The Cheesecake Factory Incorporated (NASDAQ: CAKE) today
reported financial results for the third quarter of fiscal 2016,
which ended on September 27, 2016.
Total revenues were $560.0 million in the third quarter of
fiscal 2016 as compared to $526.7 million in the third quarter of
fiscal 2015. Net income and diluted net income per share were $34.6
million and $0.70, respectively, in the third quarter of fiscal
2016.
Comparable restaurant sales at The Cheesecake Factory
restaurants increased 1.7% in the third quarter of fiscal 2016.
“We delivered our 27th consecutive quarter of positive
comparable sales as we continue to create unique dining experiences
for our guests, supporting consistent and predictable performance,”
said David Overton, Chairman and Chief Executive Officer. “We
meaningfully outpaced the casual dining industry during the third
quarter, underscoring our differentiated positioning as we remain a
destination of choice in a competitive landscape.”
Overton concluded, “Sales leverage and effective cost management
drove solid year-over-year operating margin expansion and earnings
growth. We are executing at a high level operationally, positioning
us well for a strong finish to 2016 and as we look ahead to
2017.”
Development
The Company continues to expect to open as many as eight
Company-owned restaurants domestically in fiscal 2016. Subsequent
to quarter-end, three restaurants opened in October and the Company
expects to open three additional restaurants during the remainder
of the fourth quarter.
Internationally, the Company now expects as many as four
restaurants to open under licensing agreements in fiscal 2016,
including The Cheesecake Factory at Dubai Festival City Mall that
opened in August.
Capital Allocation
The Company’s Board of Directors declared a quarterly cash
dividend of $0.24 per share on the Company’s common stock. The
dividend is payable on November 22, 2016 to shareholders of record
at the close of business on November 9, 2016.
During the third quarter of fiscal 2016, the Company repurchased
0.8 million shares of its common stock at a cost of $42.4 million.
Year-to-date, the Company has repurchased 2.4 million shares of its
common stock at a cost of $119.0 million. The Company continues to
expect that it will return its free cash flow to shareholders in
fiscal 2016 in the form of dividends and share repurchases.
Conference Call and Webcast
The Company will hold a conference call to review its results
for the third quarter of fiscal 2016 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 25, 2016.
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
205 full-service, casual dining restaurants throughout the U.S.A.
and Puerto Rico, including 192 restaurants under The Cheesecake
Factory® mark; 12 restaurants under the Grand Lux Cafe® mark; and
one restaurant under the RockSugar Pan Asian Kitchen® mark.
Internationally, 13 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 2016, the Company was named to the
FORTUNE Magazine “100 Best Companies to Work For®” list for the
third consecutive year. To learn more about the Company, visit
www.thecheesecakefactory.com.
FORTUNE and 100 Best Companies to Work For® are registered
trademarks of Time Inc. and are used under license. From FORTUNE
Magazine, March 3, 2016 ©2016 Time Inc. 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; the Company’s ability to deliver increases in guest
traffic; the strength of the Company’s brand; the Company’s ability
to provide a differentiated experience to guests; the Company’s
ability to outperform the casual dining industry and increase its
market share; the Company’s ability to leverage sales increases and
manage flow through; the Company’s ability to increase margins; the
Company’s ability to grow earnings; the Company’s ability to remain
relevant to consumers; the Company’s ability to increase
shareholder value; the Company’s ability to expand its concepts
domestically and work with its licensees to expand its concept
internationally; the Company’s ability to utilize its capital
effectively and continue to repurchase its shares; factors outside
of the Company’s control that impact consumer confidence and
spending; current and future macroeconomic conditions; acceptance
and success of The Cheesecake Factory in international markets;
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.
The Cheesecake Factory Incorporated and
Subsidiaries Condensed Consolidated Financial Statements
(unaudited; in thousands, except per share and statistical
data)
13 Weeks Ended 13 Weeks Ended 39 Weeks
Ended 39 Weeks Ended Consolidated Statement of
Operations September 27, 2016 September 29, 2015
September 27, 2016 September 29, 2015 Amount
Percent of
Revenues
Amount Percent of
Revenues
Amount Percent of
Revenues
Amount Percent of
Revenues
Revenues $ 560,018 100.0 % $ 526,688 100.0 % $ 1,672,573 100.0 % $
1,573,768 100.0 % Costs and expenses: Cost of sales 128,838 23.0 %
125,605 23.9 % 386,544 23.1 % 378,840 24.1 % Labor expenses 186,567
33.3 % 172,101 32.7 % 557,436 33.3 % 511,765 32.5 % Other operating
costs and expenses 134,877 24.1 % 128,427 24.4 % 396,414 23.7 %
375,537 23.9 % General and administrative expenses 36,057 6.4 %
33,277 6.3 % 107,179 6.4 % 101,697 6.5 % Depreciation and
amortization expenses 21,634 3.9 % 21,317 4.0 % 64,559 3.9 % 63,652
4.0 % Impairment of assets and lease expiration - 0.0 % 6,011 1.1 %
- 0.0 % 6,011 0.4 % Preopening costs 1,982
0.4 % 4,306 0.8 % 6,594
0.4 % 9,815 0.6 % Total costs and
expenses 509,955 91.1 % 491,044
93.2 % 1,518,726 90.8 %
1,447,317 92.0 % Income from operations 50,063
8.9 % 35,644 6.8 % 153,847 9.2 % 126,451 8.0 % Interest and other
(expense)/income, net (2,477 ) (0.4 )%
(722 ) (0.2 )% (6,962 ) (0.4 )%
(4,049 ) (0.2 )% Income before income taxes 47,586 8.5 %
34,922 6.6 % 146,885 8.8 % 122,402 7.8 % Income tax provision
13,012 2.3 % 8,746
1.6 % 39,772 2.4 % 33,079
2.1 % Net income $ 34,574 6.2 % $
26,176 5.0 % $ 107,113 6.4 % $
89,323 5.7 % Basic net income per share $ 0.72
$ 0.54 $ 2.22 $ 1.83 Basic weighted
average shares outstanding 47,815 48,848
48,188 48,841 Diluted net
income per share $ 0.70 $ 0.52 $ 2.16 $ 1.76
Diluted weighted average shares outstanding 49,212
50,637 49,604 50,660
Selected Segment Information Revenues: The
Cheesecake Factory restaurants $ 512,040 $ 481,076 $ 1,530,274 $
1,437,178 Other 47,978 45,612
142,299 136,590 $ 560,018 $ 526,688
$ 1,672,573 $ 1,573,768 Income from
operations: The Cheesecake Factory restaurants $ 76,808 $ 67,473 $
233,385 $ 211,466 Other (1) 6,753 (725 ) 19,434 10,601 Corporate
(33,498 ) (31,104 ) (98,972 ) (95,616 )
$ 50,063 $ 35,644 $ 153,847 $ 126,451
(1) Includes $6.0 million of impairment expense related to
RockSugar Pan Asian Kitchen in the thirteen and thirty-nine weeks
ended September 29, 2015.
Selected Consolidated
Balance Sheet Information September 27, 2016 December
29, 2015 Cash and cash equivalents $ 65,845 $ 43,854 Total
assets 1,204,379 1,233,346 Total liabilities 614,848 644,807
Stockholders' equity 589,531 588,539
13
Weeks Ended 13 Weeks Ended 39 Weeks Ended 39
Weeks Ended The Cheesecake Factory Supplemental
Information September 27, 2016 September 29, 2015
September 27, 2016 September 29, 2015 Comparable
restaurant sales 1.7 % 2.2 % 1.2 % 3.0 % Restaurants opened during
period - 2 2 4 Restaurants open at period-end 189 181 189 181
Restaurant operating weeks 2,457 2,336 7,341 6,946
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 and Subsidiaries 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 September
27, 2016 September 29, 2015 September 27, 2016
September 29, 2015 Net Income (GAAP) $ 34,574 $
26,176 $ 107,113 $ 89,323 After-tax impact from: - Impairment of
assets and lease terminations (1) -
3,607 - 3,607 Net Income (non-GAAP)
$ 34,574 $ 29,783 $ 107,113 $ 92,930
Diluted net income per share (GAAP) $ 0.70 $ 0.52 $ 2.16 $
1.76 After-tax impact from: - Impairment of assets and lease
terminations - 0.07 -
0.07 Diluted net income per share (non-GAAP) $ 0.70
$ 0.59 $ 2.16 $ 1.83 (1) The pre-tax
amount associated with the item in fiscal 2015 was $6.0 million.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161026006386/en/
The Cheesecake Factory IncorporatedStacy Feit,
818-871-3000investorrelations@thecheesecakefactory.com
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