What Honey & Co Can Teach Restaurants About Experiential Dining https://t.co/u2ErgwqRaZ https://t.co/T2fzdPrNdV ...

What Honey & Co Can Teach Restaurants About Experiential Dining https://t.co/tbisLkzBdN https://t.co/wlzzYZFFTf ...

Financial Data and Key Metrics Changes - The company reported total revenues of $956 million for Q2 2025, exceeding guidance expectations [18] - Adjusted net income margin was 5.8%, also above the high end of guidance [18] - Comparable sales at The Cheesecake Factory restaurants increased by 1.2% year-over-year [6][18] - The Cheesecake Factory's four-wall restaurant margin increased to 18.5%, up 80 basis points year-over-year, marking the highest level in eight years [7] Business Line Data and Key Metrics Changes - Total sales for The Cheesecake Factory restaurants were $683.3 million, up 1% from the prior year [18] - North Italia's total sales were $90.8 million, up 20% year-over-year, with comparable sales declining by 1% [18][14] - Flower Child's sales totaled $48.2 million, up 35% from the prior year, with comparable sales increasing by 4% [15][18] Market Data and Key Metrics Changes - Off-premise sales for The Cheesecake Factory accounted for 21% of total sales, consistent with the average of the prior four quarters [11] - North Italia's annualized average unit volumes (AUVs) reached $8 million, while Flower Child's AUVs exceeded $4.8 million [13][16] Company Strategy and Development Direction - The company plans to open as many as 25 new restaurants in 2025, including two Cheesecake Factory locations internationally under licensing agreements [8][26] - The introduction of new menu items, including 14 new dishes and a new cheesecake, is aimed at maintaining culinary innovation without relying on discounting [6][7] - The company is focused on enhancing the Cheesecake Rewards program to drive customer engagement and loyalty [12][91] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term trajectory of the portfolio, citing strong demand for distinct dining experiences [8] - The operating environment has been stable, with management noting that the company is weathering current conditions effectively [51] - Future guidance for Q3 anticipates total revenues between $905 million and $915 million, with adjusted net income margin expected to be about 3.25% [22][24] Other Important Information - The company ended the quarter with total available liquidity of approximately $515.3 million, including a cash balance of $148.8 million [21] - Capital expenditures totaled approximately $42 million during the quarter for new unit development and maintenance [22] Q&A Session Summary Question: Increase in net income margin for 2025 - Management confirmed that the increase is primarily driven by operational excellence and better-than-expected Q2 results [29][30] Question: Third quarter revenue outlook - The revenue outlook assumes stable same-store sales similar to Q2 [31] Question: Labor retention levels - Management reported that staff retention is at historical highs, exceeding pre-pandemic levels [35][36] Question: Cheesecake Factory Q2 sales breakdown - Q2 net effective pricing was about 4%, with traffic down 1.1% [38][39] Question: Customer response to new menu items - Management noted positive customer response to new menu items, with marketing efforts focused on visibility [42][43] Question: Flower Child profitability and unit economics - Flower Child's mature unit margins reached 20.4%, with strong AUVs [52] Question: North Italia performance and comp breakdown - North Italia's comp breakdown showed a 4% price increase, negative 1% mix, and negative 4% traffic [59][61] Question: Menu pricing strategy - The company plans to take less pricing in the second half of the year, introducing lower-priced items [70][72] Question: Development pipeline for 2026 - Management anticipates opening more units than the 25 planned for 2025, with a strong pipeline [85] Question: Dynamics around convertible notes - Management discussed the potential dilution from convertible notes and the conditions under which they would consider conversion [116][117]

Financial Data and Key Metrics Changes - The company reported total revenues of $956 million for Q2 2025, exceeding expectations and marking a year-over-year increase [16][17] - Adjusted net income margin improved to 5.8%, reflecting operational excellence and strong sales trends [16][22] - Cheesecake Factory's comparable sales increased by 1.2%, while North Italia's sales rose by 20% and Flower Child's sales surged by 35% year-over-year [17][18][14] Business Line Data and Key Metrics Changes - Cheesecake Factory restaurants achieved total sales of $683.3 million, up 1% from the previous year, with average weekly sales reaching record highs [17][5] - North Italia's annualized average unit volumes (AUVs) increased by 2% to $8 million, despite a 1% decline in comparable sales [12][13] - Flower Child's comparable sales increased by 4%, with average weekly sales of $91,400, leading to an annualized AUV of over $4.8 million [14][18] Market Data and Key Metrics Changes - Off-premise sales for Cheesecake Factory accounted for 21% of total sales, consistent with previous quarters [10] - The company opened eight new restaurants in Q2, including two Cheesecake Factory locations and three Flower Child locations, with plans to open up to 25 new restaurants in 2025 [7][24] Company Strategy and Development Direction - The company emphasizes culinary innovation, introducing 14 new dishes and a new cheesecake to maintain menu relevance without relying on discounting [6][10] - The focus on operational excellence and staff retention is seen as a key driver for improved guest satisfaction and profitability [9][35] - The company aims to continue expanding its restaurant footprint while maintaining high operational standards and guest experiences [24][86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term trajectory of the business, citing strong demand for unique dining experiences [7][24] - The operating environment is described as stable, with expectations for continued growth despite potential macroeconomic challenges [51][52] - The company anticipates total revenues for fiscal 2025 to be approximately $3.76 billion, with an adjusted net income margin of about 4.9% [22][23] Other Important Information - The Cheesecake Rewards program is performing well, with higher member engagement and satisfaction compared to non-members [11][94] - The company is focused on maintaining a strong balance sheet, with total available liquidity of approximately $515.3 million [20] Q&A Session Summary Question: Increase in net income margin for 2025 - Management confirmed that the increase is primarily driven by operational improvements and better-than-expected Q2 results [27][28] Question: Third quarter revenue outlook - The revenue outlook assumes stable comparable sales similar to Q2, with no significant changes anticipated [29] Question: Labor retention levels - Management reported that staff retention is at historically high levels, exceeding pre-pandemic rates, contributing to improved productivity and guest satisfaction [33][35] Question: Cheesecake Factory Q2 sales breakdown - The net effective pricing was about 4%, with traffic down 1.1% and mix contributing to the balance [37][38] Question: Customer response to new menu items - Management indicated positive customer response to new menu items, with marketing strategies in place to highlight these innovations [41][42] Question: Flower Child profitability and unit economics - Flower Child is experiencing strong performance with mature unit margins over 20%, and the company is optimistic about future growth [50][52] Question: North Italia performance and sales transfer - North Italia's performance is strong, with AUVs of $8 million, but some sales transfer is impacting comparable sales [59][60] Question: Menu pricing strategy - The company plans to take less pricing in the second half of the year, focusing on value-driven menu items [68][70] Question: Development pipeline for 2026 - Management anticipates opening more units than the 25 planned for 2025, with a strong pipeline in place [86][87]