The Cheesecake Factory’s Flower Child is beginning to blossom.
Same-store sales at the 38-unit fast-casual concept surged 11% year over year in the fourth quarter, pushing average weekly sales to $83,000, an increase of 10%.
Executives said sales had been gaining momentum throughout the year and credited a few different efforts for that growth. The introduction of catering and the relaunch of the brand’s rewards program drove sales, and the addition of kitchen display systems helped improve execution, said Cheesecake CFO Matt Clark. And overall awareness of the brand is growing as it opens more locations.
“I think it's not one piece, but as an aggregate, each one of those pieces continues to contribute a couple of points to the growing comp base,” Clark said during an earnings call Wednesday.
He noted that the company does not expect Flower Child’s same-store sales to stay in the double digits forever. But the performance has reinforced Cheesecake’s belief that the concept is ready to grow. It plans to open six to seven more Flower Childs this year, and has previously said there could be more than 200 of them nationwide someday.
The Cheesecake Factory acquired Flower Child along with the rest of Phoenix-based Fox Restaurant Concepts in 2019. Flower Child specializes in organic, locally sourced fare and offers salads, bowls, entrees and sides.
It’s the lone fast-casual in Cheesecake’s portfolio and is viewed as a good complement to the company’s full-service brands. President David Gordon noted that Flower Child customers may visit multiple times a week as opposed to four or five times a year for The Cheesecake Factory. And its traffic skews toward lunch and off-premise.
As for Flower Child’s parent brand, business kept rolling right along in the fourth quarter. Same-store sales at The Cheesecake Factory rose 1.7% in the fourth quarter, and restaurant-level margins expanded to 18.4%, their highest level in over seven years. The company also reported that customer satisfaction scores are at an all-time high.
The performance was notable given the difficulties other restaurant chains have reported to start the year. Many have observed that consumers seem anxious and fatigued amid bad weather and rising inflation.
If that is the case, The Cheesecake Factory has not noticed.
“I think people still want to go out and have an experience regardless,” Clark said. “If they’re cutting back, it might be more on the quick-serve side or those types of things.”
The Calabasas, California-based chain has prided itself on its predictability in recent years. Since the first quarter of 2023, its same-store sales have been negative only once. And investors have rewarded that consistency: Its stock is up more than 56% over the past year.
On Wednesday, Cheesecake revealed that it’s rolling out a new menu with more than 20 new items, including a smashburger, roasted baby carrots and Asian cucumbers. Like previous iterations, the menu covers a wide range of cuisine types and price points, from appetizers at $12.95 to steak frites for $31, said Gordon.
Same-store sales at 42-unit North Italia, another of Cheesecake’s Fox concepts, rose 1%. Executives said traffic at the Italian concept has trended similarly to Cheesecake, but that alcohol sales have declined more sharply.
"We feel like everything is really very consistent at this point in time and just a little bit of a differential in the alcohol mix component," Clark said.
The company opened nine restaurants in the quarter—two Cheesecake Factories, three North Italias, two Flower Childs and two other Fox restaurants. And it plans to open 25 new restaurants this year across all of its brands, one more than previously expected.
That includes as many as three to four Cheesecake Factories, six to seven North Italia locations, six to seven Flower Child locations, and as many as eight to nine Fox restaurants.
The company has been ramping up the growth of the Fox concepts and building a pipeline of managers and chefs to support them. It intends to expand North Italia and Flower Child at a rate of 20% per year.
“We're working on these pipelines now for years and very confident that we have the right talent in the right place to be able to hit those targets,” Gordon said.
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