Cheesecake Factory Profit Nearly Doubles To $61.3 Million As Flagship Comparable Sales Jump 15.2%
Third-quarter revenue hit $1,033.4 million as the namesake restaurants outran casual dining, while North Italia sales fell 3%.
Cheesecake Factory, the restaurant and bakery operator, said Tuesday that third-quarter net income was $61.3 million, up from $31.9 million a year earlier, as sales at its namesake restaurants rose 15.2% on a comparable basis. Revenue reached $1,033.4 million, against $907.2 million in the year-earlier quarter.
A flagship-led quarter
Diluted earnings per share were $1.19, against $0.66 a year earlier. Adjusted earnings, which strip out certain items, were $1.02 per share. The company recorded a pre-tax gain of $12.9 million tied to acquisition-related items at Fox Restaurant Concepts, and the adjusted figures exclude it.
Operating income rose to $74.9 million from $37.3 million. Labor costs fell to 34.8% of revenue from 35.6%, and food and beverage costs to 21.2% from 21.8%.
Chairman and CEO David Overton said the company delivered "record quarterly revenue," with comparable sales and traffic at The Cheesecake Factory "meaningfully outperforming the broader casual dining industry." He credited menu innovation, the rewards program and social media engagement.
North Italia lags the flagship
Cheesecake Factory owns and operates restaurants and a bakery. Its investor presentation puts the count at 383 company-owned restaurants in the US and Canada, including 218 Cheesecake Factory locations, 52 North Italia, 47 Flower Child and 60 other Fox concepts, plus 35 licensed restaurants abroad.
North Italia comparable sales fell 3%, though its revenue rose to $93.0 million from $83.5 million. Flower Child comparable sales rose 11%.
Cash, openings and the dividend
The company ended the quarter with $585.3 million of available liquidity: $249.3 million in cash and $336.0 million of undrawn revolver capacity. Its only debt is $575 million of 2.00% convertible senior notes due 2030. It repurchased about 29,800 shares for $2.4 million.
It opened six restaurants in the quarter and still expects as many as 26 new ones in fiscal 2026. The presentation targets about $4.09 billion in consolidated 2026 sales.
The board declared a quarterly dividend of $0.30 per share, payable November 24 to holders of record on November 10.
Management held its plan for as many as 26 openings this year, including as many as eight North Italia locations, even as that concept's comparable sales declined.
