The Cheesecake Factory Incorporated

Good day and thank you for standing by. Welcome to the Cheesecake Factory Second Quarter Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. And if you require any further assistance, just press star 0. I will now turn the call over to your first speaker, Ms. Stacey Fite, Vice President of Investor Relations. You may begin your conference.

Thanks, Maria. Good afternoon and welcome to our second quarter fiscal 2021 earnings call. On the call today are David Overkin, 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 fact and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could 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.thechoosecakefactory.com. and in our filings with the Securities and Exchange Commission. 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 excludes non-cash acquisition-related contingent consideration and amortization expense, and the cost to terminate the company's interest rate swap and reflects the then potential impact of the conversion of the company's convertible preferred stock into common stock for the period that it was outstanding during the quarter prior to the repurchase and conversion on June 15th. An explanation 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 an opening remark, and David Gordon will provide an operational update. Matt will then briefly review our second quarter results and provide a financial update. With that, I'll turn the call over to David Overton.

Thank you, Stacey. Comparable sales at the Cheesecake Factory restaurants increased 7.8% relative to the second quarter of fiscal 2019. This performance helped us achieve record revenues and generate revenue $109 million in cash flow from operations in the second quarter. All of our locations except Toronto had some level of indoor dining capacity, and we continued to see significant pent-up demand to dine at our restaurants across the country. Notably, we generated stronger sales at the Cheesecake Factory restaurants on Mother's Day and Father's Day this year versus 2019, in spite of indoor capacity restrictions. In fact, we had one location that did 100,000 in sales on Mother's Day with just 50% indoor dining capacity, underscoring the tremendous brand affinity for the Cheesecake Factory. Continued strength in the off-premise channel again supported our strong sales performance during the second quarter. With the lifting of indoor dining restrictions in California and a number of other markets toward the end of the second quarter, we saw comparable sales further strengthen into July as nearly all of our locations are operating with no restrictions. Fiscal 2021 third quarter to date through July 26, comparable sales at the Cheesecake Factory restaurants increased 10% versus 2019. And we have seen consistency in this metric each week this month. Our operators did a great job managing and leveraging the strong sales levels, delivering delicious memorable experiences for our guests and also exceeding our expectations across our key performance indicators, including food efficiency and labor productivity. This performance drove strong restaurant-level margin results at the Cheesecake Factory restaurants during the second quarter. On the development front, two North Italia restaurants opened in Miami and San Antonio, and Flower Child opened in Atlanta during the second quarter. Just last week, North Italia opened a second location in the Nashville area in Franklin. We remain on track to open as many as 14 new restaurants across our concepts this year. Internationally, we now expect as many as two Cheesecake Factory locations to open under licensing agreements as one restaurant in the Middle East is now anticipated to open in 2022. With that, I'll now turn the call over to David Gordon.