Financial Data and Key Metrics Changes - For Q1 2025, total revenue was $119.2 million, up from $116.2 million in Q1 2024, representing a year-over-year increase of 2.6% [21] - Company-operated restaurant revenue increased by 1.2% to $98.4 million from $97.2 million in the same period last year, driven by a 0.6% increase in comparable restaurant sales [21][22] - GAAP net income for Q1 2025 was $5.5 million, or $0.19 per diluted share, compared to $5.9 million, or $0.19 per diluted share in the prior year [28][29] Business Line Data and Key Metrics Changes - Franchise revenue increased by 16.2% to $13.2 million, driven by IT pass-through revenue related to the franchisee rollout of a new point of sale system [23] - The increase in franchise revenue was partially offset by a 1.3% decrease in comparable restaurant sales [23] Market Data and Key Metrics Changes - System-wide comparable store sales decreased by 1.2% in Q2 to date through April 23, 2025, with a 0.1% decrease in company-operated restaurants and a 1.8% decrease in franchise restaurants [24] Company Strategy and Development Direction - The company is focused on a brand turnaround, emphasizing long-term sustainable growth without shortcuts [5] - Upcoming initiatives include a brand relaunch and menu innovations, such as the launch of Fresca wraps and salads, and quesadillas [6][9] - The company aims to open at least 10 new restaurants in 2025, marking the largest system-wide unit growth since 2022 [16][17] Management Comments on Operating Environment and Future Outlook - Management acknowledged that the first quarter results were underwhelming but expressed confidence in the steps being taken to improve performance [6] - The company expects sequential quarterly acceleration in comparable sales trends in Q3 and Q4, driven by the brand relaunch and new product launches [24] - Management noted that the consumer pullback is real, but they are focused on what they can control, including reinforcing quality and value [35] Other Important Information - Food and paper costs as a percentage of company restaurant sales decreased by 120 basis points year-over-year to 25.2% due to higher menu pricing [24][25] - Labor and related expenses increased by 120 basis points year-over-year to 32.7%, with wage inflation of approximately 12% in Q1 2025 [25][26] - The company expects to remodel between 60 to 70 system-wide restaurants in 2025, with eight already completed [19][30] Q&A Session Summary Question: Expectations for Q2 same store sales - Management indicated that headwinds are expected to continue in Q2, but they are focused on their brand relaunch and menu innovations to drive sales [34][35] Question: Impact of new product launches on comp trends - Management noted that the Mango Habanero product drove initial trial, and they are optimistic about the upcoming launches of Fresca wraps and quesadillas [38][40] Question: Regional differences in consumer behavior - Management observed that the consumer pullback is widespread, affecting various income bands, including the Hispanic consumer [51][52] Question: Menu pricing expectations for the year - Management expects menu pricing to be around 3% for the year, with approximately 2% in Q3 and Q4 [53] Question: Operational gaps identified through consumer feedback - Management is implementing a back-to-basics program to address operational gaps, focusing on accuracy and hospitality [70][72] Question: Kiosk rollout status and benefits - Kiosks are in most company restaurants, with plans to complete the rollout in the remaining locations, and management sees opportunities to enhance guest engagement through kiosks [73][74]

Financial Data and Key Metrics Changes - For Q1 2025, total revenue was $119.2 million, up from $116.2 million in Q1 2024, representing a 1.7% increase [19] - Company-operated restaurant revenue increased by 1.2% to $98.4 million, driven by a 0.6% increase in comparable restaurant sales and additional sales from two new restaurant openings [19] - The effective price increase was approximately 4.4% compared to 2024 [20] - GAAP net income for Q1 2025 was $5.5 million, or $0.19 per diluted share, compared to $5.9 million, or $0.19 per diluted share in the prior year [26] Business Line Data and Key Metrics Changes - Franchise revenue increased by 16.2% to $13.2 million, driven by IT pass-through revenue related to a new point of sale system and new franchise openings [20] - Comparable restaurant sales decreased by 1.3% for franchise-operated restaurants [20] Market Data and Key Metrics Changes - System-wide comparable store sales decreased by 1.2% in Q2 to date, with a 0.1% decrease in company-operated restaurants and a 1.8% decrease in franchise restaurants [21] Company Strategy and Development Direction - The company is focused on a brand turnaround, emphasizing long-term sustainable growth without shortcuts [5] - Upcoming initiatives include a brand relaunch and menu innovations, such as the launch of Fresca wraps and salads, and quesadillas [6][8] - The company aims to open at least 10 new restaurants in 2025, marking the largest system-wide unit growth since 2022 [14][15] - Remodeling efforts are ongoing, with plans to remodel 60 to 70 restaurants in partnership with franchisees [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging consumer environment but remains confident in the brand's long-term potential [6] - The company expects sequential quarterly acceleration in comparable sales trends in Q3 and Q4, driven by the brand relaunch and new product launches [22] - Wage inflation is anticipated to be between 4% to 5% for the year, with Q1 experiencing a 12% increase [23][24] Other Important Information - The company has transitioned to a new distribution partner, which is expected to enhance margins and support future growth [14] - The restaurant contribution margin for Q1 was 16%, down from 17.6% in the previous year, primarily due to labor inflation and occupancy costs [24][25] - General and administrative expenses decreased to 9.5% of total revenue, aided by prior year restructuring costs [26] Q&A Session Summary Question: Expectations for Q2 same store sales - Management noted that consumer pullback is real and expects headwinds to continue into Q2, but is focused on brand relaunch and value innovation [32][33] Question: Impact of new product launches on comp trends - The Mango Habanero product drove initial trial, and upcoming launches of Fresca wraps and quesadillas are expected to attract different consumer segments [36][38] Question: Timing of kitchen equipment rollout and labor cost impact - Equipment rollout is ongoing, with expectations of improved labor efficiency as new systems are implemented [41] Question: Regional differences in consumer behavior - Management observed similar consumer pullback across markets, with particular pressure on the Hispanic consumer segment [50][51] Question: Menu pricing expectations for the year - The company expects menu price increases to be around 3% for the year, with variations across quarters [52] Question: Development pipeline momentum - Management expressed optimism about the development pipeline, with confidence in opening at least 10 new units this year and potential for more in the following year [59][60]

Financial Data and Key Metrics Changes - The company reported total revenues of $927 million for the first quarter, finishing towards the high end of guidance, with a 27% year-over-year increase in adjusted earnings per share [7][16] - Adjusted net income margin was 4.9%, exceeding the high end of the guidance range [16] - GAAP diluted net income per share was $0.67, while adjusted diluted net income per share was $0.93 [20] Business Line Data and Key Metrics Changes - Comparable sales at The Cheesecake Factory restaurants increased by 1%, with total sales reaching $673 million, up 1% from the prior year [7][17] - North Italia's total sales were $83.4 million, an 18% increase from the prior year, with comparable sales declining by 1% [17][14] - Flower Child sales totaled $43.5 million, up 26% from the prior year, with comparable sales increasing by 5% [17][14] Market Data and Key Metrics Changes - The Cheesecake Factory's off-premise sales mix was 22%, consistent with the previous year [18][102] - North Italia's annualized average unit volumes (AUVs) increased to $7.75 million, while Flower Child's AUV was over $4.6 million, reflecting strong consumer demand [13][14] Company Strategy and Development Direction - The company plans to open as many as 25 new restaurants in 2025, with eight openings expected in the second quarter [9][26] - The company has been recognized on Fortune Magazine's 100 Best Companies to Work For list for the twelfth consecutive year, highlighting its commitment to employee satisfaction [9] - The focus remains on menu innovation, operational execution, and maintaining restaurant design and ambiance [9][27] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment feels less robust than three months ago, citing unprecedented weather and economic factors [30][31] - The company anticipates total revenues for fiscal 2025 to be approximately $3.76 billion at the midpoint of estimates, with adjusted net income margin expectations around 4.75% [24][25] - Management expressed confidence in navigating near-term uncertainties while delivering sustainable long-term value [27] Other Important Information - The company returned $153.8 million to shareholders during the quarter through dividends and share repurchases [17] - The company ended the quarter with total available liquidity of approximately $501.9 million [20] Q&A Session Summary Question: Has the uncertain macro environment already impacted the business? - Management acknowledged that there has been a lot of noise in the first four months of the year, but the business remains stable and predictable [30][31] Question: Can you quantify the expected impact of tariffs on the P&L? - Management indicated that the biggest impact would be in other operating expenses, with potential pricing adjustments of 50 to 75 basis points if necessary [35][40] Question: What are the same-store sales components for The Cheesecake Factory? - The Cheesecake Factory experienced 4% effective pricing, with traffic down 1.2% [50] Question: How is the performance of Flower Child differentiating in a slowing environment? - Management highlighted the strong food quality and operational stability as key factors driving Flower Child's performance [70] Question: What is the expected pricing for the year? - Management confirmed that the pricing expectation remains at 4% for the year [75]