The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — Cheesecake Factory — Q2 2024 Earnings Presentation
35 slides from The Cheesecake Factory's earnings presentation, Jul 31, 2024
Slide 1: Investor Presentation July 31, 2024
INVESTOR PRESENTATION July 31, 2024
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 2 This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This includes, without limitation, financial guidance and projections, includ
Slide 3: Company Overview
COMPANY OVERVIEW
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS 4 • Experiential dining category leader with diversified growth engines • Best-in-class operational execution and industry-leading retention • Significant growth opportunities driving one of the highest expected growth rates in the casual dining industry • Differentiation and s
Slide 5: CAKE at a Glance
CAKE AT A GLANCE 5 (1) Market data as of July 2, 2024. (2) Represents fiscal year 2023 revenue for the twelve months ended January 2, 2024. We own and operate 340 restaurants across the US and Canada including: • 216 The Cheesecake Factory locations • 39 North Italia locations • 33 Flower Child loca
Slide 6: The Cheesecake Factory
GBsecake ‘Factory. (Beesecake Factory.
Slide 7: Global Footprint
GLOBAL FOOTPRINT 7 Company-Owned: 216 (Including Toronto, Canada) Latin America Mexico City (5) Monterrey (1) Guadalajara (1) Querétaro (1) Asia Shanghai (3) Beijing (1) Chengdu (1) Hangzhou (1) Hong Kong (1) Macau (1) Thailand (1) Middle East UAE (6) Saudi Arabia (4) Kuwait (3) Qatar (3) Bahrain (1
Slide 8: A Highly Differentiated Concept
8 High-energy Atmosphere Exceptional Service Distinct, High-Quality Cheesecakes and Desserts Best-in-Class Execution Experienced Managers Menu Breadth and Innovation Made Fresh From Scratch MENU OPERATIONS AMBIANCE BAKERY A HIGHLY DIFFERENTIATED CONCEPT
Slide 9: Integrated Bakery – The Cheesecake Magic
9 INTEGRATED BAKERY – THE “CHEESECAKE” MAGIC Enables creativity, quality control and supply chain efficiencies 60 Varieties of cheesecakes & 2 desserts Bakery production facilities 17% FY 2023(1) 1 FY 2019 6% (1) (1) Percent of total sales. Impressive Level of Dessert Sales
Slide 10: Best-in-Class Staffing and Operations
BEST-IN-CLASS STAFFING AND OPERATIONS 10 Well-positioned to attract and retain high-quality, experienced staff as an employer of choice • Top-tier recruiting and training programs • Fortune’s ‘100 Best Companies to Work For’ List for 11 consecutive years • Competitive compensation, benefits and heal
Slide 11: Differentiation in Off-Premise
DIFFERENTIATION IN OFF-PREMISE 11 • Extensive menu with over 225 items made from scratch daily • Large portions designed for sharing • Lower incremental delivery pricing versus peers • Fully integrated systems for better execution • Separate bakery counter and register for pick-up of orders Exceptio
Slide 12: Iconic Brand and Cult Status
12 ICONIC BRAND AND CULT STATUS
Slide 13: Strong Consumer Engagement
Followers(1) (in thousands) Followers / $M Sales(2) Followers / $M Sales Instagram Followers 0 200 400 600 800 1,000 1,200 CAKE Maggiano's Outback Bonefish Olive Garden YardHouse Chili's Cracker Barrel BJ's Restaurants LongHorn Carrabba's Texas Roadhouse - 75 150 225 300 375 450 CAKE Maggiano's Outb
Slide 14: Broad Appeal and Brand Affinity
BROAD APPEAL AND BRAND AFFINITY 14 Diverse Appeal Across a broad demographic range Extensive Menu Something for every taste, every price point Special Occasions Seen as a destination for experiential dining Signature Desserts High-quality cheesecakes and desserts Consumers (millennials in particular
Slide 15: Cheesecake Rewards Program
CHEESECAKE REWARDS® 15 PROGRAM OBJECTIVE A SURPRISE and DELIGHT program To leverage data analytics to engage more effectively with our guests and drive incremental sales while maintaining our restaurant level margins Published Offers To support member acquisition and on-going engagement Offered to a
Slide 16: Highest Unit Volumes in the Industry
$12.2 $9.7 $9.5 $7.6 $6.1 $5.6 $4.9 $4.1 $3.6 $3.4 $3.3 Yard House Maggiano's Texas Roadhouse BJ's Olive Garden LongHorn Outback Carrabba's Chili's Bonefish With a Moderate Average Check (1) Driving the Highest Unit Volumes in the Industry(1) ($ in millions) $35 $34 $32 $31 $28 $28 $25 $23 $22 $21 $
Slide 17: 17
17
Slide 18: North Italia
18 • Filling White Space for an On-Trend, Contemporary Italian Offering • Menu features classic Italian favorites with a fresh twist from hand-tossed pizzas and homemade pastas to crave-worthy appetizers, salads and seasonal entrees • Unique menu items tailored to local markets • All dishes handmade
Slide 19: North Italia Growth
19 • Potential for 200 domestic locations over time • Currently have 39 locations in 13 states & Washington D.C. • Italian cuisine is the number one ethnic food category in the United States • Targeting ~20% average annual unit growth • Attractive return profile and sales growth Comp Sales 2Q24 (vs.
Slide 20: Flower Child
FLOWER CHILD HEALTHY FOOD FOR A HAPPY WORLD FLOWER CHILD
Slide 21: Flower Child Overview
• A differentiated concept in the growing fast casual dining segment • 33 locations in 11 states • Targeting ~15% - 20% average annual unit growth • A healthy, balanced dining experience with organic, gluten-free and vegan dishes • All dishes handmade from scratch daily • Menu features customizable
Slide 22: Fox Restaurant Concepts
FOX RESTAURANT CONCEPTS ildflower ARROGANT
Slide 23: Fox Restaurant Concepts (FRC)
FOX RESTAURANT CONCEPTS (FRC) 23 FRC HIGHLIGHTS • Locations: 44 • Geographies 10 states • FY 2023 Revenue(1) $264M (1) Fiscal year 2023 revenue represents revenue for the twelve months ended January 2, 2024 and excludes revenue for Flower Child. FRC serves as an incubation engine, innovating new foo
Slide 24: Diversifying Our Portfolio Across Experiential for Growth
Culinary forward. First class hospitality. Concepts like no other. DIVERSIFYING OUR PORTFOLIO ACROSS EXPERIENTIAL FOR GROWTH 24 National Expansion Boutique Brands Incubation Stage Testing Growth Global Footprint
Slide 25: Accelerating Unit Growth
25 Accelerating Unit Growth AS MANY AS 22 NEW UNITS IN 2024 11 NROs YTD 13 New Restaurants Opened in 2022 16 New Restaurants Opened in 2023 ACCELERATING UNIT GROWTH As of July 31, 2024 Plano, TX Charlotte, NC Frontenac, MO FLOWER CHILD Atlanta, GA Birmingham, AL Dallas, TX CULINARY DROPOUT Houston,
Slide 26: Financial Performance
FINANCIAL PERFORMANCE
Slide 27: Driving Strong Sales Growth
27 DRIVING STRONG SALES GROWTH FY 2023 COMP SALES AVERAGE WEEKLY SALES (2) FY 2023 AVERAGE WEEKLY SALES Q2 2024 COMP SALES AVERAGE WEEKLY SALES (2) Q2 2024 vs 2022 3.0% 8% vs 2022 3% vs 2Q23 1.4% 2% vs 2Q23 (6)% ~$241,000 Equates to $12.5M Annualized AUV(1) ~$151,300 Equates to $7.9M Annualized AUV(
Slide 28: Q2 2024 Highlights
Q2 2024 HIGHLIGHTS(1) 28 Total Revenue $904M Up 4% from PY Adj. Net Inc. Margin 5.9% Up 90 bps from PY Capital Allocation (1) A reconciliation of Non-GAAP measures can be found in the appendix. (2) The Cheesecake Factory comparable sales outperformed the casual dining industry by 150 bps as measured
Slide 29: 2024 Underlying Key Assumptions
2024 UNDERLYING KEY ASSUMPTIONS(1) 29 (1) Assumes no material operating or consumer disruptions. (2) Future decisions to pay or to increase or decrease dividends or to repurchase shares are at the discretion of the Board and will be dependent on several factors. Consolidated Sales Approximately $3.5
Slide 30: Quality Growth Opportunity
QUALITY GROWTH OPPORTUNITY 30 New Unit Growth Targets(1) Size(2) Sales per Sq Ft(2) Annual Unit Growth 7,000 -10,000 ~$1,100 - $1,200 ~2% -3% 6,000 -7,000 ~$1,200 - $1,300 ~20% 3,000 -4,000 ~$1,100 - $1,200 ~15% -20% 3,500 -15,000 ~$1,100 ~10% -15% Diversified Portfolio Differentiated experiential c
Slide 31: History of Outperforming the Industry
HISTORY OF OUTPERFORMING THE INDUSTRY (4.2)% (6.8)% (0.3)% 4.0% 4.2% 3.3% 2.6% 4.1% 3.8% 0.4% 0.9% 2.5% (27.4)% 3.3% 10.5% 13.9% (4.3)% (8.7)% (6.1)% 1.0% 2.0% (0.9)% (1.6)% 0.8% (0.4)% (2.2)% 0.5% 1.4% (24.0)% (0.9)% 6.5% 10.3% 2008 Knapp-Track Index Comparable Sales - Historical 2-year Stack(1),(2
Slide 32: Durable Business Over Time
DURABLE BUSINESS OVER TIME(1) 32 $0.84 $1.07 $1.42 $1.64 $1.88 $2.10 $1.97 $2.37 $2.83 $2.60 $2.51 $2.61 $(1.49) $2.13 $1.51 $2.69 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 Capital Allocation Detail $85 $163 $128 $120 $112 $107 $135 $94 $158 $100 $163 $120 $(47) $146 $50 $67 '0
Slide 33: Appendix
APPENDIX
Slide 34: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 34 In addition to the results provided in accordance with the Generally Accepted Accounting Principles (“GAAP”) in this presentation, the Company is providing non-GAAP measurements which present adjusted diluted net income/(loss) per common share excluding the impact of cert
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 35 ($ in thousands, except per share data) Fiscal Year Fiscal Quarter 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2Q23 2Q24 Net income/(loss) $ 52,293 $ 42,833 $ 81,713 $ 95,720 $ 98,423 $114,356 $101,276 $116,523 $139,494 $157,392 $ 99,03