CAKE
$49.59
Cheesecake Fact
($.83)
(1.65%)
Earnings Details
2nd Quarter June 2016
Wednesday, July 27, 2016 4:15:04 PM
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Summary

Cheesecake Factory Raises Guidance

Cheesecake Fact (CAKE) reported 2nd Quarter June 2016 earnings of $0.78 per share on revenue of $558.9 million. The consensus earnings estimate was $0.70 per share on revenue of $563.0 million. Revenue grew 5.6% on a year-over-year basis.

The company said during its conference call it expects third quarter earnings of $0.59 to $0.62 per share and 2016 earnings of $2.70 to $2.76 per share. The company's previous guidance was for 2016 earnings of $2.61 to $2.70 per share. The current consensus earnings estimate is $0.62 per share for the quarter ending September 30, 2016 and $2.66 per share for the year ending December 31, 2016.

Cheesecake Factory Inc operates casual dining restaurants. It also operates bakery production facilities which produce desserts for its restaurants, international licenses and third-party bakery customers.

Results
Reported Earnings
$0.78
Earnings Whisper
-
Consensus Estimate
$0.70
Reported Revenue
$558.9 Mil
Revenue Estimate
$563.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

The Cheesecake Factory Reports Results for Second Quarter of Fiscal 2016

The Cheesecake Factory Incorporated (CAKE) today reported financial results for the second quarter of fiscal 2016, which ended on June 28, 2016.

Total revenues were $558.9 million in the second quarter of fiscal 2016 as compared to $529.1 million in the second quarter of fiscal 2015. Net income and diluted net income per share were $38.6 million and $0.78, respectively, in the second quarter of fiscal 2016.

Comparable restaurant sales at The Cheesecake Factory restaurants increased 0.3% in the second quarter of fiscal 2016.

"We again outperformed the casual dining industry, delivering our 26th consecutive quarter of positive comparable sales," said David Overton, Chairman and Chief Executive Officer. "Capturing operational efficiencies, coupled with a benign commodity cost environment, enabled us to offset industry wage inflation and drive strong margins and earnings growth during the quarter. In addition, we achieved a significant milestone in our international expansion with the opening of the first The Cheesecake Factory restaurant in China, at Disneytown in the Shanghai Disney Resort, under a licensing agreement."

Overton concluded, "Underscoring our confidence in our industry-leading position and future prospects, we are both expanding our share repurchase authorization and meaningfully increasing our quarterly dividend. We will have doubled the amount of our dividend since first initiating one in fiscal 2012, with this increase. We remain committed to investing in returns-focused growth and returning capital to achieve our targeted returns and increase shareholder value."

Development

The Company continues to expect to open as many as eight Company-owned restaurants domestically in fiscal 2016, the second of which opened in Greenville, South Carolina in the second quarter.

Internationally, the Company continues to expect as many as four to five restaurants to open under licensing agreements in fiscal 2016, including the first The Cheesecake Factory restaurant that opened in China in June 2016.

Capital Allocation

The Company’s Board of Directors declared a quarterly cash dividend of $0.24 per share on the Company’s common stock, representing a 20% increase. The dividend is payable on August 23, 2016 to shareholders of record at the close of business on August 10, 2016.

During the second quarter of fiscal 2016, the Company repurchased 0.5 million shares of its common stock at a cost of $26.6 million. Year-to-date, the Company repurchased 1.6 million shares of its common stock at a cost of $76.6 million. In addition, the Company’s Board of Directors increased its share repurchase authorization by 7.5 million shares to 56.0 million shares. 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 second 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 August 27, 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 202 full-service, casual dining restaurants throughout the U.S.A. and Puerto Rico, including 189 restaurants under The Cheesecake Factory(R) mark; 12 restaurants under the Grand Lux Cafe(R) mark; and one restaurant under the RockSugar Pan Asian Kitchen(R) mark. Internationally, 12 The Cheesecake Factory(R) 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(R)" list for the third consecutive year. To learn more about the Company, visit www.thecheesecakefactory.com.

FORTUNE and 100 Best Companies to Work For(R) are registered trademarks of Time Inc. and are used under license. From FORTUNE Magazine, March 3, 2016 (C)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
26 Weeks Ended
26 Weeks Ended
Consolidated Statement of Operations
June 28, 2016
June 30, 2015
June 28, 2016
June 30, 2015
Amount
Percent of
Amount
Percent of
Amount
Percent of
Amount
Percent of
Revenues
Revenues
Revenues
Revenues
Revenues
$ 558,862
100.0 %
$ 529,107
100.0 %
$ 1,112,555
100.0 %
$ 1,047,080
100.0 %
Costs and expenses:
Cost of sales
126,933
22.7 %
126,623
23.9 %
257,706
23.2 %
253,235
24.2 %
Labor expenses
185,211
33.2 %
168,495
31.8 %
370,869
33.3 %
339,664
32.5 %
Other operating costs and expenses
131,980
23.6 %
123,675
23.4 %
261,537
23.5 %
247,110
23.6 %
General and administrative expenses
35,785
6.4 %
35,345
6.7 %
71,122
6.4 %
68,420
6.5 %
Depreciation and amortization expenses
21,461
3.8 %
21,158
4.0 %
42,925
3.9 %
42,335
4.0 %
Preopening costs
2,302
0.4 %
4,058
0.8 %
4,612
0.4 %
5,509
0.5 %
Total costs and expenses
503,672
90.1 %
479,354
90.6 %
1,008,771
90.7 %
956,273
91.3 %
Income from operations
55,190
9.9 %
49,753
9.4 %
103,784
9.3 %
90,807
8.7 %
Interest and other (expense)/income, net
(2,181 )
(0.4 )%
(1,432 )
(0.3 )%
(4,485 )
(0.4 )%
(3,327 )
(0.3 )%
Income before income taxes
53,009
9.5 %
48,321
9.1 %
99,299
8.9 %
87,480
8.4 %
Income tax provision
14,424
2.6 %
13,597
2.5 %
26,760
2.4 %
24,333
2.4 %
Net income
$
38,585
6.9 %
$
34,724
6.6 %
$
72,539
6.5 %
$
63,147
6.0 %
Basic net income per share
$
0.80
$
0.72
$
1.50
$
1.29
Basic weighted average shares outstanding
48,232
48,451
48,375
48,838
Diluted net income per share
$
0.78
$
0.69
$
1.46
$
1.25
Diluted weighted average shares outstanding
49,598
50,262
49,814
50,681
Selected Segment Information
Revenues:
The Cheesecake Factory restaurants
$ 511,918
$ 483,285
$ 1,018,234
$
956,102
Other
46,944
45,822
94,321
90,978
$ 558,862
$ 529,107
$ 1,112,555
$ 1,047,080
Income from operations:
The Cheesecake Factory restaurants
$
82,285
$
77,292
$
156,577
$
143,993
Other
5,769
5,263
12,681
11,326
Corporate
(32,864 )
(32,802 )
(65,474 )
(64,512 )
$
55,190
$
49,753
$
103,784
$
90,807
Selected Consolidated Balance Sheet Information
June 28, 2016
December 29, 2015
Cash and cash equivalents
$
79,618
$
43,854
Total assets
1,204,318
1,233,346
Total liabilities
607,476
644,807
Stockholders’ equity
596,842
588,539
13 Weeks Ended
13 Weeks Ended
26 Weeks Ended
26 Weeks Ended
The Cheesecake Factory Supplemental Information
June 28, 2016
June 30, 2015
June 28, 2016
June 30, 2015
Comparable restaurant sales
0.3 %
2.8 %
1.0 %
3.5 %
Restaurants opened during period
1
2
2
2
Restaurants open at period-end
189
179
189
179
Restaurant operating weeks
2,448
2,309
4,884
4,610

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SOURCE: The Cheesecake Factory Incorporated

The Cheesecake Factory Incorporated
Stacy Feit
(818) 871-3000
investorrelations@thecheesecakefactory.com