The Cheesecake Factory Inc.’s transition to an off-premise operating model during the coronavirus pandemic “is enabling the company’s restaurants to operate sustainably,” the company said Monday.
The Calabasas Hills, Calif.-based company, parent to the Grand Luxe, North Italia and other brands, said 27 of its more than 290 restaurants were closed temporarily, including two of its Cheesecake Factory units, because of state and city mandates to slow the spread of the COVID-19 virus.
"As we navigate through COVID-19, the health and well-being of our staff members and guests remains our No. 1 priority," said David Overton, Cheesecake Factory CEO and chairman, said in a statement, adding that the company was following the guidelines of health agencies such as the Centers for Disease Control and Prevention.
"We have been following the guidance of the CDC and our local health departments and will continue to do so throughout this evolving situation,” Overton said.
The company said it, like many other restaurant brands, was increasing its cash position by drawing an additional $90 million on its revolving credit facility. It was also withdrawing its financial guidance for the year.
In its February analyst call, Cheesecake executives said that in the fourth quarter, ended Dec. 31, 17% of its sales were off-premise, with about 35% of that through its exclusive delivery partner DoorDash, about 13% online ordering and about 50% was phone-in and walk-in.
“We feel good about the deal we have with our partner [DoorDash],” said David Gordon, Cheesecake Factory president, on the call. “And we feel good about the margin that we currently have on all of our off-premise business.”
However, Overton on Monday said, “The coronavirus pandemic has had an unprecedented impact on the restaurant industry as containment measures escalate. While the situation remains fluid, we are taking decisive but difficult actions to enable our restaurants to manage through the specific circumstances in their communities, while further strengthening our liquidity position.”
For the fourth quarter, The Cheesecake Factory’s net income rose to $48.7 million, or $1.10 per share, from $16.2 million, or 35 cents per share, in the same period last year. Revenues increased 18.6% to $694 million from $585.2 million in the prior-year quarter.
Same-store sales at Cheesecake Factory restaurants increased 0.6% in the quarter and at the recently acquired North Italia by 4%.
The Cheesecake Factory owns and operates 294 restaurants throughout the United States and Canada under brands that include Grand Lux Café, North Italia and a collection within its Fox Restaurant Concepts subsidiary. The company licenses 26 Cheesecake units internationally.
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