In an uncertain economy, The Cheesecake Factory remains predictable

The chain delivered another quarter of steady growth and few surprises. "Operators were in full control," said CFO Matthew Clark.
Cheesecake Factory
Same-store sales rose 2.5% in the fourth quarter. | Photo: Shutterstock

Industry observers looking for a drastic change in consumer behavior or a desperate bid to drive traffic won’t find it at The Cheesecake Factory.

The 216-unit casual-dining chain in the fourth quarter was the picture of stability, a word that was used by executives 12 times during a check-in with analysts Wednesday.

Same-store sales for the fourth quarter rose 2.5% year over year on 7.3% pricing, flat traffic and mix of negative 4.9%. 

“It was a really strong quarter from start to finish, to be honest,” said CFO Matthew Clark. “Operators were in full control through the quarter. It was very predictable and overall right on track.”

Both traffic and mix improved slightly over the prior quarter. And the chain expects to see those numbers continue to tick up in 2024. 

“We’ve seen very stable consumer behavior in the last six to nine months,” Clark said. He added that customers aren’t so much managing checks as they are returning to normal spending habits after indulging themselves in recent years.

Other areas of stability were labor, thanks to lower turnover and slowing wage growth, and commodity inflation, which the chain expects to be in the low single digits for Q1.

The only thing seemingly out of Cheesecake’s control was the weather. Storms and other winter events in January are expected to reduce revenues by 1.5% to 2% in the current quarter, Clark said. But the chain still expects to finish the year with same-store sales growth in the low single digits.

The Calabasas, Calif.-based chain has been nothing if not steady coming out of the pandemic. Same-store sales growth over the past four quarters was 2.5%, 2.4%, 1.5% and 5.7%. And though much of that growth has come from higher prices, it has repeatedly said its customers are simply settling back into a pre-pandemic baseline. And unlike some of its casual-dining competitors, Cheesecake rarely discounts to drive traffic. 

That said, the chain has shown a willingness to experiment on the marketing front as of late. In June, it debuted its first loyalty program, Cheesecake Rewards. Membership continues to exceed the company’s expectations, Clark said Wednesday, but don’t expect to see results any time soon: Cheesecake is taking a “very deliberate approach” to the program and doesn’t expect to see a measurable impact on sales for at least the first year. 

“We are continuing to test acquisition tactics and activation campaigns to better understand the key elements that are resonating with Rewards members, and most effectively increasing membership enrollment, engagement, and driving frequency,” Clark said.

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