
|
3,731 |
|
0.2 |
% |
|
1,882 |
|
0.1 |
% |
|||||
Net (loss)/income |
|
(2,398 |
) |
|
-0.3 |
% |
|
32,680 |
|
|
4.3 |
% |
|
46,421 |
|
1.9 |
% |
|
70,263 |
|
3.3 |
% |
|||||
Dividends on Series A preferred stock (1) |
|
- |
|
|
0.0 |
% |
|
- |
|
|
0.0 |
% |
|
- |
|
0.0 |
% |
|
(18,661 |
) |
(0.9 |
)% |
|||||
Undistributed earnings allocated to Series A preferred stock |
|
- |
|
|
0.0 |
% |
|
- |
|
|
0.0 |
% |
|
- |
|
0.0 |
% |
|
(5,804 |
) |
(0.3 |
)% |
|||||
Net (loss)/ income available to common stockholders | $ |
(2,398 |
) |
|
-0.3 |
% |
$ |
32,680 |
|
|
4.3 |
% |
$ |
46,421 |
|
1.9 |
% |
$ |
45,798 |
|
2.1 |
% |
|||||
Basic net (loss)/ income per common share | $ |
(0.05 |
) |
$ |
0.65 |
|
$ |
0.93 |
|
$ |
0.98 |
|
|||||||||||||||
Basic weighted average shares outstanding |
|
49,653 |
|
|
50,212 |
|
|
50,124 |
|
|
46,624 |
|
|||||||||||||||
Diluted net (loss)/ income per common share (2) | $ |
(0.05 |
) |
$ |
0.64 |
|
$ |
0.92 |
|
$ |
0.96 |
|
|||||||||||||||
Diluted weighted average shares outstanding |
|
49,653 |
|
|
51,113 |
|
|
50,708 |
|
|
47,675 |
|
|||||||||||||||
(1) During the second quarter of fiscal 2021, the Company completed the repurchase of 150,000 shares of its previously outstanding convertible preferred stock and the conversion of the remaining 50,000 shares of convertible preferred stock into approximately 2.4 million shares of the Company’s common stock, which simplified the Company’s capital structure and eliminated future convertible preferred dividends. For GAAP accounting purposes, |
|||||||||||||||||||||||||||
(2) Diluted net (loss)/ income per common share reflects an adjustment for reallocation of undistributed earnings to preferred stock of |
13 Weeks Ended | 13 Weeks Ended | 39 Weeks Ended | 39 Weeks Ended | |||||||||||||||||
Selected Segment Information | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
$ |
602,902 |
|
$ |
592,555 |
|
$ |
1,853,576 |
|
$ |
1,698,635 |
|
|||||||||
North Italia |
|
54,113 |
|
|
44,357 |
|
|
163,108 |
|
|
120,747 |
|
||||||||
Other FRC |
|
52,193 |
|
|
44,326 |
|
|
171,045 |
|
|
127,978 |
|
||||||||
Other |
|
74,793 |
|
|
73,236 |
|
|
222,625 |
|
|
203,487 |
|
||||||||
Total | $ |
784,001 |
|
$ |
754,474 |
|
$ |
2,410,354 |
|
$ |
2,150,847 |
|
||||||||
(Loss)/Income from operations: | ||||||||||||||||||||
$ |
42,122 |
|
$ |
66,791 |
|
$ |
169,893 |
|
$ |
194,470 |
|
|||||||||
North Italia |
|
1,655 |
|
|
1,962 |
|
|
10,381 |
|
|
5,320 |
|
||||||||
Other FRC |
|
4,109 |
|
|
3,403 |
|
|
18,231 |
|
|
14,565 |
|
||||||||
Other |
|
(50,091 |
) |
|
(40,779 |
) |
|
(144,447 |
) |
|
(133,016 |
) |
||||||||
Total | $ |
(2,205 |
) |
$ |
31,377 |
|
$ |
54,058 |
|
$ |
81,339 |
|
||||||||
Preopening costs: | ||||||||||||||||||||
$ |
2,757 |
|
$ |
968 |
|
$ |
5,163 |
|
$ |
3,616 |
|
|||||||||
North Italia |
|
1,341 |
|
|
1,057 |
|
|
2,755 |
|
|
3,335 |
|
||||||||
Other FRC |
|
84 |
|
|
849 |
|
|
357 |
|
|
1,948 |
|
||||||||
Other |
|
145 |
|
|
295 |
|
|
763 |
|
|
905 |
|
||||||||
Total | $ |
4,327 |
|
$ |
3,169 |
|
$ |
9,038 |
|
$ |
9,804 |
|
||||||||
Impairment of assets and lease termination expenses: | ||||||||||||||||||||
$ |
- |
|
$ |
- |
|
$ |
(59 |
) |
$ |
- |
|
|||||||||
North Italia |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||||||
Other FRC |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||||||
Other |
|
- |
|
|
- |
|
|
372 |
|
|
594 |
|
||||||||
Total | $ |
- |
|
$ |
- |
|
$ |
313 |
|
$ |
594 |
|
||||||||
Depreciation and amortization expenses: | ||||||||||||||||||||
$ |
15,874 |
|
$ |
16,414 |
|
$ |
47,736 |
|
$ |
49,221 |
|
|||||||||
North Italia |
|
1,556 |
|
|
1,068 |
|
|
4,076 |
|
|
2,893 |
|
||||||||
Other FRC |
|
1,661 |
|
|
1,208 |
|
|
4,712 |
|
|
3,423 |
|
||||||||
Other |
|
3,560 |
|
|
3,886 |
|
|
10,240 |
|
|
11,268 |
|
||||||||
Total | $ |
22,651 |
|
$ |
22,576 |
|
$ |
66,764 |
|
$ |
66,805 |
|
||||||||
13 Weeks Ended |
13 Weeks Ended |
39 Weeks Ended |
39 Weeks Ended |
|||||||||||||||||
|
|
|
|
|||||||||||||||||
Comparable restaurant sales vs. prior year | 1.1 |
% |
41.1 |
% |
8.2 |
% |
48.0 |
% |
||||||||||||
Comparable restaurant sales vs. 2019 | 9.5 |
% |
8.3 |
% |
10.2 |
% |
1.9 |
% |
||||||||||||
Restaurants opened during period | 1 |
|
- |
|
1 |
|
1 |
|
||||||||||||
Restaurants open at period-end | 209 |
|
207 |
|
209 |
|
207 |
|
||||||||||||
Restaurant operating weeks | 2,705 |
|
2,689 |
|
8,113 |
|
8,058 |
|
||||||||||||
North Italia operating information: | ||||||||||||||||||||
Comparable restaurant sales vs. prior year | 10 |
% |
38 |
% |
17 |
% |
53 |
% |
||||||||||||
Comparable restaurant sales vs. 2019 | 18 |
% |
8 |
% |
21 |
% |
5 |
% |
||||||||||||
Restaurants opened during period | 1 |
|
2 |
|
2 |
|
5 |
|
||||||||||||
Restaurants open at period-end | 31 |
|
28 |
|
31 |
|
28 |
|
||||||||||||
Restaurant operating weeks | 395 |
|
349 |
|
1,150 |
|
980 |
|
||||||||||||
Other |
||||||||||||||||||||
Restaurants opened during period | 1 |
|
1 |
|
1 |
|
2 |
|
||||||||||||
Restaurants open at period-end | 32 |
|
29 |
|
32 |
|
29 |
|
||||||||||||
Restaurant operating weeks | 413 |
|
371 |
|
1,219 |
|
1,067 |
|
||||||||||||
Other operating information:(2) | ||||||||||||||||||||
Restaurants opened during period | - |
|
1 |
|
1 |
|
2 |
|
||||||||||||
Restaurants open at period-end | 39 |
|
40 |
|
39 |
|
40 |
|
||||||||||||
Restaurant operating weeks | 507 |
|
507 |
|
1,514 |
|
1,474 |
|
||||||||||||
Number of company-owned restaurants: | ||||||||||||||||||||
209 |
|
|||||||||||||||||||
North Italia | 31 |
|
||||||||||||||||||
Other FRC | 32 |
|
||||||||||||||||||
Other | 39 |
|
||||||||||||||||||
Total | 311 |
|
||||||||||||||||||
Number of international-licensed restaurants: | ||||||||||||||||||||
29 |
|
|||||||||||||||||||
(1) The Other FRC segment includes all FRC brands except |
||||||||||||||||||||
(2) The Other segment includes the Flower Child, |
Selected Consolidated Balance Sheet Information | ||||||||||||||
Cash and cash equivalents | $ |
133,157 |
$ |
189,627 |
||||||||||
Long-term debt, net of issuance costs (1) |
|
467,528 |
|
466,017 |
||||||||||
(1) Includes |
Reconciliation of Non-GAAP Results to GAAP Results
In addition to the results provided in accordance with accounting principles generally accepted in
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 | |||||||||||||||||
Net (loss)/income available to common stockholders (GAAP) | $ |
(2,398 |
) |
$ |
32,680 |
|
$ |
46,421 |
|
$ |
45,798 |
|
||||||||
Dividends on Series A preferred stock |
|
- |
|
|
- |
|
|
- |
|
|
18,661 |
|
||||||||
Net income attributable to Series A preferred stock |
|
- |
|
|
- |
|
|
- |
|
|
5,804 |
|
||||||||
COVID-19 related costs(1) |
|
- |
|
|
- |
|
|
- |
|
|
4,917 |
|
||||||||
Impairment of assets and lease termination expenses(2) |
|
- |
|
|
- |
|
|
313 |
|
|
594 |
|
||||||||
Acquisition-related contingent consideration, compensation and amortization expenses(3) |
|
1,081 |
|
|
685 |
|
|
2,920 |
|
|
12,592 |
|
||||||||
Termination of interest rate swap |
|
- |
|
|
- |
|
|
- |
|
|
2,354 |
|
||||||||
Uncertain tax position(4) |
|
- |
|
|
- |
|
|
- |
|
|
2,471 |
|
||||||||
Tax effect of adjustments(5) |
|
(281 |
) |
|
(178 |
) |
|
(840 |
) |
|
(5,318 |
) |
||||||||
Adjusted net (loss)/income (non-GAAP) | $ |
(1,598 |
) |
$ |
33,187 |
|
$ |
48,814 |
|
$ |
87,873 |
|
||||||||
Diluted net (loss)/income per common share (GAAP) | $ |
(0.05 |
) |
$ |
0.64 |
|
$ |
0.92 |
|
$ |
0.96 |
|
||||||||
Dividends on Series A preferred stock |
|
- |
|
|
- |
|
|
- |
|
|
0.35 |
|
||||||||
Net Income attributable to Series A preferred stock |
|
- |
|
|
- |
|
|
- |
|
|
0.11 |
|
||||||||
Assumed impact of potential conversion of Series A preferred stock into common stock(6) |
|
- |
|
|
- |
|
|
- |
|
|
(0.11 |
) |
||||||||
COVID-19 related costs |
|
- |
|
|
- |
|
|
- |
|
|
0.09 |
|
||||||||
Impairment of assets and lease termination expenses |
|
- |
|
|
- |
|
|
0.01 |
|
|
0.01 |
|
||||||||
Acquisition-related contingent consideration, compensation and amortization expenses |
|
0.02 |
|
|
0.01 |
|
|
0.06 |
|
|
0.23 |
|
||||||||
Termination of interest rate swap |
|
- |
|
|
- |
|
|
- |
|
|
0.04 |
|
||||||||
Uncertain tax position |
|
- |
|
|
- |
|
|
- |
|
|
0.05 |
|
||||||||
Tax effect of adjustments |
|
(0.01 |
) |
|
(0.00 |
) |
|
(0.02 |
) |
|
(0.10 |
) |
||||||||
Adjusted net (loss)/income per share (non-GAAP)(7) | $ |
(0.03 |
) |
$ |
0.65 |
|
$ |
0.96 |
|
$ |
1.64 |
|
||||||||
(1) Represents incremental costs associated with COVID-19 such as sanitation, personal protective equipment, sick and vaccination pay, and healthcare benefits for furloughed staff members. | ||||||||||||||||||||
(2) A detailed breakdown of impairment of assets and lease termination expenses recorded in the thirteen and thirty-nine weeks ended |
||||||||||||||||||||
(3) 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. | ||||||||||||||||||||
(4) Reserve for uncertain tax position. Uncertain tax positions taken in a tax return are recognized in the financial statements when it is more likely than not that the position will be sustained upon examination by tax authorities based on its technical merits, taking into account available administrative remedies and litigation. | ||||||||||||||||||||
(5) Based on the federal statutory rate and an estimated blended state tax rate, the tax effect on all adjustments assumes a |
||||||||||||||||||||
(6) Represents the impact of assuming the conversion of Series A preferred stock into common stock (0 and 5,908,187 shares for the thirteen and thirty-nine weeks ended |
||||||||||||||||||||
(7) Adjusted net (loss)/income per share may not add due to rounding. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221101005387/en/
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FAQ
What were The Cheesecake Factory's earnings for Q3 fiscal 2022?
What is the net loss reported by The Cheesecake Factory in Q3 fiscal 2022?
How did comparable restaurant sales perform in Q3 fiscal 2022 for CAKE?
What are The Cheesecake Factory's plans for new restaurant openings in 2022?