The Cheesecake Factory Incorporated

Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cheesecake Factory fourth quarter fiscal 2021 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 during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. Etienne Marcus, Vice President of Finance and Investor Relations, you may begin your conference.

Thank you, Emma. Good afternoon and welcome to our fourth quarter fiscal 2021 earnings call. On the call 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 a historical fact and are considered forward-looking statements within the meeting 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.cheesecakefactory.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 exclude impairment of assets and lease terminations, acquisition-related contingent consideration, compensation, and amortization expense, as well as reserves for uncertain tax positions. 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 some opening remarks, and David Gordon will provide an operational update. Matt will then briefly review our fourth quarter results and provide a financial update. With that, I'll turn the call over to David Overton.

Thank you, Etienne. We had another solid quarter with fourth quarter total revenues reaching a new all-time high mark despite the surge in COVID-19 cases towards the end of the year. Comparable sales at the Cheesecake Factory restaurants increased 7.7% relative to the fourth quarter of fiscal 2019 and continued to outperform both the NAPTRAC and Black Box casual dining indices. reinforcing our confidence in the strength of the brand and our ability to take market share. Once again, our operators manage their restaurants very well during the quarter with sequential improvements in food efficiencies, labor productivity, and hourly staff and manager retention. We believe our operating results would have been in line with expectations, but for the softer sales trend during the last two weeks of the quarter, which coincided with the Omicron surge. Our first quarter sales trends have started strong. In fact, we have further increased our gap to the casual dining industry since the most recent quarter. The Cheesecake Factory Physical 2022 first quarter comparable sales through February 15th are up 24.3% versus the prior year. Looking ahead to 2022, our development pipeline remains robust as we look to further accelerate our unit growth. However, while all the sites that we have been working on remain in our pipeline, we are cognizant of the current environment and the effects supply chain, governmental and local jurisdiction permitting approvals are having on timing of the openings. As such, we now expect to open as many as 17 to 19 new restaurants in fiscal year 2022, including as many as five Cheesecake Factory restaurants, five to seven North Italia's, and as many as seven other FRC restaurants, including three to four our child locations. We also currently expect one Cheesecake Factory restaurant to open internationally under a licensing agreement. We believe that we have made strategic investments to best manage through the continued volatile environment while positioning ourselves to achieve our long-term goals of driving both comparable sales growth and 7% unit growth across our brands. We remain committed to managing structural and permanent cost pressures to protect our firewall margins over time. To that point, we are currently in the process of rolling out our new Cheesecake Factory menu, which includes approximately 3.25% menu price increase in total that will put our year-over-year menu pricing increase at 4.75%. We will continue to monitor the inflationary environment to determine what level of pricing will be needed during our next menu rollout. I remain as confident as ever that our best-in-class operators will continue to effectively manage through this volatile operating environment and with our development pipeline in place and solid comparable sales trends across our brands, we are well positioned to continue to take market share. With that, I'll now turn the call over to David Gordon.