The Cheesecake Factory(US:CAKE)2022-04-28 03:39Financial Data and Key Metrics Changes - Total sales in Q1 2022 increased by 27% compared to Q1 2021, reflecting strong consumer demand and market share capture [6][17] - Comparable sales at Cheesecake Factory restaurants rose by 20.7% year-over-year [6][18] - First quarter GAAP diluted net income per share was $0.45, while adjusted net income per share was $0.47 [20] - The company generated approximately $34 million in cash flow from operating activities, with total available liquidity of about $424 million [20] Business Line Data and Key Metrics Changes - North Italia's comparable sales grew by 32% year-over-year, with strong performance across all day parts [12][18] - The off-premise channel accounted for 28% of total sales in Q1, with average weekly sales nearly double 2019 levels [11][18] - FRC (including Flower Child) reported sales per operating week of approximately $111,000 [18] Market Data and Key Metrics Changes - Comparable sales at Cheesecake Factory through April 26, 2022, were up 8.2% compared to the same period in 2021 [7] - Staffing levels improved, with approximately 1% more staff than pre-pandemic levels [7][10] Company Strategy and Development Direction - The company plans to open 15 to 16 new restaurants in fiscal year 2022, including international expansion under a licensing agreement [8][26] - The company is committed to protecting four-wall margins and plans to implement pricing adjustments in response to inflation [9][24] - Corporate social responsibility efforts include sourcing 100% cage-free eggs and reducing greenhouse gas emissions [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of consumer demand and the ability to absorb uncertainty in the operating environment [31][32] - The company anticipates commodity inflation in the low to mid double-digits for the year, with expectations for inflationary pressures to lessen over time [22][24] - Management noted that the current inflationary environment is unprecedented but believes their strategic pricing plan will support earnings and profit margin recovery [27] Other Important Information - The company has reinstated its quarterly dividend and stock repurchase program [8][26] - The company is focused on leveraging its supply chain to support operational efficiency and product availability [13][35] Q&A Session Summary Question: What are the underlying consumer conditions going forward? - Management noted that consumer demand has remained strong post-Omicron surge, and they are confident in their growth plans despite uncertainties [31][32] Question: What is the status of the loyalty program? - The loyalty program pilot is still in development, with updates expected soon [39] Question: How does on-premise traffic compare to pre-pandemic levels? - On-premise traffic is currently between 85% and 90% of pre-pandemic levels, with potential for further improvement [40] Question: What are the leading indicators of consumer behavior? - Management monitors sales stability and consumer financial health, noting that consumers are generally in a good position [63][65] Question: How is the company approaching pricing decisions? - The company aims for a stable pricing strategy, balancing margin protection with consumer impact, and is currently at a 4.7% pricing increase [68][70]