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Cheesecake holds onto 90% of to-go business as dine-in service resumes

Overall unit sales have climbed to within 7% of year-ago levels, the polished chain says. Meanwhile, it's about to experiment with virtual concepts.

The Cheesecake Factory is holding onto nearly 90% of elevated off-premise sales in the 187 units that have reopened at least a portion of their dining rooms, lifting sales during the first month of the fourth quarter to within 7% of the year-ago average, management of the polished casual chain’s parent company told investors Thursday.

They noted that the restaurants offering dine-in service have been limited to 50% of their indoor seating on average by state and local safety requirements. The chain intends to install glass partitions between the tables of about two-thirds of its branches during the current quarter to boost capacities.

The figures suggest the chain may be poised to push its average unit sales above the $10.7 million notched in 2019. CEO David Overton informed financial analysts that 20 of the chain’s restaurants generated sales during the third quarter that exceeded their intake for the year-ago quarter. The brand had 205 restaurants open in total at the end of the period.

Management also disclosed that it is proceeding with its strategy of using the multi-concept operation it acquired a year ago, Fox Restaurant Concepts (FRC), as an incubator for new growth options. Scottsdale, Ariz.-based FRC will try virtual riffs next month on its Doughbird pizza-and-chicken concept and its Flower Child health-focused fast-casual venture. The executives said the ventures will offer a limited menu of each brand’s specialties for off-premise consumption.

They also indicated that Cheesecake’s oldest secondary concept, Grand Lux Café, has closed one location and plans to shut another by the end of the year. The company’s RockSugar Southeast Asian Kitchen will cease operation by the end of the year.

Two Flower Child units were opened during Q3, and Cheesecake plans to add a Blanco, another of FRC’s concepts, during Q4.

Overall, Cheesecake posted a net loss for Q3 of $35.9 million, compared with a year-ago net profit of $27 million. Revenues totaled $517.7 million, down 11.7%.

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