The Cheesecake Factory (CAKE) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues reached $904 million, up 4.4% year-over-year, finishing at the higher end of guidance and driven by new restaurant openings and higher comparable sales.

• Adjusted EPS rose 24% year-over-year to $1.09, with net income at $52.4 million and strong operational execution leading to improved labor productivity and staff retention.

• Comparable sales at core restaurants rose 1.4%, outperforming the casual dining industry and achieving record-high average weekly sales and consolidated revenues.

• Five new restaurants opened in Q2 and 11 year-to-date, with plans for up to 22 new openings in 2024 across multiple concepts and markets.

• Recognized for best-in-class operational execution, industry-leading staff retention, and named to Fortune's "100 Best Companies to Work For" for the eleventh consecutive year.

Financial highlights

• Q2 2024 total revenue: $904M, up from $866.2M in Q2 2023; adjusted net income margin was 5.9%, and adjusted EPS was $1.09.

• Net income: $52.4M, up from $42.7M year-over-year; operating income: $58.7M, up from $47.5M.

• Cost of sales improved by 90 bps, labor as a percent of sales improved by 20 bps, G&A decreased by 40 bps, and depreciation increased by 10 bps YoY.

• Cash and equivalents at quarter-end: $40.7M; available liquidity: $277M; total debt: $475M.

• Average unit volumes: Cheesecake Factory $12.5M, North Italia $7.9M, FRC $7.0M (annualized Q2 2024).

Outlook and guidance

• Full-year 2024 revenue projected at $3.56B–$3.60B, with net income margin of 4.3%–4.4%; Q3 revenue expected between $855M–$870M, with net income margin of 2.6%–3%.

• Up to 22 new restaurant openings planned in 2024, including 3 Cheesecake Factory, 6-7 North Italia, 6-7 Flower Child, and 7-8 FRC units.

• CapEx for 2024 projected at $180M–$200M to support new unit development and maintenance.

• Effective commodity inflation modeled at low single digits for Q3; labor inflation at mid-single digits.