The Cheesecake Factory — Third Quarter Fiscal 2026 Earnings Summary

Financial Performance:

• Total revenues for the third quarter of fiscal 2026 were $1,033.4 million, an increase from $907.2 million in the same period of fiscal 2025.
• Net income was $61.3 million, compared to $31.9 million in the prior year quarter; diluted net income per share was $1.19 versus $0.66.
• Adjusted net income was $52.3 million, and adjusted diluted net income per share was $1.02, excluding after-tax impacts of acquisition-related items and other specified items.
• Income from operations was $74.9 million (7.2% of revenues) in the third quarter, up from $37.3 million (4.1% of revenues) in the prior year.
• Food and beverage costs as a percentage of revenues decreased to 21.2% from 21.8% year-over-year.
• Labor expenses as a percentage of revenues decreased to 34.8% from 35.6% year-over-year.
• Other operating costs and expenses as a percentage of revenues decreased to 27.7% from 28.2% year-over-year.
• General and administrative expenses were $66.6 million (6.4% of revenues) compared to $59.0 million (6.5% of revenues) in the prior year.
• Depreciation and amortization expenses were $29.2 million (2.8% of revenues) compared to $27.4 million (3.0% of revenues) in the prior year.
• Acquisition-related contingent consideration, compensation, and amortization resulted in a net income benefit of $12.9 million (recorded as a pre-tax net income item).
• For the 39 weeks ended September 29, 2026, total revenues were $3,041.9 million compared to $2,790.2 million in the prior year period.
• Net income for the 39 weeks was $179.2 million compared to $119.7 million in the prior year period; diluted net income per share was $3.62 versus $2.46.
• Adjusted diluted net income per share for the 39 weeks was $3.50 compared to $2.77 in the prior year period.

Guidance and Future Outlook:

• The Company expects to open as many as 26 new restaurants in fiscal 2026, including up to five The Cheesecake Factory locations, eight North Italia locations, seven Flower Child locations, and up to six FRC restaurants.
• Management expressed confidence in delivering profitable growth and long-term shareholder value, citing strong brand affinity and competitive positioning.

Business Segments and Product Lines:

• Comparable restaurant sales at The Cheesecake Factory restaurants increased 15.2% year-over-year in the third quarter.
• Comparable restaurant sales at North Italia decreased 3.0% year-over-year in the third quarter.
• The Cheesecake Factory segment revenues were $754.4 million with income from operations of $119.6 million for the quarter.
• North Italia segment revenues were $93.0 million with income from operations of $4.1 million for the quarter.
• Other FRC segment revenues were $90.3 million with a loss from operations of $3.6 million for the quarter.
• Other segment revenues were $95.8 million with a loss from operations of $45.2 million for the quarter.
• During the third quarter, the Company opened six new restaurants: two Cheesecake Factory, one North Italia, one Flower Child, and two FRC restaurants.
• Subsequent to the quarter-end, the Company opened two Flower Child restaurants and one FRC restaurant.
• The Company currently operates 383 restaurants in the United States and Canada, including 218 The Cheesecake Factory, 52 North Italia, 59 Other FRC, and 51 Other locations.
• Internationally, 35 The Cheesecake Factory restaurants operate under licensing agreements.

Market and Competitive Landscape:

• The Cheesecake Factory comparable sales and traffic meaningfully outperformed the broader casual dining industry.
• The Company was named to the FORTUNE Magazine "100 Best Companies to Work For" list for the thirteenth consecutive year in 2026.
• Sales growth was driven by continued menu innovation, the rewards program, and significant engagement across social media.
• Profitability improvements were supported by year-over-year enhancements in labor productivity and food efficiency.

Risks and Challenges:

• Forward-looking statements are subject to risks including economic, public health, and political conditions impacting consumer confidence and spending.
• Risks include supply chain disruptions, potential damage to or closure of restaurants, and reputational damage.
• The Company faces risks related to international market acceptance, foreign exchange rates, tariffs, and cross-border taxation.
• Potential challenges include increases in minimum wages and benefit costs, the economic health of landlords and suppliers, and the timing of new unit development and permitting.
• Risks also include compliance with debt covenants and the ability to satisfy obligations under convertible senior notes due 2030.

Management Commentary and Tone:

• David Overton, Chairman and CEO, described the third quarter as "exceptional," noting record quarterly revenue and margins and earnings exceeding expectations.
• Management highlighted the enduring appeal of the brand across generations and its ability to attract younger guests.
• The tone was confident regarding the company's competitive position and ability to deliver long-term shareholder value.
• Management attributed success to experienced operators delivering high levels of food quality, service, and hospitality.

Other Key Points:

• As of September 29, 2026, the Company had total available liquidity of $585.3 million, consisting of $249.3 million in cash and $336.0 million of availability on its revolving credit facility with no outstanding balance.
• Total principal amount of debt outstanding was $575 million, representing 2.00% convertible senior notes due 2030.
• During the third quarter, the Company repurchased approximately 29,800 shares of stock at a cost of $2.4 million.
• The Board of Directors declared a quarterly dividend of $0.30 per share, payable on November 24, 2026, to shareholders of record on November 10, 2026.
• The Company recorded a pre-tax net income of $12.9 million related to Fox Restaurant Concepts (FRC) acquisition items.
• A conference call to review results was held on October 27, 2026, at 2:00 p.m. Pacific Time.