The Cheesecake Factory Incorporated (NASDAQ: CAKE) today
reported financial results for the fourth quarter of fiscal 2016,
which ended on January 3, 2017.
Total revenues were $603.1 million in the fourth quarter of
fiscal 2016 as compared to $526.8 million in the fourth quarter of
fiscal 2015. The fourth quarter of fiscal 2016 included 14 weeks
compared to 13 weeks in the fourth quarter of fiscal 2015; the
additional week in fiscal 2016 contributed approximately $54.7
million of sales. Net income and diluted net income per share were
$32.4 million and $0.66, respectively, in the fourth quarter of
fiscal 2016.
The Company recorded a pre-tax, non-cash charge of $0.1 million
during the fourth quarter of fiscal 2016 related to the planned
relocation of one The Cheesecake Factory restaurant. Excluding this
item, net income and diluted net income per share were $32.4
million and $0.67, respectively.
Comparable restaurant sales at The Cheesecake Factory
restaurants increased 1.1% in the fourth quarter of fiscal 2016 (14
weeks vs. 14 weeks).
“We delivered our 28th consecutive quarter of positive
comparable sales, marking seven years of strong financial
performance and meaningful shareholder value creation,” said David
Overton, Chairman and Chief Executive Officer. “We significantly
outperformed the casual dining industry again during the fourth
quarter as we continued to take market share.”
Overton concluded, “We delivered on all of our objectives in
2016, including producing solid comparable sales performance,
achieving our domestic unit growth goal, expanding our
international presence to a total of 15 locations and increasing
operating margins, all of which contributed to approximately 20%
earnings per share growth. By maintaining our differentiated
positioning and commitment to operational excellence, we believe we
will uphold our leadership position in the casual dining industry
in 2017 and beyond.”
Development
The Company opened five The Cheesecake Factory restaurants and
one Grand Lux Cafe during the fourth quarter of fiscal 2016,
meeting its objective to open as many as eight Company-owned
restaurants domestically in fiscal 2016.
Internationally, two The Cheesecake Factory restaurants opened
in the fourth quarter of fiscal 2016, including the first location
in Qatar and the third location in Mexico, for a total of four
locations opened under licensing agreements during the year, as
expected.
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 March 21, 2017 to shareholders of record at
the close of business on March 8, 2017.
During the fourth quarter of fiscal 2016, the Company
repurchased 0.5 million shares of its common stock at a cost of
$27.5 million. The Company repurchased a total of 2.9 million
shares of its common stock at a cost of $146.5 million during
fiscal 2016.
The Company continues to expect that it will return its free
cash flow to shareholders in fiscal 2017 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 fourth 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 March 24, 2017.
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
208 full-service, casual dining restaurants throughout the U.S.A.
and Puerto Rico, including 194 restaurants under The Cheesecake
Factory® mark; 13 restaurants under the Grand Lux Cafe® mark; and
one restaurant under the Rock Sugar Pan Asian Kitchen® mark
(rebranding to RockSugar Southeast Asian Kitchen™).
Internationally, 15 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 support the growth of
North Italia and Flower Child restaurants; the Company’s ability to
develop a fast casual concept; 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)
14 Weeks
Ended 13 Weeks Ended 53 Weeks Ended 52 Weeks
Ended Consolidated Statement of Operations January 3,
2017 December 29, 2015 January 3, 2017
December 29, 2015 Amount Percent of
Revenues
Amount Percent of
Revenues
Amount Percent of
Revenues
Amount Percent of
Revenues
Revenues $ 603,146 100.0 % $ 526,841 100.0 % $ 2,275,719 100.0 % $
2,100,609 100.0 % Costs and expenses: Cost of sales 140,084 23.2 %
125,191 23.8 % 526,628 23.2 % 504,031 24.0 % Labor expenses 202,562
33.6 % 173,053 32.8 % 759,998 33.4 % 684,818 32.6 % Other operating
costs and expenses 143,951 23.9 % 125,103 23.7 % 540,365 23.7 %
500,640 23.8 % General and administrative expenses 38,863 6.4 %
35,705 6.8 % 146,042 6.4 % 137,402 6.5 % Depreciation and
amortization expenses 23,451 3.9 % 21,911 4.2 % 88,010 3.9 % 85,563
4.1 % Impairment of assets and lease terminations 114 0.0 % - 0.0 %
114 0.0 % 6,011 0.3 % Preopening costs 6,975
1.2 % 7,083 1.3 % 13,569 0.6 %
16,898 0.8 % Total costs and expenses 556,000
92.2 % 488,046 92.6 %
2,074,726 91.2 % 1,935,363 92.1 % Income from
operations 47,146 7.8 % 38,795 7.4 % 200,993 8.8 % 165,246 7.9 %
Interest and other expense, net (2,263 ) (0.4 )%
(1,845 ) (0.4 )% (9,225 ) (0.4 )%
(5,894 ) (0.3 )% Income before income taxes 44,883 7.4 % 36,950 7.0
% 191,768 8.4 % 159,352 7.6 % Income tax provision 12,502
2.0 % 9,750 1.8 % 52,274
2.3 % 42,829 2.1 % Net income $ 32,381
5.4 % $ 27,200 5.2 % $ 139,494 6.1 % $
116,523 5.5 % Basic net income per share $ 0.68
$ 0.56 $ 2.91 $ 2.39 Basic weighted
average shares outstanding 47,403 48,808
47,981 48,833 Diluted net
income per share $ 0.66 $ 0.54 $ 2.83 $ 2.30
Diluted weighted average shares outstanding 48,795
50,470 49,372 50,605
Selected Segment Information Revenues: The
Cheesecake Factory restaurants $ 547,809 $ 476,580 $ 2,078,083 $
1,913,758 Other 55,337 50,261
197,636 186,851 $ 603,146 $ 526,841
$ 2,275,719 $ 2,100,609 Income from
operations: The Cheesecake Factory restaurants $ 74,673 $ 64,220 $
308,058 $ 275,686 Other (1) 8,189 7,446 27,623 18,047 Corporate
(35,716 ) (32,871 ) (134,688 ) (128,487
) $ 47,146 $ 38,795 $ 200,993 $ 165,246
(1) Includes $0.1 million of accelerated depreciation
expense related to the planned relocation of one The Cheesecake
Factory restaurant in the fourteen and fifty-three weeks ended
January 3, 2017 and $6.0 million of impairment expense related to
Rock Sugar Pan Asian Kitchen in the fifty-two weeks ended December
29, 2015.
Selected Consolidated Balance Sheet
Information January 3, 2017 December 29, 2015
Cash and cash equivalents $ 53,839 $ 43,854 Total assets 1,293,319
1,233,346 Total liabilities 690,112 644,807 Stockholders' equity
603,207 588,539
14 Weeks Ended 13 Weeks
Ended 53 Weeks Ended 52 Weeks Ended The
Cheesecake Factory Supplemental Information January 3,
2017 December 29, 2015 January 3, 2017
December 29, 2015 Comparable restaurant sales 1.1 % 1.1 %
1.2 % 2.6 % Restaurants opened during period 5 6 7 10 Restaurants
open at period-end 194 187 194 187 Restaurant operating weeks 2,690
2,394 10,031 9,341
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)
14 Weeks Ended
13 Weeks Ended 53 Weeks Ended 52 Weeks Ended
January 3, 2017 December 29, 2015 January 3,
2017 December 29, 2015 Net Income (GAAP) $ 32,381
$ 27,200 $ 139,494 $ 116,523 After-tax impact from: - Impairment of
assets and lease terminations (1) 68 -
68 3,607 Net Income (non-GAAP) $
32,449 $ 27,200 $ 139,562 $ 120,130
Diluted net income per share (GAAP) $ 0.66 $ 0.54 $ 2.83 $ 2.30
After-tax impact from: - Impairment of assets and lease
terminations 0.00 - 0.00
0.07 Diluted net income per share (non-GAAP) (2)
$ 0.67 $ 0.54 $ 2.83 $ 2.37 (1)
The pre-tax amount associated with these items in fiscal 2016 and
2015 were $114 and $6,011, and were recorded in impairment of
assets and lease terminations. (2) Adjusted diluted net income per
share may not add due to rounding.
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version on businesswire.com: http://www.businesswire.com/news/home/20170222006286/en/
The Cheesecake Factory IncorporatedStacy Feit,
818-871-3000investorrelations@thecheesecakefactory.com
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