Q4 2025 Cheesecake Factory Inc Earnings Call

February 18, 2026

Operator: Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome you to The Cheesecake Factory Incorporated Q4 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, simply press star one again. Thank you. I would now like to turn the conference over to Etienne Marcus, Vice President, Investor Relations and Finance. Etienne, please go ahead.

Speaker #1: Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome you to the Cheesecake Factory Incorporated, fourth quarter 2025 earnings conference call.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question at that time, simply press star, followed by the number 1 on your telephone keypad.

Speaker #1: And if you'd like to withdraw that question, simply press star 1 again. Thank you. I would now like to turn the conference over to Etienne Marcus, Vice President, Investor Relations and Finance.

Speaker #1: Etienne, please go ahead.

Speaker #2: Good afternoon, and welcome to our fourth quarter fiscal 2025 earnings call. On the call with me today are David Overton, our Chairman and Chief Executive Officer; David Gordon, our President; and Matt Clark, our Executive Vice President and Chief Financial Officer.

Etienne Marcus: Good afternoon, and welcome to our fourth quarter fiscal 2025 earnings call. On the call with me today are David Overton, our Chairman and Chief Executive Officer, David Gordon, our President, and Matt Clark, our Executive Vice President and Chief Financial Officer. Before we begin, let me quickly remind you that during this call, items will be discussed that are not based on historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may be materially different from those stated or implied in forward-looking statements as a result of the factors detailed in today's press release, which is available on our website at investors.thecheesecakefactory.com, and in our filings with the Securities and Exchange Commission.

Speaker #2: Before we begin, let me quickly remind you that during this call, items will be discussed that are not based on historical facts, and are considered forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995.

Speaker #2: Actual results will be materially different from those stated or implied in forward-looking statements as a result of the factors detailed in today's press release, which is available on our website at investors.thecheesecakefactory.com and in our filings with the Securities and Exchange Commission.

Speaker #2: All forward-looking statements made on this call speak only as of today's date, and the company undertakes no duty to update any forward-looking statements. In addition, during this conference call, we will be presenting results on an adjusted basis, which exclude acquisition-related items, impairment of assets and lease termination expenses, and other items.

Etienne Marcus: All forward-looking statements made on this call speak only as of today's date, and the company undertakes no duty to update any forward-looking statements. In addition, during this conference call, we will be presenting results on an adjusted basis, which exclude acquisition-related items, impairment of assets, and lease termination expenses, and other items. Explanations of our use of non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures appear in our press release on our website, as previously described. David Overton will begin today's call with some opening remarks, and David Gordon will provide an operational update. Matt will then review our fourth quarter financial results and provide commentary on our financial outlook before opening the call up to questions. With that, I'll turn the call over to David Overton.

Speaker #2: Explanations of our use of non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures appear in our press release on our website as previously described.

Speaker #2: David Overton will begin today's call with some opening remarks, and David Gordon will provide an operational update; Matt will then review our fourth quarter financial results and provide commentary on our financial outlook before opening the call up to questions.

Speaker #2: With that, I'll turn the call over to David Overton.

Speaker #3: Thank you, Etienne. We close out the year with a solid fourth quarter, delivering stable top-line performance and profitability. While the restaurant industry continued to face a more challenging operating environment, including weather-related impacts, our business remained steady, with revenue for the quarter finishing within our expected range.

David Overton: Thank you, Etienne. We closed out the year with a solid fourth quarter, delivering stable top-line performance and profitability. While the restaurant industry continued to face a more challenging operating environment, including weather-related impacts, our business remained steady, with revenue for the quarter finishing within our expected range. I'm very proud of how our teams navigated through the environment and continued to deliver delicious, memorable experiences for our guests. Our operators managed the factors within their control exceptionally well, driving year-over-year improvements in labor productivity, wage management, retention, and guest satisfaction. This strong operational execution supported margins and adjusted diluted net income per share, finishing toward the higher end of our expectations. This performance reflects the resilience of our high-quality concepts and the strength of our operators. Reflecting on 2025, it was a year of meaningful progress for our company.

Speaker #3: I'm very proud of how our teams navigated through the environment and continue to deliver delicious, memorable experiences for our guests. Our operators managed the factors within their control exceptionally well, driving year-over-year improvements in labor productivity, wage management, retention, and guest satisfaction.

Speaker #3: This strong operational execution supported margins and adjusted diluted net income per share, finishing toward the higher end of our expectations. This performance reflects the resilience of our high-quality concepts and the strength of our operators.

Speaker #3: Reflecting on 2025, it was the year of meaningful progress for our company. Despite a dynamic macro backdrop and a highly competitive restaurant landscape, we delivered strong results, sales growth across our core concepts, and the most new restaurant openings in a single year supported record annual revenue and adjusted diluted earnings per share.

David Overton: Despite a dynamic macro backdrop and a highly competitive restaurant landscape, we delivered strong results. Sales growth across our core concepts and the most new restaurant openings in a single year supported record annual revenue and adjusted diluted earnings per share, and our operators' consistent execution throughout the year drove meaningful profitability growth. Adjusted restaurant-level profit margins at The Cheesecake Factory increased 60 basis points year-over-year to 17.6%, with margin expansion also realized at North Italia and Flower Child. Culinary innovation remains a core strength and an important differentiator for our business. The new menu items we introduced across a wide range of categories and price points continue to resonate well with guests and support our broad appeal. These offerings reinforce the breadth and the value of our menu while keeping it relevant and competitively positioned without relying on discounting.

Speaker #3: And our operators' consistent execution throughout the year drove meaningful profitability growth. Adjusted restaurant-level profit margins at The Cheesecake Factory increased 60 basis points year-over-year to 17.6%.

Speaker #3: With margin expansion also realized at North Italia and Flower Child. Culinary innovation remains a core strength and an important differentiator for our business. The new menu items we introduced across a wide range of categories and price points continue to resonate well with guests and support our broad appeal.

Speaker #3: These offerings reinforce the breadth and value of our menu, while keeping it relevant and competitively positioned without relying on discounting. Turning to development, during the fourth quarter, we opened two Cheesecake Factory restaurants, two North Italia locations, and three FRC restaurants.

David Overton: Turning to development, during Q4, we opened 2 Cheesecake Factory restaurants, 2 North Italia locations, and 3 FRC restaurants. Subsequent to quarter end, we opened 1 Flower Child and closed 4 restaurants, including 2 Cheesecake Factory restaurants, 1 Grand Lux Cafe, and 1 FRC restaurant. With 7 new restaurants opened in Q4, we finished the year with 25 new openings, delivering approximately 7% unit growth through 2025. Looking ahead, we expect to open as many as 26 restaurants in 2026. With a strong development pipeline in place, we remain confident in our ability to achieve our development goals. We also anticipate 1 to 2 Cheesecake Factory restaurants to open internationally under licensing agreements. Finally, underscoring our confidence in the strength and consistency of the business, we announced an increase to our share repurchase authorization and raised our quarterly dividend for Q1.

Speaker #3: Subsequent to quarter-end, we opened one Flower Child and closed four restaurants, including two Cheesecake Factory restaurants, one Grand Luxe Café, and one FRC restaurant.

Speaker #3: With seven new restaurants opened in the fourth quarter, we finished the year with 25 new openings, delivering approximately 7% unit growth for 2025. Looking ahead, we expect to open as many as 26 restaurants in 2026. With a strong development pipeline in place, we remain confident in our ability to achieve our development goals.

Speaker #3: We also anticipate one to two Cheesecake Factory restaurants to open internationally under licensing agreements. Finally, underscoring our confidence in the strength and consistency of the business, we announced an increase to our share repurchase authorization.

Speaker #3: And raised our quarterly dividend for the first quarter. These decisions reflect our disciplined approach to capital allocation and our ongoing commitment to returning capital to shareholders, while continuing to invest thoughtfully in the long-term growth of our company.

David Overton: These decisions reflect our disciplined approach to capital allocation and our ongoing commitment to returning capital to shareholders, while continuing to invest thoughtfully in the long-term growth of our company. With that, I will now turn the call over to David Gordon to provide an operational update.

Speaker #3: With that, I will now turn the call over to David Gordon to provide an operational update.

Speaker #2: Thank you, David. Through strong operational leadership and disciplined execution, our teams drove meaningful performance improvements this quarter, including continued gains in overall guest satisfaction.

David Gordon: Thank you, David. Through strong operational leadership and disciplined execution, our teams drove meaningful performance improvements this quarter, including continued gains in overall guest satisfaction. This progress was underpinned by our strong staffing position and further advancements in our industry-leading retention across both hourly staff and management. This stability enables our operators to reinforce the core operational standards that define The Cheesecake Factory, so our guests consistently experience the exceptional hospitality that we're known for. As David noted earlier, our recent menu additions have been well received, and we are building on that momentum by refreshing our bites and expanding our bowl options as part of our current menu rollout. Results have been encouraging, with year-over-year growth in appetizer attachment rates and improved entree ordering patterns. Moving on to Cheesecake Rewards, we have made meaningful progress during the past 12 months, highlighted by strong membership growth and improved engagement.

Speaker #2: This progress was underpinned by our strong staffing position and further advancements in our industry-leading retention across both hourly staff and management. This stability enables our operators to reinforce the core operational standards that define the Cheesecake Factory, so our guests consistently experience the exceptional hospitality that we're known for.

Speaker #2: As David noted earlier, our recent menu additions have been well received, and we are building on that momentum by refreshing our bites and expanding our bowl options as part of our current menu rollout.

Speaker #2: Results have been encouraging, with year-over-year growth in appetizer attachment rates and improved entrée ordering patterns. Moving on to Cheesecake Rewards, we have made meaningful progress during the past 12 months.

Speaker #2: Highlighted by strong membership growth and improved engagement, we've continued to enhance the guest experience while strengthening our technology and team capabilities, giving us better insight into member behavior.

David Gordon: We've continued to enhance the guest experience while strengthening our technology and team capabilities, giving us better insight into member behavior. As we look ahead, we remain confident in the program's trajectory, and we will use our expanded capabilities to further refine offers and deepen member engagement. To support this evolution, we expect to launch a dedicated rewards app in the coming months, with the objective of creating a more seamless and connected experience for our guests. I'll now turn to sales trends. Industry sales decelerated in the fourth quarter, as reflected by the Black Box Casual Dining Index, declining sequentially by 410 basis points from the third quarter. The Cheesecake Factory's comparable sales were -2.2% in the fourth quarter, down from 0.3% in the third quarter, demonstrating relative stability in comparison to the industry's sequential declines.

Speaker #2: As we look ahead, we remain confident in the program's trajectory and we will use our expanded capabilities to further refine offers and deepen member engagement.

Speaker #2: To support this evolution, we expect to launch a dedicated rewards app in the coming months. With the objective of creating a more seamless and connected experience for our guests.

Speaker #2: I'll now turn to sales trends. Industry sales decelerated in the fourth quarter, as reflected by the Black Box casual dining index declining sequentially by 410 basis points from the third quarter.

Speaker #2: The Cheesecake Factory's comparable sales were negative 2.2% in the fourth quarter, down from 0.3% in the third quarter, demonstrating relative stability in comparison to the industry's sequential declines.

Speaker #2: Adjusted annualized AUVs were $12.2 million for the quarter, supported by an off-premise sales mix of 22%, a slight improvement from recent quarters. North Italia fourth quarter annualized AUVs totaled $7.6 million.

David Gordon: Adjusted annualized AUVs were $12.2 million for the quarter, supported by an off-premise sales mix of 22%, a slight improvement from recent quarters. North Italia fourth quarter annualized AUVs totaled $7.6 million. Comparable sales declined 4%, reflecting broader industry sales trends, continued pressure from sales transfer related to recently opened restaurants, as well as the lingering impact of the Los Angeles fires. We remain focused on disciplined operational execution and investing in our people. With manager and hourly staff retention remaining near historical highs, we are confident in our ability to compete effectively in a more challenging and competitive environment. In the fourth quarter, we opened two new North Italia restaurants to strong demand, with aggregate average weekly sales exceeding $182,000, for an annualized AUV of over $9 million.

Speaker #2: Comparable sales declined 4%, reflecting broader industry sales trends, continued pressure from sales transfer related to recently opened restaurants, as well as the lingering impact of the Los Angeles fires.

Speaker #2: We remain focused on disciplined operational execution and investing in our people. With manager and hourly staff retention remaining near historical highs, we are confident in our ability to compete effectively in a more challenging and competitive environment.

Speaker #2: In the fourth quarter, we opened two new North Italia restaurants to strong demand. With aggregate average weekly sales exceeding 182,000 dollars for an annualized AUV of over 9 million dollars.

Speaker #2: These results reinforce our confidence in the significant demand for an on-trend, contemporary Italian concept like North Italia. Restaurant-level profit margin for the adjusted mature North Italia locations was a solid 17.5% for the quarter, bringing the full year average to 17%.

David Gordon: These results reinforce our confidence in the significant demand for an on-trend, contemporary Italian concept like North Italia. Restaurant level profit margin for the adjusted mature North Italia locations was a solid 17.5% for the quarter, bringing the full year average to 17%, right at the midpoint of our long-term objective of 16% to 18%. Flower Child continued to perform exceptionally well, and meaningfully outpaced the fast casual segment. Fourth quarter comparable sales increased 4% for a two-year comp sales increase of 15%. This strong sales performance translated into annualized AUVs of $4.3 million for the quarter and $4.6 million for the full year.

Speaker #2: Right at the midpoint of our long-term objective of 16% to 18%. Flower Child continued to perform exceptionally well, and meaningfully outpaced the fast-casual segment.

Speaker #2: Fourth quarter comparable sales increased 4%, for a two-year comp sales increase of 15%. This strong sales performance translated into annualized AUVs of 4.3 million dollars for the quarter, and 4.6 million dollars for the full year.

Speaker #2: Restaurant-level profit margin for the adjusted mature Flower Child locations was 17.5% for the fourth quarter, bringing the full-year average to an impressive 18.5%.

David Gordon: Restaurant-level profit margin for the adjusted mature Flower Child locations was 17.5% for the fourth quarter, bringing the full year average to an impressive 18.5%. Lastly, we expanded our FRC portfolio with the opening of three new restaurants in existing markets, including a Culinary Dropout and a Henry. All three restaurants opened to strong demand, with average weekly sales equating to an annualized AUV of over $8.7 million. With that, let me turn the call over to Matt for our financial review.

Speaker #2: And lastly, we expanded our FRC portfolio with the opening of three new restaurants in existing markets, including a culinary dropout and a Henry. All three restaurants opened a strong demand, with average weekly sales equating to an annualized AUV of over 8.7 million dollars.

Speaker #2: And with that, let me turn the call over to Matt for our financial review.

Speaker #3: Thank you, David. Let me first provide a high-level recap of our fourth quarter results versus our expectations I outlined last quarter. Total revenues were $961.6 million.

Matt Clark: Thank you, David. Let me first provide a high-level recap of our fourth quarter results versus our expectations I outlined last quarter. Total revenues were $961.6 million, inclusive of $17.3 million of gift card breakage revenue as a result of a change in historical redemption patterns. Excluding this benefit, fourth quarter revenues of $944.3 million finished within the range we provided. Adjusted net income margin was 5.1%, and adjusted diluted earnings per share was $1, both finishing toward the higher end of our expectations. We returned $24 million to our shareholders in the form of dividends and stock repurchases. For the fiscal year, we delivered total revenues of $3.75 billion, up 5% from the prior year.

Speaker #3: Inclusive of 17.3 million dollars of gift card breakage revenue, as a result of a change in historical redemption patterns. Excluding this benefit, fourth quarter revenues of 944.3 million dollars finished within the range we provided.

Speaker #3: Adjusted net income margin was 5.1%, and adjusted diluted earnings per share was $1.00, both finishing toward the higher end of our expectations. We returned $24 million to our shareholders in the form of dividends and stock repurchases.

Speaker #3: For the fiscal year, we delivered total revenues of 3.75 billion dollars. Up 5% from the prior year. Adjusted diluted earnings per share increased 10% year over year, to 3 dollars and 77 cents.

Matt Clark: Adjusted diluted earnings per share increased 10% year-over-year to $3.77, and adjusted EBITDA totaled $354 million, and we returned more than $206 million to shareholders in the form of dividends and stock repurchases in 2025. Now turning to some more specific details around the quarter. Fourth quarter total sales at the Cheesecake Factory restaurants were $681.4 million, up 2% from the prior year. Excluding the gift card breakage benefit, total sales at the Cheesecake Factory restaurants were $664.2 million. Comparable sales, which is not impacted by the gift card breakage adjustment, declined 2.2% versus the prior year. Total sales for North Italia were $88.2 million, up 8% from the prior year period.

Speaker #3: And adjusted EBITDA totaled 354 million dollars. And we returned more than 206 million dollars to shareholders, in the form of dividends and stock repurchases, in 2025.

Speaker #3: Now turning to some more specific details around the quarter. Fourth quarter total sales at The Cheesecake Factory restaurants were $681.4 million, up 2% from the prior year.

Speaker #3: Excluding the gift card breakage benefit, total sales at The Cheesecake Factory restaurants were $664.2 million. Comparable sales—which are not impacted by the gift card breakage adjustment—declined 2.2% versus the prior year.

Speaker #3: Total sales for North Italia were 88.2 million dollars. Up 8% from the prior year period. Other FRC sales totaled 99.4 million dollars, up 17% from the prior year, and sales for operating week were 139,100 dollars.

Matt Clark: Other FRC sales totaled $99.4 million, up 17% from the prior year, and sales per operating week were $139,100. Flower Child sales totaled $45.5 million, up 19% from the prior year, and sales per operating week were $83,400, and external bakery sales were $17.2 million. Now moving to year-over-year expense variance commentary. Specifically, cost of sales decreased 70 basis points, with 40 basis points attributable to the gift card breakage benefit to revenue, with the remainder primarily driven by favorable commodity costs and mix shift, partially offset by higher beef costs. Labor, as a percent of sales, declined 40 basis points, with 60 basis points attributable to the gift card breakage benefit.

Speaker #3: Flower Child sales totaled 45.5 million dollars, up 19% from the prior year, and sales for operating week were 83,400 dollars. And external bakery sales were 17.2 million dollars.

Speaker #3: Now moving to year-over-year expense variance commentary. Specifically, cost of sales decreased 70 basis points, with 40 basis points attributable to the gift card breakage benefit to revenue.

Speaker #3: With the remainder primarily driven by favorable commodity costs and makeshift, partially offset by higher beef costs. Labor, as a percent of sales, declined 40 basis points, with 60 basis points attributable to the gift card breakage benefit.

Speaker #3: The remaining difference was primarily driven by higher group medical expenses, partially offset by the continued improvement in retention, supporting labor productivity gains and wage leverage, as well as lower payroll taxes.

Matt Clark: The remaining difference was primarily driven by higher group medical expenses, partially offset by the continued improvement in retention, supporting labor productivity gains and wage leverage, as well as lower payroll taxes. Other operating expenses declined 20 basis points, with 50 basis points attributable to the gift card breakage benefit, partially offset by timing of marketing spend. G&A, as a percent of sales, increased 70 basis points, primarily driven by the write-down of gift card inventory. Depreciation increased 10 basis points from the prior year. Pre-opening costs were $9.4 million in the quarter, compared to $7.6 million in the prior year period. We opened 7 restaurants during the fourth quarter, versus 9 restaurants in the fourth quarter of 2024. The year-over-year variance reflects differences in the mix of concepts opened during the respective quarters.

Speaker #3: Other operating expenses declined 20 basis points, with 50 basis points attributable to the gift card breakage benefit, partially offset by timing of marketing spend.

Speaker #3: G&A, as a percent of sales, increased 70 basis points, primarily driven by the write-down of gift card inventory. Depreciation increased 10 basis points from the prior year. Pre-opening costs were $9.4 million in the quarter, compared to $7.6 million in the prior year period.

Speaker #3: We opened seven restaurants during the fourth quarter, versus nine restaurants in the fourth quarter of 2024. The year-over-year variance reflects differences in the mix of concepts opened during the respective quarters.

Speaker #3: And in the fourth quarter, we recorded a pre-tax net expense of $24.6 million, related to impairment of assets and lease termination expenses, FRC acquisition-related items, gift card breakage, and gift card inventory adjustments.

Matt Clark: In the fourth quarter, we recorded a pre-tax net expense of $24.6 million related to impairment of assets and lease termination expenses, FRC acquisition-related items, gift card breakage, and gift card inventory adjustments. Q4 GAAP diluted net income per share was $0.60. Adjusted diluted net income per share was $1. Now turning to our balance sheet and capital allocation. The company ended the quarter with total available liquidity of approximately $582.2 million, including a cash balance of $215.7 million, and approximately $366.5 million available on a revolving credit facility.

Speaker #3: Fourth quarter GAAP diluted net income per share was $0.60. Adjusted diluted net income per share was $1.00. Now turning to our balance sheet and capital allocation.

Speaker #3: The company ended the quarter with total available liquidity of approximately $582.2 million, including a cash balance of $215.7 million, and approximately $366.5 million available on the revolving credit facility.

Speaker #3: Total principal amount of debt outstanding was 644 million dollars, including 69 million dollars in principal amount of convertible notes due June 2026, and 575 million dollars in principal amount of convertible notes due 2030.

Matt Clark: Total principal amount of debt outstanding was $644 million, including $69 million in principal amount of convertible notes due June 2026, and $575 million in principal amount of convertible notes due 2030. CapEx totaled approximately $25 million during the fourth quarter for new unit development and maintenance. During the quarter, we completed approximately $11.2 million in share repurchases and returned $12.8 million to shareholders via our dividend. Now let me turn to our outlook. While we will not be providing specific comparable sales and earnings guidance, we will provide our updated thoughts on our underlying assumptions for Q1 and full year 2026....

Speaker #3: Capex totaled approximately $25 million during the fourth quarter for new unit development and maintenance. During the quarter, we completed approximately $11.2 million in share repurchases and returned $12.8 million to shareholders via our dividend.

Speaker #3: Now let me turn to our outlook. While we will not be providing specific comparable sales and earnings guidance, we will provide our updated thoughts on our underlying assumptions for Q1 and the full year 2026.

Speaker #3: Our assumptions factor in everything we know as of today, including net restaurant accounts, quarter-to-date trends, our expectations for the weeks ahead, anticipated impacts associated with holiday shifts, and the recent softness in industry sales trends and the current consumer environment.

Matt Clark: Our assumptions factor in everything we know as of today, including net restaurant counts, quarter-to-date trends, our expectations for the weeks ahead, anticipated impacts associated with holiday shifts, and the recent softness in industry sales trends and the current consumer environment. Specifically, for Q1, we anticipate total revenues to be between $955 million and $970 million. This includes the estimated impact of inclement weather experienced so far in the quarter and 4 restaurant closures that occurred toward the end of January. These closures included two Cheesecake Factories, one Grand Lux Cafe, and one Blanco. Next, at this time, we expect effective commodity inflation of low single digits for Q1, as our broad market basket remains very stable.

Speaker #3: Specifically, for Q1, we anticipate total revenues to be between $955 million and $970 million. This includes the estimated impact of inclement weather experienced so far in the quarter, and four restaurant closures that occurred toward the end of January.

Speaker #3: These closures included two Cheesecake Factories, one Grand Lux Café, and one Blanco. Next, at this time, we expect effective commodity inflation of low single digits for Q1, as our broad market basket remains very stable.

Speaker #3: We are modeling net total labor inflation of low to mid single digits, when factoring in the latest trends in wage rates, and minimum wage increases, as well as other components of labor.

Matt Clark: We are modeling net total labor inflation of low to mid single digits when factoring in the latest trends in wage rates and minimum wage increases, as well as other components of labor. G&A is estimated to be approximately $63 million to $64 million. Depreciation is estimated to be approximately $28 million. We are estimating pre-opening expenses to be approximately $4 million to $5 million. Based on these assumptions, we would anticipate adjusted net income margin to be about 5% at the midpoint of the sales range provided. For modeling purposes, we are assuming a tax rate of approximately 5% to 6% due to the timing of certain discrete items in the quarter and weighted average shares outstanding of approximately 48.5 million.

Speaker #3: G&A is estimated to be approximately 63 million to 64 Depreciation is estimated to be approximately 28 million dollars. We are estimating pre-opening expenses to be approximately 4 million to 5 million dollars.

Speaker #3: Based on these assumptions, we would anticipate adjusted net income margin to be about 5% at the midpoint of the sales range provided. For modeling purposes, we are assuming a tax rate of approximately 5% to 6%, due to the timing of certain discrete items in the quarter, and weighted average shares outstanding of approximately 48.5 million.

Speaker #3: Turning to fiscal 2026, based on similar assumptions and no material operating or consumer disruptions, we anticipate total revenues for fiscal 2026 to be approximately $3.9 billion, at the midpoint of our sensitivity modeling.

Matt Clark: Turning to fiscal 2026, based on similar assumptions and no material operating or consumer disruptions, we anticipate total revenues for fiscal 2026 to be approximately $3.9 billion at the midpoint of our sensitivity modeling. For sensitivity purposes, we are using a range of ±1%. We currently estimate total inflation across our commodity basket, labor, and other operating expenses to be in the low to mid-single-digit range and fairly consistent across the quarters. We are estimating G&A to be about 6.5% of sales, partially driven by our sales growth outlook, impacted by the timing of restaurant openings and closures, as well as periodic true-ups related to stock-based compensation. Depreciation is expected to be about $115 million for the year.

Speaker #3: For sensitivity purposes, we are using a range of plus or minus 1%. We currently estimate total inflation across our commodity basket, labor, and other operating expenses to be in the low to mid single digit range, and fairly consistent across the quarters.

Speaker #3: We are estimating G&A to be about 6.5% of sales, partially driven by our sales growth outlook, impacted by the timing of restaurant openings and closures, as well as periodic true-ups related to stock-based compensation.

Speaker #3: Depreciation is expected to be about $115 million for the year. And given our unit growth expectations, we are estimating pre-opening expenses to be approximately $35 million to $36 million.

Matt Clark: Given our unit growth expectations, we're estimating pre-opening expenses to be approximately $35 million to $36 million. Based on these assumptions, we would expect full year net income margin to be approximately 5% at the sales estimate provided. For modeling purposes, we are assuming a tax rate of approximately 10% and weighted average shares outstanding, relatively flat to 2025. With regard to development, as David stated earlier, we plan to continue accelerating unit growth this year. At this time, we expect to open as many as 26 new restaurants in 2026, with roughly three quarters of those openings planned for the second half of the year. This includes as many as 6 Cheesecake Factories, 6 to 7 North Italias, 6 to 7 Flower Childs, and 7 FRC restaurants.

Speaker #3: Based on these assumptions, we would expect full-year net income margin to be approximately 5% at the sales estimate provided. For modeling purposes, we are assuming a tax rate of approximately 10%, and weighted average shares outstanding relatively flat to 2025.

Speaker #3: With regard to development, as David stated earlier, we plan to continue accelerating unit growth this year. At this time, we expect to open as many as 26 new restaurants in 2026.

Speaker #3: With roughly three-quarters of those openings planned for the second half of the year. This includes as many as six Cheesecake Factories, six to seven North Italias, six to seven Flower Childs, and seven FRC restaurants.

Speaker #3: And we would anticipate approximately 210 million dollars in cash Capex to support unit development, as well as required maintenance on our restaurants. Note, this Capex range includes some new restaurant construction expenses, which may be classified as operating lease assets instead of additions to property equipment in the statement of cash flows.

Matt Clark: We would anticipate approximately $210 million in cash CapEx to support unit development, as well as required maintenance on our restaurants. Note, this CapEx range includes some new restaurant construction expenses, which may be classified as operating lease assets instead of additions to property equipment in the statement of cash flows. In closing, we delivered solid financial and operational performance for both the fourth quarter and full year, reflecting stable top-line performance and strong execution. We also generated a record adjusted EBITDA of $354 million, reinforcing the consistency of the business and supporting disciplined growth and increased capital returns to our shareholders. Our portfolio of high-quality concepts, seasoned operators, and financial position provide a solid foundation as we look ahead. As we move forward into 2026, we remain focused on comparable sales growth, margin expansion, and long-term shareholder value creation.

Speaker #3: In closing, we delivered solid financial and operational performance for both the fourth quarter and full year, reflecting stable top-line performance and strong execution. We also generated a record adjusted EBITDA of $354 million, reinforcing the consistency of the business and supporting disciplined growth and increased capital returns to our shareholders.

Matt Clark: Our portfolio of high-quality concepts, seasoned operators, and financial position provide a solid foundation as we look ahead. As we move forward into 2026, we remain focused on comparable sales growth, margin expansion, and long-term shareholder value creation. With that said, we'll take your questions.

Speaker #3: Our portfolio of high-quality concepts, seasoned operators, and financial position provide a solid foundation as we look ahead. As we move forward into 2026, we remain focused on comparable sales growth, margin expansion, and long-term shareholder value creation.

Speaker #3: With that said, we'll take your questions.

Matt Clark: With that said, we'll take your questions.

Speaker #1: Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star one. We ask that you limit yourself to one question and one follow-up. For any additional questions, please re-queue. And your first question comes from the line of Andy Barish with Jefferies. Please go ahead.

Speaker #1: And if you'd like to withdraw that question, again, press star one. We ask that you limit yourself to one question and one follow-up. For any additional questions, please requeue.

Speaker #1: And your first question comes from the line of Andy Barish with Jefferies. Please go ahead.

Speaker #3: Hey, guys. just, wondering if you can kind of update us on, sort of the go-forward structure with, with FRC and, you know, kind of changes you've made there and, and, you know, what's going on with management team and such.

Andy Barish: Hey, guys. Just wondering if you can kind of update us on sort of the go-forward structure with FRC and, you know, kind of changes you've made there and, and, you know, what's going on with management team and such?

Speaker #4: Sure. Hey, it's Matt. Thanks for the question. Appreciate it. Well, we're—first of all—really pleased with the overall performance of the business unit out of Phoenix. All of the lines of business are meeting or exceeding our expectations.

Matt Clark: ... Sure, hey, it's Matt. Thanks for the question. Appreciate it. Well, we're first of all, really pleased with the overall performance of the business unit out of Phoenix. All of the lines of business are meeting or exceeding our expectations, and I think we'll all look back on this being, you know, one of the most successful restaurant acquisitions. It's right now, it's, you know, steady as it goes. I think, as you know, we put someone in place from Cheesecake to work with the team there in a senior operations role, and that continues to go excellently. And we'll continue to look at opportunities to add benefits via scale or expertise in operations. And at the same time, we'll continue to look at that team to innovate and incubate the way that they have.

Speaker #4: And I think we'll all look back on this being, you know, one of the most successful restaurant acquisitions. Right now, it's, you know, steady as it goes.

Speaker #4: I think, as you know, we put someone in place from Cheesecake to work with the team there in a senior operations role, and that continues to go.

Speaker #4: excellently. And we're, we'll continue to look at, opportunities to add benefits via scale or expertise and, and operations. And at the same time, we'll continue to look at that team to, to innovate and incubate the way that they, that they have.

Speaker #4: So, I think we're really pleased with where things are at, and we'll continue to try to create value through all of those concepts.

Matt Clark: So I think we're really pleased with where things are at, and we'll continue to try to create value through all of those concepts.

Brian Harbour: Great. Thank you very much.

Andy Barish: Great. Thank you very much.

Speaker #3: Great. Thank you very much.

Speaker #1: Your next question comes from the line of Sarah Senator with Bank of America. Please go ahead.

Operator: Your next question comes from the line of Sarah Senatore with Bank of America. Please go ahead.

Speaker #5: Thank you. Just the— the first question is, you know, you mentioned strong execution that supported margins. I guess, given the restaurant-level margin was quite healthy, and also that you've seen, I think, a positive response to some of your, maybe, more accessible price point additions to menus, is there an opportunity to invest in value or at least to sort of market value more centrally as you communicate with your consumers?

Sara Senatore: Thank you. The first question is, you know, you mentioned strong execution that supported margins. You know, I guess given the restaurant level margin was quite healthy and also that you've seen, I think, a positive response to some of your maybe more accessible price point additions to menus, is there an opportunity to invest in value or, at least to sort of market value as, more centrally as you, communicate with your consumers? Just something we've seen is, you know, other casual diners kind of emphasizing abundant value or, you know, quality value. You know, just given it looks like you have a little bit of room on the margin, and then I do have a quick follow-up.

Speaker #5: Just something we've seen is, you know, other casual diners kind of emphasizing abundant value or, you know, quality value. You know, just given it looks like you have a little bit of follow-up.

Speaker #4: Sure. Hi, Sarah. This is David Gordon. Thank you for the question. Certainly, we're very pleased with the reception the bites and bowls have gotten across all of the restaurants.

David Gordon: Sure. Hi, Sarah, this is David Gordon. Thank you for the question. Certainly, we're very pleased with the reception the bites and bowls have gotten across all of the restaurants. And when we rolled those out, we did roll them out with a little heightened sense of awareness. We put them on a separate menu card, so guests could see them right away. We marketed them a little more clearly in all of our social channels, and I think that's one of the reasons we had such great awareness. And we're seeing strong attachment rates because they do provide great Cheesecake Factory value, and that value comes certainly in the price point on the bowls, but also on the portion size on the bites and bowls. They're great for sharing. We're seeing people attach the bites to their check.

Speaker #4: And, when we rolled those out, we did roll them out with a little heightened sense of awareness. We put them on a separate menu card, so guests could see them right away.

Speaker #4: We marketed them a little more clearly in all of our social channels, and, I think that's one of the reasons we had such great awareness.

Speaker #4: And we're seeing strong attachment rates because they do provide great Cheesecake Factory value. And that value comes certainly in the price point on the bowls, but also on the portion size on the bites and bowls.

Speaker #4: They're great for sharing. We're seeing people attach the bites to their check, as we look to continue to roll out the menu, which we're doing right now.

David Gordon: As we look to continue to roll out the menu, which we're doing right now, we have some new bites and bowls that are happening. So we're gonna lean into that value wherever we can and maybe move some of those items into the main menu and create another menu card so that we have that heightened sense of awareness for guests that are dining in or through our social channels.

Speaker #4: We have some new bites and bowls that are happening, so we're going to lead into that value wherever we can, and maybe move some of those items into the main menu and create another menu card so that we have that heightened sense of awareness for guests that are dining in, or through our social channels.

Speaker #5: Great. Thank you. and then, just, to, to confirm the, the North Italia, same-store sales, so I guess it's more of a, a housekeeping. I think last quarter you said sales transfer was maybe 2 percentage points, and the fires were, were one.

Sara Senatore: Great. Thank you. Just to confirm the North Italia same store sales, I guess it's more of a housekeeping. I think last quarter, you said sales transfer was maybe 2 percentage points, and the fires were 1. Are those roughly the same magnitude? Similarly, you know, the day part mix, more weakness in the lunch, are all those factors kind of consistent this, in the fourth quarter as well?

Speaker #5: A-are those roughly the same magnitude and, and similarly, you know, the day part mixed, more weakness in the lunch, or, or, or is, are all those factors kind of, consistent, this in the fourth quarter as well?

Speaker #4: Yeah. Sarah, this is Matt. I would say yes. That, that, that's very true. And I think the, the positive news there, though, is that as we're, you know, midway through the first quarter, we're seeing evidence that there was truly the cannibalization in the fire as, as the comp is recovering.

Matt Clark: Yeah, Sarah, this is Matt. I would say yes. That's very true. And I think that the positive news there, though, is that as we're, you know, midway through Q1, we're seeing evidence that there was truly the cannibalization and the fire as the comp is recovering. So positive there. Just to double down on what David Gordon said, I think the strategy is working on menu innovation. We said we would see some negative mix. We did, but in both December and now again in January, we're seeing incident rates year-over-year growing, and that means the guests are coming in and seeing tremendous value, right? Because they're ordering those items at a higher rate. So I think we're doing everything we thought we would do, and it's working.

Speaker #4: So, positive there. Just to double down on what David Gordon said, I think the strategy is working on menu innovation. We said we would see some negative mix.

Speaker #4: We did. But in both, December and now again in January, we're seeing incident rates, year over year, growing. And that means the guests are coming in and, and seeing tremendous value, right, because they're, they're ordering those, those items at a, at a higher rate.

Speaker #4: So I think we're, we're doing everything we thought. We, we would do. And it's working.

Speaker #5: Thank you.

Sara Senatore: Thank you.

Speaker #1: Your next question comes from the line of Brian Harbor with Morgan Stanley. Please go ahead.

Operator: Your next question comes from the line of Brian Harbor with Morgan Stanley. Please go ahead.

Speaker #6: Yeah. Hey, good afternoon, guys. I'm Matt. Just a quick one—do you have a rough estimate for, kind of, how much the weather impact was in this current quarter?

Brian Harbour: Yeah. Hey, good afternoon, guys. Matt, just a quick one. Do you have a rough estimate for kind of how much the weather impact was in this current quarter?

Speaker #4: You're talking about Q1, Brian, just to confirm?

Matt Clark: You're talking about Q1, Brian, just to confirm?

Brian Harbour: Yes. Like, how much-

Speaker #6: Yes. Like how much we factored into your guide?

Matt Clark: Sure.

Brian Harbour: is factored into your guide?

Speaker #4: Sure. Yeah, for sure. So what we did is to really look at it on a net basis, 'cause clearly there, you know, every year there's inclement weather.

Matt Clark: Yeah, for sure. So what we did is to really look at it on a net basis, because clearly there, you know, every year there's inclement weather. And right now, the weather to date through Q1, we believe is about a 1% net impact, negative net impact on the entire quarter. So that assumes, you know, no more, no more weather impact. We did see, you know, some record closures. I think we probably had 120 restaurants closed on the peak day, so it was pretty profound. And so, yeah, so that's built into it, though.

Speaker #4: And, and right now, the weather to date through Q1, we believe is about a 1% net impact negative, net impact, on the entire quarter.

Speaker #4: So that assumes, you know, no more, no more weather impact. We, we did see, you know, some record closures. I think we probably had 120 restaurants closed on the peak day.

Speaker #4: So it, it was pretty profound. And so, yeah. So that's ba that's built into it, though.

Speaker #6: Okay. Understood. W-what, y-you know, you talked about kind of evolving the, the bites and bowls. What's, what's done best on that menu? How are you sort of, you know, shifting that?

Brian Harbour: Okay, understood. What, you know, you talked about kind of evolving the bites and bowls. What's done best on that menu? How are you sort of, you know, shifting that? Or, you know, what are you seeing customers gravitate to?

Speaker #6: Or, you know, what are you seeing customers gravitate to?

Speaker #4: I think everything has been very, very popular, to be honest. So, it's not one particular item, but a couple of the bowls have done very, very well.

David Gordon: I think everything has been very, very popular, too, to be honest. So, it's not one particular item, but a couple of the bowls have done very, very well. All the bites have done well. So, you know, that large menu variety is what people love about Cheesecake Factory, and they seem to be enjoying the bites and the bowls the exact same way.

Speaker #4: All the bites have done well. So, you know, that large menu variety is what people love about Cheesecake Factory, and they seem to be enjoying the bites and the bowls the exact same way.

Speaker #4: I personally think the truffle fries were the best, Brian.

Matt Clark: I personally think the truffle fries are the best, Brian.

Speaker #1: Your next question comes from the line of Drew North with Baird. Please go ahead.

Operator: Your next question comes from the line of Drew North with Baird. Please go ahead.

Speaker #7: Great. Thanks for taking the question. I wanted to circle back to your comments on the broader consumer environment. You highlighted the slowdown in industry trends from Q3 and volatility in Q1 to date, particularly due to weather.

Jeffrey Bernstein: ... Great. Thanks for taking the question. I wanted to circle back to your comments on the broader consumer environment. You highlighted the slowdown in industry trends from Q3 and volatility in Q1 to date, particularly due to weather. So at this point, when you look at the business from an underlying perspective, do you believe you've seen any fundamental change in the consumer spending backdrop at this point? And maybe what do you believe has caused some of the softer industry trends in recent months? And then maybe just what does your current outlook for the balance of the year contemplate as it relates to the external environment, given all the puts and takes out there? Thank you.

Drew North: ... Great. Thanks for taking the question. I wanted to circle back to your comments on the broader consumer environment. You highlighted the slowdown in industry trends from Q3 and volatility in Q1 to date, particularly due to weather. So at this point, when you look at the business from an underlying perspective, do you believe you've seen any fundamental change in the consumer spending backdrop at this point? And maybe what do you believe has caused some of the softer industry trends in recent months? And then maybe just what does your current outlook for the balance of the year contemplate as it relates to the external environment, given all the puts and takes out there? Thank you.

Speaker #7: So at this point, when you look at the business from an underlying perspective, do you believe you've seen any fundamental change in the consumer spending backdrop at this point?

Speaker #7: And maybe, what do you believe has caused some of the softer industry trends in recent months? And then, maybe just, what does your current outlook for the balance of the year contemplate as it relates to the external environment, given all the puts and takes out there?

Speaker #7: Thank you.

Speaker #4: Sure. Drew, great, great question. This is, this is Matt. I think it's a dial back to our last call. I think we gave some color on why we think the consumer sentiment would be soft for the fourth quarter.

Matt Clark: Sure, Drew. Great, great question. This is Matt. I think it's a dial back to our last call. I think we gave some color on why we think the consumer sentiment would be soft for the fourth quarter. You know, and if you kind of think about where the comp came in for Cheesecake, you know, we said we thought it would be about a 1% delta in terms of real performance from Q3. We had about 1% of weather impact in Q4 and about 50 basis points of a holiday shift impact. So pretty much right where we would have anticipated it to be. Again, many factors in terms of whether you want to believe it's the K economy or the government shutdown, and we have a lot of historical data to understand those trends.

Speaker #4: You know, and if you kind of think about where the comp came in for Cheesecake, you know, we said we thought it would be about a 1% delta in terms of real performance from Q3.

Speaker #4: We had about 1% of weather impact in Q4 and about 50 basis points of a holiday shift impact. So pretty much right where we would have anticipated it to be.

Speaker #4: Again, many factors, in terms of whether you wanna believe it's the key economy or the government shutdown. And we have a lot of historical data to understand those trends.

Speaker #4: I do think, coming out into the first quarter here, that our performance is, you know, notably better. And I think the environment, I don't know.

Matt Clark: I do think coming out into the first quarter here, that our performance is, you know, notably better. And I think the environment, I don't know, I can't really speak to other companies, but I think our performance, if you interpolate the guidance, is more like what we saw in Q2 of last year. And so it feels like what we felt maybe it was a two-quarter event. It's more like a one quarter at this point in time, where we sit today. And so that's what our full year guidance also expects, is that where we kind of are seeing it in Q1, which is, you know, pretty steady, and pretty good across all of our concepts will continue through the balance of the year.

Speaker #4: I can't really speak to, to other companies. But I think our performance, if you interpolate the guidance, is more like what we saw in Q2 of last year.

Speaker #4: And so, it feels like, well, we felt maybe it was a two-quarter event. It's more like a one-quarter, at this point in time, where we sit today.

Speaker #4: And so that's what our full-year guidance also expects, is that where we kind of are seeing it in Q1, which is, you know, pretty steady, and pretty, pretty, pretty good across all of our concepts, will continue through the balance of the year.

Speaker #1: Your next question comes from the line of Jim Solera with Stevens. Please go ahead.

Operator: Your next question comes from the line of Jim Salera with Stephens. Please go ahead.

Jim Salera: Guys, good afternoon. Thanks for taking our question. I wanted to circle back on the bowls and bites. You'd mentioned that you're seeing, you know, attachment with those. And I was hoping maybe you could help us break out on Cheesecake the traffic and transaction in the quarter, but particularly with an eye to the mix component. Should we expect to see mix as kind of a continued headwind as we roll into FY 2026, as we kind of balance, you know, maybe some greater attachment, but the lower check size from the bowls and bites, and maybe that drives some transactions as well?

Speaker #8: Yes, good afternoon. Thanks for taking our question. I wanted to circle back on the bowls and bites. You'd mentioned that you're seeing, you know, attachment with those.

Speaker #8: and, and I was hoping maybe you could help us break out on Cheesecake, the traffic and transaction in the quarter, but, but particularly with an eye to the mix component.

Speaker #8: Should we expect to see mix as kind of a continued headwind as we roll into FY26, as we kind of balance, you know, maybe some greater attachment, but the lower check size from the bowls and bites, and maybe that drives some transactions as well?

Speaker #4: Sure. Jim, this is Matt. Q4, pricing was about 3.5 to 4%, and mix was a negative 1.8%. And then traffic was the delta from that.

Matt Clark: Sure, Jim, this is Matt. Q4 pricing was about 3.5% to 4%, and mix was a negative 1.8%, and then traffic was the delta from that. As anticipated, we still did see some negative mix. I would say, though, that, you know, that's a full quarter number, and we had just rolled out the new menu items really ending in early September. You know, we didn't have a lot of traction if we think about our average guest comes once a quarter. As I noted, I think just importantly, what we saw in December and now again in January is an actual improvement year-over-year in incident rates. Some of the pricing investment will be offset by increased ordering.

Speaker #4: So, as anticipated, we still did see some negative mix. I would say, though, that, you know, that's a full quarter number. And we had just rolled out the new menu items, really ending in early September.

Speaker #4: So, you know, we, we didn't have a lot of traction. If we think about our, our average guest comes once a quarter. So as I noted, I think just importantly, what we saw in December, and now again in January, is, is an actual improvement year over year and incident rates.

Speaker #4: So, some of the pricing investment will be offset by increased ordering. So, we do think that the negative mix will continue, but at a lesser rate as we progress through the year.

Matt Clark: So we do think that the negative mix will continue, but at a lesser rate as we progress through the year. Importantly, too, as we look at January, when you look at alcohol plus non-alcohol beverages, it was almost a break even on incident rates. So I think it's really guests are coming in and getting that full Cheesecake experience. So I don't know, we're kind of saying if you think about the guide, probably a negative 1 for the year on a mix perspective, based on continuing to roll out the bowls and the bites, but getting some positive on the order rates.

Speaker #4: Importantly, too, as we look at January, when you look at alcohol plus non-alcoholic beverages, it was almost a break even on incident rate. So I think it's, you know, really guests are coming in and getting that full Cheesecake experience.

Speaker #4: So, I don't know. We're kind of saying, if you think about the guide, probably a negative 1 for the year on a mixed perspective, based on continuing to roll out the bowls and the bites.

Speaker #4: But getting some positives on the order rates.

Speaker #8: Okay. Good. That's very helpful. And then, just to follow up, as we think about some demand drivers in, in '26, I know there's been a lot of conversations around incremental demand from, people getting tax refunds, you know, larger than expected tax refunds.

Jim Salera: Okay, great. That's very helpful. And then, just to follow up, as we think about some demand drivers in 2026, I know there's been a lot of conversations around incremental demand from people getting tax refunds, you know, larger than expected tax refunds. Do you have any kind of historical, you know, data that you can look at from when there were big refund seasons in the past? Is that something that actually tends to show up in the restaurants, or is that maybe just more the talking point than a reality from what you guys see on the ground?

Speaker #8: Do you have any kind of historical, you know, data that you can look at from when there were big refund seasons in the past?

Speaker #8: Is that something that actually tends to show up in the restaurants, or is that maybe just more of a talking point than a reality from what you guys see on the ground?

Speaker #4: Yeah. I mean, I think, you know, great companies control their destiny, Jim, and so we don't really ever count on getting any benefits from the tax refunds.

Matt Clark: Yeah, I mean, I think, you know, great companies control their destiny, Jim, and so we don't really ever count on getting any benefits from the tax refunds. I think what we're seeing in our performance, given also that it started way before that, is that the improvements are based on our execution, our menu innovation, and the things that we're doing. And just normally, given the income cohort associated with most of our portfolio, I just don't think it's as pronounced, and we haven't seen nor do we see correlations to gas prices, things like that, either.

Speaker #4: I think what we're seeing in our performance, given also that it started way before that, is that the improvements are based on our execution and our menu innovation, and the things that we're doing.

Speaker #4: And, and just normally, given the income cohort associated with most of our portfolio, I just don't think it's as pronounced. And we haven't seen nor, nor do we see correlations to gas prices, things like that.

Speaker #4: either.

Speaker #8: Okay, good. I appreciate the thoughts. I'll hope I can do it.

Jim Salera: Okay, great. I appreciate the thoughts. I'll hop back into you.

Speaker #1: Your next question comes from the line of Jeffrey Bernstein with Barclays. Please go ahead.

Operator: Your next question comes from the line of Jeffrey Bernstein with Barclays. Please go ahead.

Speaker #8: Great. Thank you. my first question is just on the restaurant margin. specifically around what your assumptions are for the quarter and the year. It does seem like now all the three brands that you're reporting are comfortably sitting in that 17 to 18 percent range.

Jeffrey Bernstein: Great. Thank you. My first question is just on the restaurant margin, specifically around what your assumptions are for the quarter and the year. It does seem like now all the three brands that you're reporting are comfortably sitting in that 17% to 18% range. I was wondering how we should think about that as the portfolio and by brand, any puts and takes in terms of how that should play out as we look through 2026, and then I had one follow-up.

Speaker #8: I'm just wondering how we should think about that as the portfolio and by brand. Any puts and takes in terms of how that should play out as we look through '26?

Speaker #8: And then I had one follow-up.

Speaker #4: Sure, Jeff. This is Matt. Thanks for the question. let's just start with the full year. I think, you know, as we set out our guidance last, October, you know, we're happy to, to say that we're right on plan.

Matt Clark: Sure, Jeff. This is Matt. Thanks for the question. Let's just start with the full year. I think, you know, as we set out our guidance last October. You know, we're happy to say that we're right on plan. 25 basis points of four wall margin is our expectation for the restaurant levels. A little bit of pressure in G&A, as we know, we gave some specific guide there. Really just accounting. You know, we've had tremendous retention in the restaurants. We've also had tremendous retention at corporate, and so there's this thing called a forfeiture rate with the equity comp that we'll true up a little bit, but it's really sort of non-operating, but it hits the P&L, and then all the other pieces kind of net out. So very, very clean outlook for us.

Speaker #4: 25 basis points of four-wall margin is our expectation. for, for the, the restaurant levels. A little bit of pressure in G&A as, as we know, we gave some specific guide there.

Speaker #4: Really just accounting you know, we've had tremendous retention in the restaurants. We've also had tremendous retention at corporate. And so there's this thing called a forfeiture rate with the equity comp that we'll, we'll true up a little bit.

Speaker #4: But it's really sort of non, non-operating. But it hits the P&L. And then all the other pieces kind of, kind of net out. So very, very clean.

Speaker #4: Outlook for us. You know, the caveat comes on a quarter-to-quarter basis. Obviously, other OPEX can be a little bit bumpier in the first quarter.

Matt Clark: You know, the caveat comes on quarter-to-quarter basis. Obviously, other OpEx can be a little bit bumpier. In the first quarter, again, the 25 basis points coming in cost of sales, a little bit of the pressure on labor and lapping group medical, but really the difference there is about 50 basis points in other OpEx, which is timing of marketing spend and some utilities. And then, you know, you can do the math on the pre-opening and other pieces. So pretty much a flattish year-over-year net income guide and then that slight improvement for the full year, so.

Speaker #4: Again, the 25 basis points coming in cost of sales—a little, little bit of pressure on labor and lapping Group Medical. But really, the difference there is about 50 basis points in other OPEX, which is timing of marketing spend and some utilities.

Speaker #4: And then, you know, you can do the math on the pre-opening and other pieces. So, pretty much a flattish year-over-year net income guide.

Speaker #4: And, and then that slight improvement, for the full year. So.

Speaker #8: Got it. And my follow-up is just on the, the menu pricing. Obviously, the flip side to the, the greater emphasis on value. But I think you mentioned that the Cheesecake was running price in the 3 and a half to 4 percent range.

Jeff Farmer: Got it. My follow-up is just on the menu pricing. Obviously, the flip side to the greater emphasis on value, but I think you mentioned that the cheesecake was running price in the 3.5% to 4% range. Maybe just quantitatively, what are you expecting as we run through this year and qualitatively, your confidence in being able to take whatever particular lever you're targeting, or maybe that's a gross amount you expect that on a net basis, you won't necessarily pencil that through. But just conceptually, how are you thinking about that pricing, and actually, what will that pricing be?

Speaker #8: Maybe just quantitatively, what are you expecting as we run through this year? And qualitatively, your confidence in being able to take whatever particular lever you're targeting?

Speaker #8: Or maybe that's a gross amount you expected on a net basis. You won't necessarily pencil that through. But just conceptually, how are you thinking about that pricing, and actually, what will that pricing be?

Speaker #4: Yeah, Jeff, so it's, it's Matt. So with this year, Cheesecake will be about 3%. So we'll, we're bringing that down, which I think, you know, number one, we saw the inflation numbers where food away from home is still at 4%.

Matt Clark: Yeah, Jeff, so it's Matt. So with this year, Cheesecake will be about 3%. So we're bringing that down, which I think, you know, number one, we saw the inflation numbers, where food away from home is still at 4%. And to your point, we're investing in lower price points on an average basis. As I said, maybe that's 100 basis points of negative mix. So we look at that as probably an effective 2%, if, you know, if you combine the mix and the price together, which is gonna be well below where the industry is. And, you know, we're aided there by, while beef is higher, it's not as big of a piece for us, and dairy is measurably lower. So our market basket, I think, is aiding us in that endeavor.

Speaker #4: And to your point, we're investing in lower price points on an average basis. As I said, maybe that's 100 basis points of negative mix.

Speaker #4: So, so we look at that as probably an effective 2%. If, you know, if you combine the mix and the price together, which is gonna be well below, where, the industry is.

Speaker #4: And, you know, we're aided there by—well, beef is higher. It's not as big of a piece for us. And dairy is measurably lower.

Speaker #4: So our market basket, I think, is aiding us in, in that endeavor. And I think we feel like that's a, you know, definitely an achievable, level.

Matt Clark: I think we feel like that's a, you know, definitely an achievable level, and we have that pricing power based on where we're seeing the sales trends today, the attachment rates today. You know, the guests are perceiving value there.

Speaker #4: And we have that pricing power based on where we're seeing the, the sales trends today. The, the attachment rates today. You know, the, the guests are perceiving value there.

Speaker #8: Thank you.

Jeff Farmer: Thank you.

Speaker #1: Your next question comes from the line of Lauren Silberman with Deutsche Bank. Please go ahead.

Operator: Your next question comes from the line of Lauren Silberman with Deutsche Bank. Please go ahead.

Speaker #9: Thanks a lot. You called out the foreclosures to date. Were these all anticipated? And are there any other closures that are anticipated for the balance of '26?

Lauren Silberman: Thanks a lot. You called out the four closures to date. Were these all anticipated, and any other closures that are anticipated for the balance of 26?

Matt Clark: Yeah, this is David Gordon. Yeah, they were all anticipated, and we don't anticipate any future in 2026.

Speaker #4: Lauren, good. Yeah. This is David Gordon. Yeah. They were all anticipated. and, we don't anticipate any future in 2026.

David Gordon: Yeah, this is David Gordon. Yeah, they were all anticipated, and we don't anticipate any future in 2026.

Speaker #9: Great. Just on the comp side, are there any callouts in terms of differences across regions or dayparts? And I guess in the markets that haven't been impacted by weather.

Lauren Silberman: Great. Just on the comp side, are there any call-outs in terms of differences across regions or day parts? And I guess in the markets that haven't been impacted by weather, are you seeing trends hold up with, you know, pretty stable?

Speaker #9: Are you seeing trends hold up with, you know, pretty stable?

Speaker #4: Well, and this is Matt. It's, it's a little complicated because weather's been everywhere, I feel like, you know, and so you have to really splice it.

Matt Clark: Well, and this is Matt. It's a little complicated because weather's been everywhere, I feel like, you know, and so you have to really splice it. I mean, California's had the rains at different points in time, and, you know, we had much more southern weather impact than we normally do. I would say, you know, generally, the overall business has been predictable. I mean, I think we were in the range we expected to be in, despite a little bit more weather. You know, right now, we feel good about the guidance that we're giving, and all of our regions, I think, are doing well. So, you know, you're gonna have those sort of hits and misses based on, you know, whether it's school holidays or whatever those schedules are, but nothing that I would call out specifically.

Speaker #4: I mean, California's had the rains at different points in time, and, you know, we had much more southern weather impact than we normally do.

Speaker #4: I, I would say, you know, generally, the overall business has been predictable. I mean, I think we, we were in the range we expected to be in despite a little bit more weather.

Speaker #4: You know, right now, we feel good about the guidance that we're giving. And all of our regions, I think, are doing well.

Speaker #4: So, you know, you're gonna have those sort of hits and misses based on, you know, whether it's school holidays or whatever those schedules are.

Speaker #4: But nothing that I would call out specifically.

Speaker #9: Okay, great. And then just a final one, going back to North. How are you thinking about comps for that business into '26? I know there's some accountabilization dynamics.

Lauren Silberman: Okay, great. And then just final one, going back to North, how are you thinking about comps for that business into 2026? I know there's a cannibalization dynamics. Do those continue? Any differences in where new units are expected to open? Thanks.

Speaker #9: Do those continue? Any differences in where new units are expected to open? Thanks.

Speaker #4: So, the new units specifically are about 50/50 in new and existing markets. So, we continually evaluate where any potential accountabilization might be, as we look at any new sites.

David Gordon: So the new units, specifically are about 50/50 in new and existing markets. So, we continually evaluate where any potential cannibalization might be, as we look at any new sites and would anticipate for this year, probably a little bit less than we had with the openings that were a little more impactful for the past twelve months that we've seen. And, you know, our goal is to get North a little bit more stabilized than it has been, probably a little more impacted versus Cheesecake and more in line with the rest of the industry.

Speaker #4: And would anticipate for this year, probably a little bit less than we had, with the openings that were a little more impactful for the past 12 months that we've seen.

Speaker #4: And, you know, our, our goal is to get, North a little, a little bit more stabilized than it has been, probably a little more impacted versus Cheesecake and more in line with the rest of the industry.

David Gordon: So at North, we continue to be working also on menu innovation, working a little bit on that lunch day part, because that was where we felt a little bit of the pressure over the past few quarters, and continued bar innovation as well. We've seen a nice little comeback in bar incident rates at North, which is good. It's an important part of the concept, and our bar mix is about 23%, have been very, very stable. So we're working on innovation in that area as well, as we believe it'll continue to be very relevant to the concept.

Speaker #4: so at North, we continue to be working also on menu innovation. Working a little bit on that lunch day part, because that was where we felt a little bit of the pressure over the past few quarters, and continued bar innovation as well.

Speaker #4: We've seen a nice little comeback in bar incident rates at North, which is good. It's an important part of the concept. And bar mix is about 23%.

Speaker #4: It's been very, very stable. So we're working on innovation in that area as well, as we believe they continue to be very relevant to the concept.

Speaker #3: Just for modeling, I think, like I said, you know, we've seen the impacts of the fire and the cannibalization rolling off.

Matt Clark: Just for modeling, I think, like I said, you know, we've seen the impacts of the fire and the cannibalization rolling off, and, you know, it kind of assumes sort of like, more like first half of last year's performance in our model.

Speaker #3: And, you know, it kind of assumes, sort of like, more like the first half of last year's performance in our model.

Speaker #9: Thank you very much. Appreciate it.

Lauren Silberman: Thank you very much. Appreciate it.

Speaker #1: Your next question comes from the line of Christine Cho with Goldman Sachs. Please go ahead.

Operator: Your next question comes from the line of Christine Cho with Goldman Sachs. Please go ahead.

Speaker #9: Yes. Thank you for, for the question. So, David, you mentioned your plans to launch the dedicated rewards app in a few months. could you elaborate a little bit more on the timeline?

Christine Cho: ... Yes, thank you for the question. So, David, you mentioned your plans to launch the dedicated rewards app in a few months. Could you elaborate a little bit more on the timeline, and if you have any planned marketing event, investments around the launch?

Speaker #9: And if you have any plans—marketing events, investments—around the launch?

Speaker #4: Sure, Christine. Our goal would be to get it launched in the second quarter. I think that we're feeling pretty confident that that's going to be the case.

David Gordon: Sure, Christine. Our goal would be to get it launched in the second quarter. I think that we're feeling pretty confident that that's going to be the case. And we will launch it with a strong social media presence of what we think will be a nice, strong offer for people to download the app onto their phone, and probably a little bit of in-restaurant marketing as well.

Speaker #4: And we will launch it with a strong social media presence, what we think will be a nice, strong offer for people to download the app onto their phone.

Speaker #4: and probably a little bit of in-restaurant marketing as well.

Christine Cho: Okay, great. And then in the last quarter, I think you've called out some regional trends, coming from the government shutdowns. Has that normalized as you exited the quarter? Thank you.

Speaker #9: Okay, great. And then in the last quarter, I think you've called out some regional trends coming from the government shutdowns. Has that normalized as you exited the quarter?

Speaker #9: Thank you.

Speaker #4: Yeah, I think we've seen pretty stable performance across the portfolio. Again, ex-ex the weather, which, you know, everybody is seeing at different times in different places.

Matt Clark: Yeah, I think we've seen pretty stable performance across the portfolio. Again, ex the weather, which, you know, everybody is seeing at different times at different places.

Speaker #1: Your next question comes from the line of Jeff Farmer from Gordon Haskett. Please go ahead.

Operator: Your next question comes from the line of Jeff Farmer from Gordon Haskett. Please go ahead.

Drew North: Thank you. Matt, just as a follow-up, I think you referenced that Q2 2025 same-store sales were roughly +1%. Were you saying that +1% is the implied 2026 same-store sales number? Did I get that right or wrong?

Speaker #10: Thank you, Matt. Just as a follow-up, I think you referenced that Q2 '25 same-store sales were roughly plus 1%. Were you saying that plus 1% is the implied 2026 same-store sales number?

Jeff Farmer: Thank you. Matt, just as a follow-up, I think you referenced that Q2 2025 same-store sales were roughly +1%. Were you saying that +1% is the implied 2026 same-store sales number? Did I get that right or wrong?

Speaker #10: Did I get that right or wrong?

Matt Clark: That's right. If you do the math, that's about where you're gonna come into. That's right.

Speaker #4: that's right. If you do the math, that's about where you're gonna come into. That's right.

Matt Clark: That's right. If you do the math, that's about where you're gonna come into. That's right.

Speaker #10: Okay, okay. And then just following up on the rewards app launch—tougher question—but in terms of setting the expectation level for us, how impactful could this be to visit frequency, average check, whatever metric you want to point to?

Drew North: Okay. And then just following up on the rewards app launch, tougher question, but in terms of setting an expectation level for us, how impactful could this be to visit frequency, average check, whatever metric you want to point to, just how meaningful could this be from what you guys have understood?

Speaker #10: Just h-how meaningful could this be, from what you guys have understood?

Speaker #4: Sure, Jeff. This is David. I think that our goal is to continue to make members' experiences as seamless as possible and give them as much value as they can as members.

David Gordon: Sure, Jeff, this is David. I think that our goal is to continue to make members' experience as seamless as possible and give them as much value as they can as members. So I wouldn't anticipate we're gonna share any of those finer details in the near future, just like we haven't in the recent past. But we're going to be very focused on the app, making the guest experience easier. So easier access to reservations for them, being able to see things like their order history, repeat their order history for off-premise. And we're excited to get it going in Q2, and if and when we start sharing any of those numbers, we'll be sure to share them on one of these calls.

Speaker #4: So I wouldn't anticipate we're gonna share, any of those finer details in the new f near future, just like we haven't, in the recent past.

Speaker #4: But we're gonna be very focused on the app—making the guest experience easier. So, easier access to reservations for them, being able to see things like their order history, and repeat their order history for off-premise.

Speaker #4: and we're excited to get it going in Q2. And if and when we start sharing any of those numbers, we'll be sure to share them on one of these calls.

Speaker #10: All right. Thank you.

Drew North: All right. Thank you.

Jeff Farmer: All right. Thank you.

Speaker #1: Your next question comes from the line of Brian Mullen with Piper Sandler. Please go ahead.

Operator: Your next question comes from the line of Brian Mullen with Piper Sandler. Please go ahead.

Speaker #11: Hey, thank you. Question on Flower Child. Wondering if you could just talk about the vision here over the next several years. You know, what have you learned about the formats and locations that work best for this brand?

Brian Mullan: Hey, thank you. Question on Flower Child. Wondering if you could just talk about the vision here over the next several years. You know, what have you learned about the formats and locations that work best for this brand? You know, how much can you standardize that versus kind of needing to customize based on the location? And just as a part of all that, you know, what would you need to see to really start to ramp that development pace above the six or seven for this year?

Speaker #11: You know, how much can you standardize that versus kinda needing to customize based on the location, and just as a part of all that, you know, what would you need to see to really start to ramp that development pace above the six or seven for this year?

Speaker #4: Sure, Brian. That, that's a great question. Certainly, we are enthusiastic. And very pleased with the performance of Flower Child. it continues to exceed expectations in new and existing markets, which, which I think is very promising as we move into new markets.

David Gordon: Sure, Brian, that, that's a great question. Certainly, we are enthusiastic and very pleased with the performance of Flower Child. It continues to exceed expectations in new and existing markets, which, which I think is very promising as we've moved into new markets, even when there has been no Flower Child within miles or states, the reception's been very, very strong. So it's resonating with consumers, I think for a few reasons. One, it's very healthy, on trend, and delicious, and it's an experiential, fast casual dining experience. It's, it's not transactional. And today, we, we continually say that we believe all of our guests are looking for experiences versus transactions. And then the operations team really has put in place a lot of systems over the past 24 months to enable consistent execution.

Speaker #4: Even when there has been, no Flower Child, within miles or states, the receptions have been very, very strong. So it's resonating with consumers, I think, for a few reasons.

Speaker #4: One, it's very healthy, on-trend, and delicious. And it's an experiential fast-casual dining experience. It's not transactional. And today, we continually say that we believe all of our guests are looking for experiences versus transactions.

Speaker #4: And then the operations team really has put in place a lot of systems over the past 24 months to enable consistent execution. There's probably a little bit more of that to go.

David Gordon: There's probably a little bit more of that to go, but up to this point, the guest experience, when we look at the type of reviews we're getting in social media or even just through our own channels, are very, very positive, and that's because of the consistent execution. So we feel good that the concept is certainly in a place where it can accelerate. The only thing that's holding us back from going a little bit faster than maybe a 20% growth rate would be, we want to make sure we have the right people power in place, and we need the right leadership at the GM and executive chef level to open up those very visual-- very busy fast casual units and do it really, really well for a consistent brand execution. That's most important to us.

Speaker #4: But up to this point, the guest experience—when we look at the type of reviews we're getting in social media, or even just through our own channels—are very, very positive.

Speaker #4: And that's because of the consistent execution. So we feel good that the concept is certainly in a place where it can accelerate. The only thing that's holding us back from going a little bit faster than maybe a 20% growth rate would be, we want to make sure we have the right people power in place.

Speaker #4: And we need the right leadership at the GM and executive chef level to open up those very visual very busy, fast, casual units and do a really, really well for consistent brand execution.

Speaker #4: That's most important to us. If we're able to ramp that up over time, could it be a little faster than 20% eventually? Perhaps. But for now, in the near term, we feel confident in that 20% number.

David Gordon: If we're able to ramp that up over time, could it be a little faster than 20% eventually? Perhaps, but for now, in the near term, we feel confident in that 20% number, and that's what we're most focused on.

Speaker #4: And that's what we're most focused on.

Speaker #11: Thank you.

Brian Mullan: Thank you.

Speaker #1: Your next question comes from the line of Dennis Geiger with UBS. Please go ahead.

Operator: Your next question comes from the line of Dennis Geiger with UBS. Please go ahead.

Speaker #12: Great, thanks, guys. Appreciate the commentary on mix. Matt, I just wanted to confirm—did you say how much of the mix pressure was Bold Invites versus group order, versus maybe alcohol and dessert in the quarter?

Christine Cho: Great. Thanks, guys. Appreciate the commentary on mix. Matt, I just wanted to confirm, did you say how much of the mix pressure was bowls and bites versus group order versus maybe alcohol and dessert in the quarter? I know you spoke to alcohol for January, but just in Q4, is there a breakdown by bucket as far as the mix impacts go?

Dennis Geiger: Great. Thanks, guys. Appreciate the commentary on mix. Matt, I just wanted to confirm, did you say how much of the mix pressure was bowls and bites versus group order versus maybe alcohol and dessert in the quarter? I know you spoke to alcohol for January, but just in Q4, is there a breakdown by bucket as far as the mix impacts go?

Speaker #12: I know you spoke to alcohol for January. But, just in the fourth quarter, is there a breakdown by bucket as far as the mix impacts go?

Speaker #4: Hey, Dennis. No, I—I didn't provide specifically. But, you know, my qualitative commentary would be: we saw alcohol stabilize; dessert was very steady. You know, so we know where most of it is coming from.

Matt Clark: Hey, Dennis. No, I, I didn't provide specifically, but you know, my qualitative commentary would be, we saw alcohol stabilize, dessert was very steady, you know, so we know where most of it is coming from, but I don't have the exact number in front of me. But, but we know those macro trends would indicate that, you know, a lot of it is coming from the, the pricing differential of the new product.

Speaker #4: But I, I don't have the exact number in front of me. But, but we know those macro trends would indicate that, you know, a lot of it is coming from the, the pricing differential of the new product.

Speaker #12: Got it. Very helpful. And then I guess just, assume it's a, , a similar answer. But just on the on the '26, as you think about maybe, you know, a, a best guess of that down one mix, i-is that the same largely from the new product on the bites and bowls, more so than, like, a group order dynamic, etc., as you think about that, that estimate for, for '26?

Christine Cho: Got it. Very helpful. And then I guess just assume it's a similar answer, but just on the, on the 26, as you think about maybe a, you know, a best guess of that down one mix, is that the same largely from the new product on the bites and bowls, more so than like a group order dynamic, et cetera, as you think about that, that estimate for, for 26?

Dennis Geiger: Got it. Very helpful. And then I guess just assume it's a similar answer, but just on the, on the 26, as you think about maybe a, you know, a best guess of that down one mix, is that the same largely from the new product on the bites and bowls, more so than like a group order dynamic, et cetera, as you think about that, that estimate for, for 26?

Speaker #4: Yeah, that—that's right. E-exactly. So, I mean, it's a—you know, there's an offset, you know, from the pricing. But as you start to see the order rate pick up, it kind of neutralizes some of it.

Matt Clark: ... Yes, that, that's right. Exactly. So, I mean, it's a, you know, there's an offset, you know, from the pricing, but as you start to see the order rate pick up, it kind of neutralizes some of it. So that's what we're anticipating.

Speaker #4: So that's what we're anticipating.

Speaker #12: Very helpful. Thanks, Matt.

Jeffrey Bernstein: Very helpful. Thanks, Matt.

Dennis Geiger: Very helpful. Thanks, Matt.

Speaker #1: You're next. Your next question comes from the line of Raul Crowe with JPMorgan. Please go ahead.

Operator: Your next question comes from the line of Rahul Crowe with JP Morgan. Please go ahead.

Speaker #13: Good afternoon, guys. You guys are very early on DoorDash. And I believe with the exclusivity, there has been a lot of discussion in the industry around some, and also across some of your peers, on how you want to rethink fees, menu pricing, and whatnot.

Rahul Krotthapalli: Good afternoon, guys. You guys are very early on DoorDash, and I believe with the exclusivity, there has been a lot of discussion in the industry around some and also across some of your peers on how you want to rethink fees, menu pricing, and whatnot. Can you give some detail on how you guys are thinking about this, and also remind us on where the delivery mix is today?

Speaker #13: Can you give some detail on how you guys are thinking about this, and also remind us where the delivery mix is today?

Speaker #4: Sure, Raul. This is—this is David Gordon. Great question. You're right. We certainly have been in a longstanding relationship with DoorDash. It's been a terrific relationship.

David Gordon: Sure, Rahul, this is, this is David Gordon. Great question. You're right. We certainly have been in a long-standing relationship with DoorDash. It's been a terrific relationship, and that relationship has allowed us to leverage I think what's great about the value of Cheesecake Factory's menu and pricing and not take extra price, which many of our competitors have had to do in the delivery channel. So, that would be our intent moving forward. We'd like to not have to take any more price than we take today, which is only about 2 to 3% versus the in-restaurant menu. When we look at total off-premise for Q4, it was 22% of sales, up about 1% from Q3.

Speaker #4: And that relationship has allowed us to leverage, I think, what's great about the value of Cheesecake Factory's menu and pricing, and not take extra price, which many of our competitors have had to do in the delivery channel.

Speaker #4: So, that would be our intent moving forward. We'd like to not have to take any more price than we take today, which is only about 2 to 3 percent versus the in-restaurant menu.

Speaker #4: When we look at total off-premise for Q4, it was 22% of sales, up about 1% from Q3. And that mix of that 22%, 10% is delivery, and the rest is split relatively evenly through online ordering and phone pickup.

David Gordon: That mix of that 22%, 10% is delivery, and the rest is split relatively evenly through online ordering and phone pickup. So that's been very consistent. Those numbers have been very consistent, and that mix has been consistent over time.

Speaker #4: So that's been very consistent. Those numbers have been very consistent. And that mix has been consistent over time.

Rahul Krotthapalli: Is there any possibility that you can extend this partnership across all your other brands down the line? I believe only Cake and Grand Lux were on the initial agreement. Just any updated thoughts there?

Speaker #13: Is there any possibility that you can extend this partnership across all your other brands down the line? I, I, I believe only CAKE and Grand Luxe were on the initial agreement. Just any updated thoughts there?

Speaker #4: Sure. Well, actually, all the concepts are covered in the agreement today. So everything we own is part of the DoorDash agreement today.

David Gordon: Sure, Rahul. Actually, all the concepts are covered in the agreement today. So everything we own is part of the DoorDash agreement today.

Speaker #13: Thank you.

Rahul Krotthapalli: Thank you.

Speaker #1: Your next question comes from the line of Brian Vicario with Raymond James. Please go ahead.

Operator: Your next question comes from the line of Brian Vaccaro with Raymond James. Please go ahead.

Speaker #14: Hi, thanks, and good evening. I wanted to ask about the 26-unit growth, and I thought it was interesting to see Cheesecake Factory's unit growth stepping up a bit.

Brian Vaccaro: Hi, thanks, and good evening. I wanted to ask about the 26 unit growth, and I thought it was interesting to see Cheesecake Factory's unit growth stepping up a bit. Maybe you just could give a little bit more on the opportunity you see there, and maybe level set the size of units that you're opening and kind of the AUV or unit economic targets on these units. I know there's been some successful unit openings over the years in pockets that open up, but maybe just kind of what you're seeing in terms of that outlook for 26.

Speaker #14: Maybe you just could give a little bit more on the opportunity you see there, and maybe level-set the size of units that you're opening, and kind of the AUV or unit economic targets on these units.

Speaker #14: I know there's been some successful unit openings over the years in pockets that open up. But maybe just kind of what you're seeing in terms of that outlook for '26.

Speaker #4: Sure, Brian. So, we're, we're excited to be opening up to six cheesecakes this year. And as great sites become available for cheesecake factory, because of the flexibility in size, everything from 6,500 up to 10,000 square feet, we can we can build the cheesecake factory at any great site.

David Gordon: Sure, Brian. We're excited to be opening up to 6 Cheesecakes this year, and as great sites become available for Cheesecake Factory, because of the flexibility and size, everything from 6,500 up to 10,000sq ft, we can build a Cheesecake Factory at any great site. For this coming year, most of these are in that 7,000 to 7,500sq ft range for all 6 of them on average.

Speaker #4: For this coming year, most of these are in that 7,000 to 7,500 square foot range, for all six of them. On average.

Speaker #15: And Brian, from a returns perspective, this is Matt. I mean, we've been super happy with the sales levels they've been able to generate—effectively, the average AUVs and average margins.

Matt Clark: And Brian, from a returns perspective, this is Matt. We've been super happy with the sales level. They've been able to generate effectively the average AUVs and average margins. And so we're sitting right between the 20 and 25% cash on cash we've been targeting and feel great about the ability to continue to open at that level.

Speaker #15: And so, we're sitting right between the 20 and 25 percent cash on cash we've been targeting. And, and, feel great about the con the ability to continue to open at that level.

Speaker #14: All right, that's helpful. Appreciate that. And then, on the margin outlook, Matt, could you comment specifically on your expectation for commodity inflation, specifically, and any quarterly variability to keep in mind on the commodity front, year-over-year?

Brian Vaccaro: All right. That's helpful. Appreciate that. Then on the margin outlook, Matt, could you comment specifically on just your expectation for commodity inflation, specifically, and any quarterly variability to keep in mind on the commodity front year on year?

Matt Clark: Sure. Commodities would be about 2.5% or so overall, and pretty steady throughout the year, God willing.

Speaker #4: Sure. Commodities would be about two and a half percent or so overall, and pretty steady throughout the year, God willing.

Matt Clark: Sure. Commodities would be about 2.5% or so overall, and pretty steady throughout the year, God willing.

Speaker #14: Knock on wood. Knock on wood. All right. And then, last one for me. I'm sorry if I missed it, but could you also provide the comp components for North Italia in the fourth quarter?

Brian Vaccaro: Knock on wood. Knock on wood.

Matt Clark: Yeah.

Brian Vaccaro: All right, and then, last one for me. I'm sorry if I missed it, but could you also provide the comp components for North Italia in Q4? Thanks again.

Speaker #14: And thanks again.

Speaker #4: Hey, Brian. This is Etienne. Yeah, I'll give you the components here. So traffic was negative 6%. Price was about 4%. And the mix was negative 2% for the quarter.

David Gordon: Hey, Brian, this is Etienne. Yeah, I'll give you the components here. So traffic was negative 6%, prices about 4%, and the mix was negative 2% for the quarter.

Etienne Marcus: Hey, Brian, this is Etienne. Yeah, I'll give you the components here. So traffic was negative 6%, prices about 4%, and the mix was negative 2% for the quarter.

Speaker #14: Thank you.

Brian Vaccaro: Thank you.

Speaker #4: Sure.

David Gordon: Sure.

Etienne Marcus: Sure.

Speaker #1: And ladies and gentlemen, that concludes our question and answer session. And that concludes today's call. Thank you for your participation. And you may now disconnect.

Operator: Ladies and gentlemen, that concludes our question and answer session, and that concludes today's call. Thank you for your participation, and you may now disconnect.

Q4 2025 Cheesecake Factory Inc Earnings Call

Request a DemoDemo

CAKE

Cheesecake Factory

Earnings