The Cheesecake Factory (CAKE) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenues reached $927.2 million, up 4% year-over-year, driven by new restaurant openings and higher comparable sales, with adjusted EPS up 27% and strong margin expansion.

• Eight new restaurants opened in Q1, with plans for up to 25 new units in 2025, including international expansion under licensing agreements.

• The company operates 358 restaurants across the US, Canada, and 33 international licensed locations, with a diversified portfolio including The Cheesecake Factory, North Italia, Flower Child, and Fox Restaurant Concepts.

• Recognized on Fortune's '100 Best Companies to Work For' list for the 12th consecutive year, highlighting strong culture and retention.

• Share repurchases totaled 2.6 million shares for $141.4 million, including 2.4 million shares repurchased with proceeds from new convertible notes.

Financial highlights

• Q1 total revenues reached $927 million, near the high end of guidance, with adjusted net income margin at 4.9% and adjusted diluted EPS at $0.93.

• Operating income increased to $52.0 million from $39.3 million year-over-year; adjusted EBITDA was $88 million, up 16% year-over-year.

• Cheesecake Factory restaurant sales were $673 million (+1% YoY), North Italia $83.4 million (+18% YoY), Flower Child $43.5 million (+26% YoY), and other FRC sales $87.4 million (+18% YoY).

• Food and beverage costs improved to 21.8% of revenues, and labor expenses decreased to 35.7% of revenues year-over-year.

• Cash and cash equivalents stood at $135.4 million as of April 1, 2025, with total available liquidity of $501.9 million.

Outlook and guidance

• Q2 revenue expected between $935 million and $950 million; full-year 2025 revenue projected at approximately $3.76 billion at midpoint.

• Up to 25 new restaurant openings planned for 2025, with CapEx guidance of $190–$210 million and pre-opening expenses estimated at $34 million.

• Adjusted net income margin for Q2 anticipated at 5.3%-5.4%; full-year margin expected at 4.75%.

• Comparable sales growth targeted at 1–2% and top-line revenue growth at 7–8% annually.

• Guidance reflects a prudent approach due to revised economic growth and disposable income forecasts, with comps expected to be flat to up 1%.