The Cheesecake Factory Incorporated · NASDAQ:CAKE
The Cheesecake Factory — William Blair Growth Stock Conference 2024
30 slides from The Cheesecake Factory's conference presentation, Jun 5, 2024
Slide 1: William Blair Growth Stock Conference
WILLIAM BLAIR GROWTH STOCK CONFERENCE JUNE 5, 2024 DAVID GORDON, PRESIDENT MATT CLARK, CHIEF FINANCIAL OFFICER
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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, includin
Slide 3: CAKE at a Glance
CAKE AT A GLANCE FOUNDED IPO HEADQUARTERS TICKER MARKET CAP(1) REVENUE(2) 1972 1992 CALABASAS HILLS, CA CAKE $2.0B $3.4B We own and operate 337 restaurants across the US and Canada including: Our nearly 48,000 staff members • 216 The Cheesecake Factory locations recently helped us become one of the
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Slide 5: Global Footprint
GLOBAL FOOTPRINT Middle East Asia Company-Owned: 216 UAE (6) Shanghai (3) (Including Toronto, Canada) Beijing (1) Saudi Arabia (4) Chengdu (1) Kuwait (3) Hangzhou (1) Qatar (3) Hong Kong (1) Bahrain (1) Latin America Macau (1) Mexico City (5) Thailand (1) Monterrey (1) Guadalajara (1) Querétaro (1)
Slide 6: A Highly Differentiated Concept
A HIGHLY DIFFERENTIATED CONCEPT MENU OPERATIONS AMBIANCE BAKERY Menu Breadth and Innovation Best-in-Class Execution High-energy Atmosphere Distinct, High-Quality Made Fresh From Scratch Experienced Managers Exceptional Service Cheesecakes and Desserts 6
Slide 7: Breadth of Menu & Innovation Are Key Competitive Advantages
BREADTH OF MENU & INNOVATION ARE KEY COMPETITIVE ADVANTAGES 225+ Menu Items - Made Fresh, From Scratch 7
Slide 8: Dining With Us Is an Experience
DINING WITH US IS AN EXPERIENCE Exceptional Service, Hospitality and Ambiance Drive Sales 8
Slide 9: Integrated Bakery – The "Cheesecake" Magic
INTEGRATED BAKERY – THE “CHEESECAKE” MAGIC 2 60 Bakery Varieties of Industry-Leading Dessert Sales production cheesecakes & facilities desserts 16% FY 2019(1) 17% FY 2023(1) Enables creativity, quality control and supply chain efficiencies (1) Percent of total sales. 9
Slide 10: Best-in-Class Staffing and Operations
BEST-IN-CLASS STAFFING AND OPERATIONS EXCEPTIONAL SERVICE AND OPERATIONAL EXECUTION SUPPORTED BY INDUSTRY-LEADING RETENTION 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 Wo
Slide 11: Broad Appeal and Brand Affinity
BROAD APPEAL AND BRAND AFFINITY Diverse Extensive Special Signature Appeal Menu Occasions Desserts Across a broad Something for every taste, Seen as a destination for High-quality cheesecakes demographic range every price point experiential dining and desserts Consumers (millennials in particular) r
Slide 12: Strong Consumer Engagement
STRONG CAKE has more Instagram followers and significantly outpaces peers in CONSUMER followers relative to sales ENGAGEMENT Followers / $M Sales Instagram Followers Followers(1) (in thousands) 0 200 400 600 800 1,000 1,200 Leveraging the STRENGTH OF CAKE Maggiano's OUR BRAND across social media Out
Slide 13: Driving the Highest Unit Volumes in the Industry With a Moderate Average Check
Driving the Highest Unit Volumes in the Industry (1) ($ in millions) $12.2 $9.5 $9.5 $7.6 $6.1 $5.5 $4.7 $4.1 $3.6 $3.4 $3.3 Yard House Maggiano's Texas BJ's Olive LongHorn Outback Carrabba's Chili's Bonefish Roadhouse Garden With a Moderate Average Check (1) $35 $34 $32 $31 $28 $26 $25 $23 $22 $21
Slide 14: Differentiation in Off-Premise
DIFFERENTIATION IN OFF-PREMISE LEVERAGING OUR DIFFERENTIATED POSITIONING TO OFF-PREMISE SALES % OF TOTAL REVENUE DRIVE THE HIGHEST OFF-PREMISE AVERAGE WEEKLY SALES $2.7 million per restaurant (1) 43% 32% 25% Exceptional Value 11% 16% 22% 22% 9% • Extensive menu with over 225 items made from scratch
Slide 15: North Italia
• 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 fr
Slide 16: North Italia Comp Sales and Growth
• Potential for 200 domestic locations over time • Currently have 39 locations in 13 states & Washington D.C. Comp Sales • Italian cuisine is the number one ethnic food 1Q24 (vs. 1Q23): 3% category in the United States FY ‘23 (vs. FY ‘22): 8% • Targeting ~20% average annual unit growth • Attractive
Slide 17: Flower Child
On a simple, soul-satisfying mission to spread positively delicious vibes and healthy food. • A differentiated concept in the growing fast casual dining segment • 32 locations in 10 states • Targeting ~15% - 20% average annual unit growth • A healthy, balanced dining experience with organic, gluten-
Slide 18: Fox Restaurant Concepts
FOX RESTAURANT CONCEPTS “Great hospitality, every time.” FRC serves as an incubation engine, innovating new food, dining and hospitality - Sam Fox experiences to create fresh, exciting concepts for the future FRC’s experiential concepts are designed to deliver unique guest experiences across differe
Slide 19: Accelerating Unit Growth
ACCELERATING UNIT GROWTH AS MANY AS 22 NORTH ITALIA FLOWER CHILD CULINARY DROPOUT NEW UNITS IN 2024 7 Houston, TX Dallas, TX Charlotte, NC Plano, TX Charlotte, NC Atlanta, GA Birmingham, AL NROs YTD(1) 13 New Restaurants Opened in 2022 16 New Restaurants Opened in 2023 (1) As of May 30, 2024. 19
Slide 20: Cheesecake Rewards
CHEESECAKE REWARDS ® Opportunity to drive incremental traffic PROGRAM A SURPRISE and DELIGHT program To leverage data analytics to engage more effectively with OBJECTIVE our guests and drive incremental sales while maintaining our restaurant level margins Published Unpublished Marketable Offers Offe
Slide 21: Financial Performance
FINANCIAL PERFORMANCE
Slide 22: History of Outperforming the Industry
HISTORY OF OUTPERFORMING THE INDUSTRY Comparable Sales - Historical 2-year Stack(1),(2) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020(1) 2021(2) 2022(2) 2023(2) 13.9% 10.5% 10.3% Industry Outperformance 6.5% During Economic 4.0% 4.2% 3.3% 4.1% 3.8% 3.3% 2.6% 2.5% Downturn 1.0% 2.0
Slide 23: Durable Business Over Time
DURABLE BUSINESS OVER TIME (1) Adjusted Earnings/(Loss) Per Common Share Free Cash Flow $2.83 $2.60 $2.51 $2.61 $2.69 $163 $158 $163 $2.37 $2.13 $128 $120 $112 $135 $146 $2.10$1.97 $107 $120 $1.88 $94 $100 $1.42 $1.64 $1.51 $85 $1.07 $67 $0.84 $50 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
Slide 24: Q1 2024 Highlights
Q1 2024 HIGHLIGHTS (1) Total Revenue Adj. Net Inc. Margin Adjusted EPS $891M 4.0% $0.73 Up 3% from PY Up 50 bps from PY Up 20% from PY Unit Growth Capital Allocation The Cheesecake Factory Comp Sales 5 NROs $37M $13M (0.6%) Restaurant Count(3) CapEx Dividends 330 bps above Industry (2) 336 $12M Up 6
Slide 25: 2024 Underlying Key Assumptions
2024 UNDERLYING KEY ASSUMPTIONS(1) Consolidated Sales Approximately $3.6 Billion CCF AUVs Approximately $12.4 Million Net Income Margin Targeting ~4.25% at the stated sales level As many as 22 New Restaurant Openings • 3 - 4 The Cheesecake Factory locations New Unit Growth • 6 - 7 North Italia locat
Slide 26: Quality Growth Opportunity
QUALITY GROWTH OPPORTUNITY Diversified Portfolio Attractive Growth Potential Value Creation Opportunities Differentiated experiential concepts Significant runway for future development Leveraging brand power, operational diversified across industry segment, price across portfolio of concepts to driv
Slide 27: Investment Highlights
INVESTMENT HIGHLIGHTS • Experiential dining category leader with diversified growth engines • Longstanding history of best-in-class operational execution and industry-leading retention • Broad demographic appeal and strong consumer engagement • Accelerating unit growth across portfolio of differenti
Slide 28: Appendix
APPENDIX
Slide 29: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS In addition to the results provided in accordance with the Generally Accepted Accounting Principles (“GAAP”) in this presentation, the Company is providing non-GAAP measurements which present adjusted diluted net income/(loss) per common share excluding the impact of certain
Slide 30: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS ($ 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 1Q23 1Q24 Net income/(loss) $ 52,293 $ 42,833 $ 81,713 $ 95,720 $ 98,423 $114,356 $101,276 $116,523 $139,494 $157,392 $ 99,035 $
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