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Cheesecake Factory Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 10, 2012 05:22PM
Cheesecake Factory Inc. (CAKE) filed Quarterly Report for the period ended 2012-07-03. The Cheesecake Factory Incorporated has a market cap of $1.8 billion; its shares were traded at around $32.88 with a P/E ratio of 18.9 and P/S ratio of 1. The Cheesecake Factory Incorporated had an annual average earning growth of 11.4% over the past 10 years. GuruFocus rated The Cheesecake Factory Incorporated the business predictability rank of 4-star.
Highlight of Business Operations:Borrowings under the Facility bear interest at a floating rate based on LIBOR, plus a spread ranging from 1.75% to 2.25%, depending on our ratio of debt plus eight times rent (Adjusted Debt) to trailing 12-month earnings before interest, taxes, depreciation, amortization, rent and noncash stock option expense (EBITDAR), as defined in the agreement. In addition, we pay a commitment fee ranging from 0.3% to 0.4%, also depending on our ratio of Adjusted Debt to EBITDAR, calculated on the average unused portion of the Facility.
Restaurant sales increased 6.3% to $442.9 million compared to $416.5 million in the prior year second quarter. Comparable sales at The Cheesecake Factory and Grand Lux Cafe restaurants increased by 1.7%, or $7.0 million, from the second quarter of fiscal 2011, driven primarily by average check growth, as well as an increase in guest traffic of 0.5%. The Cheesecake Factory and Grand Lux Cafe restaurants become eligible to enter our comparable sales calculations in their 19th month of operation. At July 3, 2012, there were eight The Cheesecake Factory restaurants not yet in our comparable sales base.
Comparable sales at The Cheesecake Factory restaurants increased 2.1% from the prior year second quarter driven primarily by an increase in average check, as well as improved guest traffic. We implemented effective menu price increases of approximately 1.0% and 1.3% during the first quarter of fiscal 2012 and third quarter of fiscal 2011, respectively. On a weighted average basis, based on the timing of our menu roll outs within each quarter, The Cheesecake Factory menu included a 2.3% increase in pricing for the thirteen weeks ended July 3, 2012. This increase in menu pricing was partially offset by changes in menu mix due to check management by our guests, as well as some shifting of menu preferences as our guests try new items.
Restaurant sales increased 5.4% to $867.9 million compared to $823.5 million for the same period of the prior year. Comparable sales at The Cheesecake Factory and Grand Lux Cafe restaurants increased by 2.0%, or $16.4 million, from the first half of fiscal 2011, driven primarily by an increase in guest traffic of 1.2%.
Total restaurant operating weeks increased 4.2% to 4,437 for the twenty-six weeks ended July 3, 2012. Average sales per restaurant operating week increased approximately 1.2% to $195,600 compared to the same period of fiscal 2011. A busy holiday week that usually falls in the first fiscal quarter was captured as the 53rd week of fiscal 2011, thereby shifting a high-volume sales week out of the first quarter of fiscal 2012 and replacing it with an average sales week. This negatively impacted our average weekly sales in the first half of fiscal 2012 by approximately 0.9% and was partially offset by strong performance at our newer restaurants not yet in our comparable sales base.
Stocks Discussed: CAKE,