The Cheesecake Factory (CAKE) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues reached $904 million, up 4.4% year-over-year, with profitability and adjusted EPS ($1.09) growing 24% year-over-year, marking the third consecutive quarter of 20%+ growth.

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

• Operational excellence drove improvements in food efficiency, labor productivity, and staff retention, resulting in the highest four-wall margin (17.7%) in six years.

• Eleven new restaurants opened year-to-date, with five in Q2 and strong demand across new locations; up to 22 new openings planned for 2024.

• Recognized for best-in-class execution, industry-leading staff retention, and high consumer engagement, with a strong off-premise channel and international expansion.

Financial highlights

• Q2 2024 total revenues were $904 million, up from $866.2 million in Q2 2023; Cheesecake Factory sales at $676.7 million (up 3.7%), North Italia at $75.5 million (up 14.6%), FRC at $73.6 million (up 12%), and Flower Child at $35.7 million (up 6.6%).

• Adjusted net income margin was 5.9%, exceeding guidance; GAAP diluted EPS was $1.08, and adjusted diluted EPS was $1.09.

• Cost of sales improved by 90 bps, labor as a percent of sales improved by 20 bps, and G&A decreased by 40 bps year-over-year; food and beverage costs were 22.3% of revenue, labor 35.1%.

• Total available liquidity at quarter-end was $277 million, with $41 million in cash and $237 million available on a revolving credit facility; total debt remained at $475 million.

• $17.7 million was returned to shareholders via dividends and stock repurchases in Q2.

Outlook and guidance

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

• Up to 22 new restaurants are planned for 2024, including 3 Cheesecake Factories, 6–7 North Italias, 6–7 Flower Child, and 7–8 FRC restaurants.

• CapEx for 2024 is anticipated at $180–$200 million to support new unit development and maintenance.

• Effective commodity inflation is expected in the low single digits for Q3, with labor inflation in the mid-single digits.

• Q3 2024 dividend set at $0.27 per share; share repurchases to offset dilution and support EPS.