Q3 2024 Cheesecake Factory Inc Earnings Call Transcript
Key Points
- Cheesecake Factory Inc (CAKE) reported a 49% growth in adjusted earnings per share from the prior year, showcasing strong profitability.
- The company successfully opened four new restaurants in the third quarter and is on track to open as many as 22 new restaurants in 2024.
- Cheesecake Factory's comparable sales and traffic outperformed the industry, indicating strong consumer demand and market share capture.
- Operational improvements led to record high guest satisfaction scores and better restaurant-level margins, with a 180 basis point improvement from Q3 2023.
- The Cheesecake Rewards program is exceeding internal expectations, driving incremental visits from existing guests and attracting new ones.
- Despite positive sales trends, Cheesecake Factory experienced a negative traffic impact of 0.8% in July, although it improved later in the quarter.
- The company faced closures of two Cheesecake Factory locations due to a site condemnation and lease exit, which is unusual for the brand.
- Labor costs remain a challenge, with higher health insurance costs impacting overall expenses despite improvements in labor productivity.
- The company is not providing specific comparable sales and earnings guidance for Q4 2024, which may create uncertainty for investors.
- Cheesecake Factory's external bakery sales showed no significant growth, indicating challenges in that segment despite new distribution agreements.
Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cheesecake Factory Incorporated third-quarter, 2024 earnings conference call.
(Operator Instructions)
Thank you. I would now like to turn the conference over to Etienne Marcus, Vice President of Investor relations. You may begin.
Good afternoon, and welcome to our third-quarter, fiscal 2024 earnings call. On the call with me today are David Overton, our Chairman and Chief Executive Officer; David Gordon, our, President; and Matt Clark, our Executive Vice President and Chief Financial Officer. Before we begin, let me quickly remind you that during this call items will be discussed that are not based on historical fact and are considered forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995.
Actual results could be materially different from those stated or implied
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