Cheesecake Factory (CAKE) came out with quarterly earnings of $0.80 per share, beating the Zacks Consensus Estimate of $0.74 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 8.11%. A quarter ago, it was expected that this restaurant chain would post earnings of $0.42 per share when it actually produced earnings of $0.39, delivering a surprise of -7.14%.Over the last four quarters, t ...

Core Insights - The Cheesecake Factory reported total revenues of $877.0 million for Q4 fiscal 2023, a decrease from $892.8 million in Q4 fiscal 2022, but a 7.7% increase when adjusted for the additional week in the prior year [1][2] - The company achieved a net income of $12.7 million, translating to a diluted net income per share of $0.26 for the fourth quarter [1][2] - Comparable restaurant sales increased by 2.5% year-over-year and 14.0% compared to Q4 fiscal 2019 [2][3] Financial Performance - Total revenues for the fiscal year reached $3.44 billion, up from $3.30 billion in the previous year [1][11] - Adjusted net income for Q4 fiscal 2023 was $39.0 million, with an adjusted net income per share of $0.80 [2][15] - The company recorded a pre-tax net expense of $35.6 million related to asset impairment and lease termination [2][15] Operational Highlights - The Cheesecake Factory opened nine new restaurants in Q4, including three under the North Italia and Fox Restaurant Concepts brands, and two internationally in Thailand and China [3][4] - The company demonstrated strong operational execution, improving labor productivity and food efficiency, which contributed to profitability [3][4] - The company had total available liquidity of $292.8 million as of January 2, 2024, with a cash balance of $56.3 million [5][14] Market Position - The Cheesecake Factory's comparable sales growth outperformed the broader casual dining industry, indicating strong brand resilience [3][4] - The company plans to leverage its competitive strengths to drive profitable growth and shareholder value [3][4] - The Cheesecake Factory was recognized in the FORTUNE Magazine "100 Best Companies to Work For" list for the tenth consecutive year [7]

The Cheesecake Factory Incorporated (CAKE) is scheduled to report fourth-quarter fiscal 2023 results on Feb 21, after market close. In the previous quarter, the company’s earnings and revenues missed the Zacks Consensus Estimate by 7.1% and 1.4%, respectively. However, the metrics improved on a year-over-year basis.How are Estimates Placed?For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained unchanged at 74 cents in the past 60 days. The estimated figure indicates ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) The company reported a strong Q4 fiscal 2023, achieving record annual revenue and solid earnings growth driven by comparable sales and operational improvements [Q4 2023 Financial Highlights](index=1&type=section&id=Q4%202023%20Financial%20Highlights) The company reported strong Q4 fiscal 2023 results with $877.0 million in revenues, 7.7% growth excluding an extra week, and adjusted EPS of $0.80 Q4 Fiscal 2023 Financial Performance | Metric | Q4 Fiscal 2023 (13 Weeks) | Q4 Fiscal 2022 (14 Weeks) | | :-------------------------------------- | :------------------------ | :------------------------ | | Total Revenues | $877.0 million | $892.8 million | | Net Income (GAAP) | $12.7 million | | | Diluted Net Income per Share (GAAP) | $0.26 | | | Pre-tax Net Expense (Adjustments) | $35.6 million | | | Adjusted Net Income (Non-GAAP) | $39.0 million | | | Adjusted Diluted Net Income per Share (Non-GAAP) | $0.80 | | - Excluding the impact of an additional week in fiscal 2022 (approximately $78.4 million in sales), total revenues for Q4 fiscal 2023 increased **7.7%** over the prior year period[1](index=1&type=chunk) - Comparable restaurant sales at The Cheesecake Factory restaurants increased **2.5%** year-over-year in Q4 fiscal 2023 and increased **14.0%** relative to Q4 fiscal 2019, on an operating week basis[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO David Overton highlighted strong Q4 performance, record annual revenue, and market outperformance driven by operational execution and unit growth - Q4 results marked a strong finish to the year, with positive comparable sales growth and margin expansion contributing to **record annual revenue** and **solid earnings growth**[3](index=3&type=chunk) - Comparable sales and traffic at The Cheesecake Factory restaurants **outperformed** the broader casual dining industry in Q4, demonstrating brand strength and market share capture[3](index=3&type=chunk) - **Operational execution improvements** were seen in labor productivity, food efficiency, wage management, and hourly staff and manager retention, driving profitability[3](index=3&type=chunk) - **Nine new restaurants** opened during the quarter, along with two international Cheesecake Factory locations under licensing agreements, including the first in Thailand[3](index=3&type=chunk) [Operational Highlights](index=2&type=section&id=Operational%20Highlights) The company significantly expanded its restaurant footprint and detailed its diverse brand portfolio and operational excellence [Restaurant Development](index=2&type=section&id=Restaurant%20Development) The company expanded its footprint in Q4 fiscal 2023 with nine new company-owned and two international licensed restaurant openings - During Q4 fiscal 2023, the Company opened **nine new restaurants**: 3 Cheesecake Factory, 3 North Italia, and 3 FRC restaurants[4](index=4&type=chunk) - **Two Cheesecake Factory restaurants** opened internationally under licensing agreements in China and Thailand during Q4 fiscal 2023[4](index=4&type=chunk) - Subsequent to quarter-end, one North Italia, one Flower Child, one Culinary Dropout, and one international Cheesecake Factory (Mexico) opened[4](index=4&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) The Cheesecake Factory operates 334 restaurants across multiple brands in the US and Canada, with 33 international licensed locations and a bakery division - The Company owns and operates **334 restaurants** in the U.S. and Canada under brands including The Cheesecake Factory, North Italia, Flower Child, and FRC brands[7](index=7&type=chunk) - **33** The Cheesecake Factory restaurants operate internationally under licensing agreements[7](index=7&type=chunk) - The bakery division produces cheesecakes and other baked products for restaurants, international licensees, and third-party customers[7](index=7&type=chunk) - Named to the FORTUNE Magazine '100 Best Companies to Work For' list for the **tenth consecutive year** in 2023[7](index=7&type=chunk) [Liquidity and Capital Allocation](index=2&type=section&id=Liquidity%20and%20Capital%20Allocation) The company maintained strong liquidity and managed debt, while actively returning capital to shareholders through repurchases and dividends [Current Liquidity and Debt](index=2&type=section&id=Current%20Liquidity%20and%20Debt) As of January 2, 2024, the company had $292.8 million in liquidity and $475 million in total principal debt outstanding Liquidity and Debt Position | Metric | As of January 2, 2024 | | :-------------------------------------- | :-------------------- | | Total Available Liquidity | $292.8 million | | Cash Balance | $56.3 million | | Revolving Credit Facility Availability | $236.5 million | | Total Principal Amount of Debt Outstanding | $475 million | | 0.375% Convertible Senior Notes due 2026 | $345 million | | Revolving Credit Facility Drawn | $130 million | [Share Repurchases and Dividends](index=2&type=section&id=Share%20Repurchases%20and%20Dividends) In Q4 fiscal 2023, the company repurchased $9.8 million in shares and declared a quarterly dividend of $0.27 per share - Repurchased approximately **318,400 shares** of stock at a cost of **$9.8 million** in Q4 fiscal 2023[5](index=5&type=chunk) - Declared a quarterly dividend of **$0.27 per share**, payable on March 19, 2024[5](index=5&type=chunk) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) A conference call for Q4 fiscal 2023 results was held on February 21, 2024, with a webcast replay available until March 22, 2024 - Conference call to review Q4 fiscal 2023 results held on February 21, 2024, at 2:00 p.m. Pacific Time[6](index=6&type=chunk) - Webcast available live on investors.thecheesecakefactory.com, with a replay available through March 22, 2024[6](index=6&type=chunk) [Safe Harbor Statement](index=3&type=section&id=Safe%20Harbor%20Statement) The safe harbor statement cautions investors on forward-looking statements, highlighting risks from economic conditions, supply chain, and regulatory changes - The press release contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially[9](index=9&type=chunk) - Factors affecting results include economic, public health, and political conditions, supply chain disruptions, and changes in laws[9](index=9&type=chunk) - Investors are cautioned not to place undue reliance on forward-looking statements and are referred to SEC filings for detailed risk factors[9](index=9&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's consolidated income statements, segment performance, operating metrics, and key balance sheet information [Consolidated Statements of Income/(Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Income%2F%28Loss%29) This statement details revenues, costs, and profitability for Q4 and full fiscal year 2023, including operating expenses and net income Consolidated Income Statement Highlights | Metric | 13 Weeks Ended Jan 2, 2024 | % of Revenues | 14 Weeks Ended Jan 3, 2023 | % of Revenues | 52 Weeks Ended Jan 2, 2024 | % of Revenues | 53 Weeks Ended Jan 3, 2023 | % of Revenues | | :-------------------------------------- | :------------------------- | :------------ | :------------------------- | :------------ | :------------------------- | :------------ | :------------------------- | :------------ | | Revenues | $877,009 | 100.0% | $892,802 | 100.0% | $3,439,503 | 100.0% | $3,303,156 | 100.0% | | Food and beverage cost | $201,449 | 23.0% | $220,469 | 24.7% | $803,500 | 23.4% | $810,926 | 24.6% | | Labor expenses | $308,555 | 35.2% | $318,629 | 35.7% | $1,227,895 | 35.7% | $1,211,951 | 36.7% | | Income/(loss) from operations | $8,139 | 0.9% | $(15,123) | (1.7)% | $108,566 | 3.2% | $38,935 | 1.2% | | Net income/(loss) | $12,681 | 1.4% | $(3,298) | (0.4)% | $101,351 | 2.9% | $43,123 | 1.3% | | Diluted net income/(loss) per share | $0.26 | | $(0.07) | | $2.07 | | $0.86 | | [Selected Segment Information](index=5&type=section&id=Selected%20Segment%20Information) This section breaks down revenues, operating income, and other costs across The Cheesecake Factory, North Italia, Other FRC, and Other segments Segment Revenues and Operating Income | Segment | Q4 FY23 Revenues | Q4 FY22 Revenues | FY23 Revenues | FY22 Revenues | | :------------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | The Cheesecake Factory restaurants | $658,445 | $674,467 | $2,595,066 | $2,528,043 | | North Italia | $67,224 | $65,514 | $258,878 | $228,622 | | Other FRC | $70,913 | $66,507 | $263,923 | $237,552 | | Other | $80,427 | $86,314 | $321,636 | $308,939 | | **Total** | **$877,009** | **$892,802** | **$3,439,503** | **$3,303,156** | | Segment | Q4 FY23 Op. Income | Q4 FY22 Op. Income | FY23 Op. Income | FY22 Op. Income | | :------------------------------------- | :----------------- | :----------------- | :-------------- | :-------------- | | The Cheesecake Factory restaurants | $65,363 | $50,872 | $297,063 | $220,765 | | North Italia | $3,201 | $3,553 | $18,515 | $13,934 | | Other FRC | $3,596 | $5,346 | $19,422 | $23,577 | | Other | $(64,021) | $(74,894) | $(226,434) | $(219,341) | | **Total** | **$8,139** | **$(15,123)** | **$108,566** | **$38,935** | [Operating Information by Segment](index=6&type=section&id=Operating%20Information%20by%20Segment) This section details segment-specific operating metrics, including comparable sales growth, restaurant counts, and operating weeks Segment Operating Metrics | Metric | Q4 FY23 | Q4 FY22 | FY23 | FY22 | | :-------------------------------------- | :------ | :------ | :---- | :---- | | **The Cheesecake Factory restaurants:** | | | | | | Comparable restaurant sales vs. prior year | 2.5% | 4.0% | 3.0% | 7.0% | | Restaurants open at period-end | 216 | 211 | 216 | 211 | | **North Italia:** | | | | | | Comparable restaurant sales vs. prior year | 7% | 9% | 8% | 15% | | Restaurants open at period-end | 36 | 33 | 36 | 33 | | **Other Fox Restaurant Concepts (FRC):** | | | | | | Restaurants open at period-end | 40 | 34 | 40 | 34 | | **Total Company-Owned Restaurants:** | | | | | | The Cheesecake Factory | 216 | | | | | North Italia | 36 | | | | | Other FRC | 40 | | | | | Other | 39 | | | | | **Total Company-Owned** | **331** | | | | | **Total International-Licensed** | **32** | | | | [Selected Consolidated Balance Sheet Information](index=6&type=section&id=Selected%20Consolidated%20Balance%20Sheet%20Information) This section presents key balance sheet figures, including cash and long-term debt, as of January 2, 2024, and January 3, 2023 Key Balance Sheet Figures | Metric | January 2, 2024 | January 3, 2023 | | :-------------------------------------- | :-------------- | :-------------- | | Cash and cash equivalents | $56,290 | $114,777 | | Long-term debt, net of issuance costs | $470,047 | $468,032 | - Long-term debt includes **$340.0 million** net balance of 0.375% convertible senior notes due 2026 (principal amount of **$345 million**) and **$130 million** drawn on the Company's revolving credit facility[15](index=15&type=chunk) [Reconciliation of Non-GAAP Results to GAAP Results](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Results%20to%20GAAP%20Results) This section explains and reconciles non-GAAP financial measures to their GAAP equivalents, providing a clearer view of core operational performance [Explanation of Non-GAAP Measures](index=7&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Non-GAAP measures supplement GAAP results by excluding non-recurring items, aiding internal decision-making and period-to-period comparisons - Non-GAAP measurements supplement GAAP results by excluding the impact of certain items not considered indicative of ongoing operations[17](index=17&type=chunk) - These measures are used for financial and operational decision-making and to evaluate period-to-period comparisons[17](index=17&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This table reconciles GAAP net income and diluted EPS to adjusted non-GAAP figures, detailing adjustments for impairment, lease termination, and acquisition costs Non-GAAP Reconciliation Table | Metric | Q4 FY23 (13 Weeks) | Q4 FY22 (14 Weeks) | FY23 (52 Weeks) | FY22 (53 Weeks) | | :-------------------------------------- | :----------------- | :----------------- | :-------------- | :-------------- | | Net income/(loss) (GAAP) | $12,681 | $(3,298) | $101,351 | $43,123 | | Impairment of assets and lease termination expenses | $27,827 | $31,074 | $29,464 | $31,387 | | Acquisition-related contingent consideration, compensation and amortization expenses | $7,796 | $10,448 | $11,686 | $13,368 | | Tax effect of adjustments | $(9,262) | $(10,795) | $(10,699) | $(11,637) | | **Adjusted net income (non-GAAP)** | **$39,042** | **$27,429** | **$131,802** | **$76,241** | | Diluted net income/(loss) per share (GAAP) | $0.26 | $(0.07) | $2.07 | $0.86 | | Impairment of assets and lease termination expenses | $0.57 | $0.63 | $0.61 | $0.62 | | Acquisition-related contingent consideration, compensation and amortization expenses | $0.16 | $0.21 | $0.24 | $0.27 | | Tax effect of adjustments | $(0.19) | $(0.22) | $(0.22) | $(0.23) | | **Adjusted net income per share (non-GAAP)** | **$0.80** | **$0.56** | **$2.69** | **$1.51** |

Key PointsThe food service industry reached a staggering $997 billion in sales in 2023. As of January 2024, it provided over 12 million jobs in the United States. The restaurant industry is constantly evolving, with social media-driven trends and fickle consumer demands often shaping how we eat out.5 stocks we like better than AKSinking your teeth into a juicy burger from your favorite fast-food chain is comfort food at its finest. But as an investor, capitalizing on a flourishing restaurant empire may prov ...

Wall Street expects a year-over-year increase in earnings on lower revenues when Cheesecake Factory (CAKE) reports results for the quarter ended December 2023. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on Febr ...

CALABASAS HILLS, Calif.--(BUSINESS WIRE)--The Cheesecake Factory Incorporated (NASDAQ: CAKE) today announced it will release fourth quarter fiscal 2023 financial results after market close on Wednesday, February 21, 2024. The Company will hold a conference call to discuss its results on the same day beginning at 2:00 p.m. Pacific Time. The conference call will be webcast and can be accessed on the Company’s website, investors.thecheesecakefactory.com. A replay of the webcast will be available on the Company ...

Company Overview - The Cheesecake Factory operates in the consumer discretionary/restaurant sector and has a buy rating due to stable dividend income generation and growth potential [1][2] - Founded in 1972, the company is headquartered in California and operates restaurant brands including Cheesecake Factory, North Italia, and Fox Restaurant Concepts [3] Financial Performance - Year-over-year revenue growth was +5.8%, indicating recovery from pandemic-era lows [7] - The company reported a significant earnings growth of +845% year-over-year, recovering from a net loss of -$2.4 million in the previous year [10] - The annual dividend increased from $0.61 in 2014 to $1.08 in 2023, representing a +77% growth over the decade, with a current yield of +3.3% [12] Growth Strategy - The company opened two new restaurants in Q3 2023 in population growth regions of the southeastern U.S., with plans to open four to six new restaurants in Q1 2024 [8][9] - The business model relies on high customer traffic to cover the capital-intensive nature of running brick-and-mortar restaurants, supplemented by food delivery apps [4] Market Context - The consumer discretionary sector improved nearly +29% over the past year, although it has faced a decline in the new year [5] - The forward price-to-earnings (P/E) ratio is 12.87, below the sector average of 16.54, indicating a justified valuation based on earnings growth [17] Valuation Concerns - The price-to-book (P/B) ratio stands at 4.74, significantly higher than the sector average of 2.40, suggesting potential overvaluation [16] - The company's equity showed a slight decline from $323.5 million in September 2022 to $321.6 million in October 2023, indicating flat growth in book value [16] Consumer Sentiment - Positive consumer spending trends and a return to mall shopping are expected to benefit the company's foot traffic and overall performance [20] - The company is well-positioned to navigate potential macroeconomic challenges, including a possible recession in 2024, due to its geographic diversification and growth strategy [20]

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended October 3, 2023, including balance sheets, income statements, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of October 3, 2023, total assets slightly increased to **$2.777 billion**, while cash decreased, and stockholders' equity grew to **$321.6 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | October 3, 2023 (Unaudited) | January 3, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $63,987 | $114,777 | | Total current assets | $272,376 | $345,768 | | Property and equipment, net | $777,669 | $746,051 | | Total assets | $2,776,890 | $2,775,220 | | Total current liabilities | $618,520 | $656,678 | | Long-term debt | $469,543 | $468,032 | | Total liabilities | $2,455,246 | $2,483,217 | | Total stockholders' equity | $321,644 | $292,003 | [Condensed Consolidated Statements of Income/(Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%2F%28Loss%29) For Q3 2023, net income reached **$17.9 million** on **$830.2 million** revenue, a significant turnaround from a **$2.4 million** loss in the prior year Income Statement Summary (in thousands, except per share data) | Metric | Thirteen Weeks Ended Oct 3, 2023 | Thirteen Weeks Ended Sep 27, 2022 | Thirty-Nine Weeks Ended Oct 3, 2023 | Thirty-Nine Weeks Ended Sep 27, 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $830,210 | $784,001 | $2,562,494 | $2,410,354 | | Income/(loss) from operations | $19,030 | $(2,205) | $100,427 | $54,058 | | Net income/(loss) | $17,945 | $(2,398) | $88,670 | $46,421 | | Diluted net income/(loss) per share | $0.37 | $(0.05) | $1.80 | $0.92 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash from operations increased to **$150.5 million** for the first nine months of 2023, despite an overall **$50.8 million** decrease in cash and cash equivalents Cash Flow Summary (in thousands) | Cash Flow Activity | Thirty-Nine Weeks Ended Oct 3, 2023 | Thirty-Nine Weeks Ended Sep 27, 2022 | | :--- | :--- | :--- | | Cash provided by operating activities | $150,546 | $98,897 | | Cash used in investing activities | $(100,648) | $(78,057) | | Cash used in financing activities | $(100,629) | $(76,949) | | Net change in cash and cash equivalents | $(50,790) | $(56,470) | | Cash and cash equivalents at end of period | $63,987 | $133,157 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, fair value measurements, debt, leases, and segment information, including specifics on the Revolver Facility and Convertible Senior Notes - As of October 3, 2023, the company had **$130.0 million** outstanding on its **$400 million** Revolver Facility and **$345.0 million** in aggregate principal of Convertible Senior Notes due 2026[37](index=37&type=chunk)[40](index=40&type=chunk) Segment Revenues (in thousands) | Segment | Thirteen Weeks Ended Oct 3, 2023 | Thirteen Weeks Ended Sep 27, 2022 | | :--- | :--- | :--- | | The Cheesecake Factory restaurants | $628,140 | $602,902 | | North Italia | $62,417 | $54,113 | | Other FRC | $58,642 | $52,193 | | Other | $81,011 | $74,793 | | **Total** | **$830,210** | **$784,001** | - Subsequent to the quarter's end, on October 26, 2023, the Board declared a quarterly cash dividend of **$0.27 per share** and approved a new stock repurchase plan under Rule 10b5-1[69](index=69&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the third quarter and first nine months of 2023, covering revenue growth, margin improvements, capital allocation, and fiscal outlook [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Q3 2023 revenues rose **5.9%** to **$830.2 million**, driven by comparable sales growth and improved operating income due to menu pricing offsetting cost inflation - The Cheesecake Factory's Q3 2023 comparable sales increased **2.4%** YoY, driven by a **3.4%** increase in average check, partially offset by a **1.0%** decrease in customer traffic, with off-premise sales constituting **21%** of restaurant sales[93](index=93&type=chunk) - North Italia's Q3 2023 comparable sales grew approximately **8%** YoY, fueled by a **5.5%** increase in average check and a **2.7%** increase in customer traffic[96](index=96&type=chunk) Key Cost Ratios (as % of Revenues) | Cost Category | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | Food and beverage costs | 23.5% | 25.2% | | Labor expenses | 36.3% | 37.4% | | Other operating costs | 27.6% | 27.7% | [Fiscal Outlook](index=33&type=section&id=Fiscal%20Outlook) The company projects fiscal 2023 total revenue at **~$3.45 billion** with a **~3.8%** net income margin, and anticipates continued growth and margin expansion in 2024 Fiscal 2023 Outlook | Metric | Guidance | | :--- | :--- | | Total Revenue | ~$3.45 billion | | Cost Inflation | Mid-single digit range | | Net Income Margin | ~3.8% | | New Restaurants | Up to 16 | | Capital Expenditures | $150 million - $160 million | Fiscal 2024 Outlook | Metric | Guidance | | :--- | :--- | | Total Revenue | $3.6 billion - $3.7 billion | | Cost Inflation | Low to mid-single digit range | | Net Income Margin | 4.0% - 4.5% | | Capital Expenditures | $175 million - $200 million | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Cash from operations totaled **$150.5 million** for the first nine months of 2023, with **$64.0 million** in cash and **$236.5 million** in Revolver Facility availability as of October 3, 2023 - During the first nine months of 2023, cash and cash equivalents decreased by **$50.8 million** to **$64.0 million**[123](index=123&type=chunk) - The company opened seven restaurants in the first nine months of 2023 and plans to open as many as 16 for the full fiscal year[127](index=127&type=chunk) - As of October 3, 2023, the company had a **$130.0 million** outstanding balance on its Revolver Facility, with net availability of **$236.5 million**[130](index=130&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from commodity price volatility, interest rate fluctuations, and investment value changes, with mitigation efforts noted - A hypothetical **1%** increase in food costs would have negatively impacted cost of sales by **$1.9 million** in Q3 2023[142](index=142&type=chunk) - Based on outstanding borrowings, a hypothetical **1%** rise in interest rates would increase annual interest expense by **$1.3 million**[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of October 3, 2023, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of October 3, 2023[144](index=144&type=chunk) - No changes in internal control over financial reporting occurred during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[145](index=145&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings, including a tentative wage citation settlement and dismissed class action complaints, with no material adverse effect expected - The company is involved in a wage citation case from 2018 which has reached a tentative settlement, for which an immaterial amount has been reserved[52](index=52&type=chunk) - Two class action complaints filed in February 2023 regarding alleged improper website tracking were voluntarily dismissed by the plaintiffs in May 2023[53](index=53&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended January 3, 2023, have occurred - The company directs investors to the risk factors detailed in its Annual Report on Form 10-K for the fiscal year ended January 3, 2023, indicating no material updates during the quarter[147](index=147&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2023, the company repurchased **453,000 shares** of common stock, contributing to **56.2 million shares** repurchased cumulatively under authorization Share Repurchases in Q3 2023 (in thousands, except per share data) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 5 – Aug 8, 2023 | 114 | $36.09 | | Aug 9 – Sep 5, 2023 | 107 | $33.21 | | Sep 6 – Oct 3, 2023 | 232 | $29.68 | | **Total** | **453** | N/A | - Through October 3, 2023, the company has cumulatively repurchased **56.2 million shares** at a total cost of **$1,801.9 million**, out of a total authorization of **61.0 million shares**[150](index=150&type=chunk) [Item 5. Other Items](index=42&type=section&id=Item%205.%20Other%20Items) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the third fiscal quarter of 2023 - No director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" during the third fiscal quarter of 2023[151](index=151&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications of principal officers and financial statements in iXBRL format

Growth Strategy - The company aims for significant growth, projecting as many as 16 new units in 2023 across various concepts[16] - North Italia has the potential for 200 domestic locations over time[11] - The company sees an opportunity for 300 domestic locations over time and continued international expansion[8] - The company expects 7% annual unit growth driven by diversified growth engines[56] Financial Performance & Metrics - North Italia's 3Q23 comp sales increased by 8% compared to 3Q22 and 28% compared to 3Q19[12] - North Italia's annualized average unit volume equates to approximately $11.9 million[49] - The Cheesecake Factory's off-premise sales are approximately $2.5 million per restaurant annualized based on 3Q23[35] - The company targets a net income margin of approximately 3.9% at stated sales level[54] - The company projects consolidated sales of approximately $3.45 billion[53] Brand & Operations - The Cheesecake Factory menu has 235 items made fresh, from scratch[18] - North Italia has an alcohol mix of approximately 25%[11]