Executive Summary
In the third quarter of fiscal 2024, The Cheesecake Factory Incorporated (CAKE) demonstrated resilience with stable revenue and robust profitability, highlighted by a notable 49% increase in adjusted earnings per share year-over-year. The company reported total revenues of $865 million, matching their guidance and reflecting a strong performance relative to industry trends. Key operational successes, including a high rate of customer satisfaction and successful openings of new locations, position The Cheesecake Factory well for future growth. Management emphasized their commitment to optimizing operations and expanding restaurant units as vital aspects of their strategy moving forward.
Key Performance Indicators
QoQ: -11.90% | YoY:-30.34%
Key Insights
The Cheesecake Factory's Q3 2024 resulted in total revenues of $865 million, unchanged from the previous quarter but showing a year-over-year increase. Key financial metrics include a gross profit of $94.5 million, yielding a gross profit margin of 10.9%. Operating income was $38.3 million, with a net income of approximately $30 million. Notably, the adjusted net income margin reached 3.3%, surpassing previous forecasts. The company boasts a strong liquidity position with over $289 million ...
Financial Highlights
The Cheesecake Factory's Q3 2024 resulted in total revenues of $865 million, unchanged from the previous quarter but showing a year-over-year increase. Key financial metrics include a gross profit of $94.5 million, yielding a gross profit margin of 10.9%. Operating income was $38.3 million, with a net income of approximately $30 million. Notably, the adjusted net income margin reached 3.3%, surpassing previous forecasts. The company boasts a strong liquidity position with over $289 million in available resources and a stable total debt at $475 million, indicating solid balance sheet health amid expansion plans.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
865.47M |
-2.89% |
0.00% |
| Gross Profit |
94.46M |
-13.14% |
0.00% |
| Operating Income |
38.25M |
-30.34% |
-11.90% |
| Net Income |
29.99M |
-9.63% |
0.00% |
| EPS |
0.63 |
-10.00% |
0.00% |
Key Financial Ratios
operatingProfitMargin
4.42%
Management Commentary
1. Strong Sales Performance: CEO David Overton noted, "Cheesecake Factory restaurant comparable sales and traffic meaningfully outperformed the industry, underscoring the strength and consistency of consumer demand for our brand." This reflects their ability to capture market share despite an otherwise challenging economic environment.
2. Growth Strategy: Overton also stated, "With 17 restaurant openings so far this year, we are well positioned to meet our objective of opening as many as 22 new restaurants in 2024." This indicates a commitment to growth and expansion, crucial for maintaining competitive positioning in the restaurant industry.
"Solid sales and exceptional operational execution in the quarter resulted in adjusted earnings per share growth of 49% from the prior year." - David Overton, CEO
â David Overton
"Our focus on delivering value to our shareholders means we are always evaluating opportunities for our concepts." - David Overton, CEO
â David Overton
Forward Guidance
Looking ahead, management provided optimism for Q4 with expected revenues between $905 million and $915 million, driven by ongoing operational improvements and a stable commodity inflation outlook projected at low single-digits. They indicated a cautious but positive sales growth trajectory heading into 2025, with anticipated unit growth ramping up to 24 restaurant openings. Management encourages monitoring operational efficiencies and market conditions as they navigate through fluctuations in consumer behavior and economic climate.