CHEESECAKE FACTORY INC recently released its latest 10-Q report. The Cheesecake Factory Incorporated operates and licenses restaurants in the United States and Canada, and it also runs bakery facilities that supply cheesecakes and other baked goods to its own restaurants, licensees, third-party bakery customers, foodservice operators, retailers, and distributors. Its restaurant portfolio includes The Cheesecake Factory, North Italia, Flower Child, and Fox Restaurant Concepts, and the company was founded in 1972 and is based in Calabasas, California.
In Item 2, management said the operating environment continued to be shaped by geopolitical and macroeconomic pressures, including trade and tariff dynamics, inflation, supply chain disruption, staffing challenges, and delays in new restaurant openings. The company said commodity and wage inflation had begun returning to more historical levels in fiscal 2024 after a period of sharp increases, but it still sees the risk of further wage and product cost inflation, as well as consumer behavior shifts and weather-related disruptions.
The company said it owned and operated 371 restaurants in the U.S. and Canada as of the quarter, including 216 The Cheesecake Factory locations, 50 North Italia restaurants, 43 Flower Child restaurants, and 56 additional FRC restaurants. Outside the U.S. and Canada, 36 Cheesecake Factory restaurants operated under licensing agreements. Its bakery division operates two facilities.
Management said revenue growth is driven mainly by new unit openings and comparable restaurant sales. For The Cheesecake Factory concept, the company is targeting higher average checks while maintaining traffic, using menu innovation, service, off-premise dining, delivery, online ordering, marketing programs, and its Cheesecake Rewards program. It said menus are generally updated twice a year, and pricing decisions are being made with inflation and cost pressure in mind.
For the 13 weeks ended March 31, 2026, revenues rose 5.6% to $978.8 million from $927.2 million a year earlier. The company attributed the increase to new restaurant openings and higher comparable restaurant sales. The Cheesecake Factory restaurant sales increased 2.6% to $690.5 million from $672.7 million, while average sales per restaurant operating week increased 1.9% to $245,196 from $240,692.
Comparable sales at The Cheesecake Factory increased 1.6%, or $10.3 million, in the quarter. Total operating weeks at The Cheesecake Factory restaurants increased 0.8% to 2,816 from 2,795.
As a percentage of revenue, food and beverage costs were 21.7%, down from 21.8%; labor expenses were 35.5%, down from 35.7%; other operating costs and expenses were 27.0%, up from 26.6%; general and administrative expenses were unchanged at 6.5%; and preopening costs fell to 0.6% from 0.9%.
Income from operations was 5.6% of revenue in both periods. Interest expense, net, improved to 0.2% of revenue from 0.3%, and the prior-year quarter included a 1.7% loss on extinguishment of debt that did not recur. Income before income taxes rose to 5.5% of revenue from 3.7%, and net income increased to 5.1% from 3.6%.
Management said its capital priorities remain new restaurant development, debt management, and shareholder returns through dividends and repurchases. It also said future dividend and buyback decisions will depend on board approval, debt agreement limits, and applicable law. Today the company's shares have moved -1.51% to a price of $59.29. If you want to know more, read the company's complete 10-Q report here.
