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 first quarter fiscal 2022 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. Mr. Etienne Marcus, Vice President of Finance and Investor Relations, you may begin your conference.

Thank you. Good afternoon and welcome to our first quarter fiscal 2022 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 historical facts 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.thecheesecakefactory.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 and acquisition-related contingent consideration, compensation, and amortization expense. 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 first quarter results and provide a financial update. With that, I'll turn the call over to David Overton. Thank you, Etienne.

we delivered another solid quarter with total sales in the first quarter of 2022 increasing 27% over the same quarter in 2021, underscoring the strength of the consumer demand for our brand and demonstrating our ability to capture market share. First quarter 2022 comparable sales at the Cheesecake Factory restaurants increased 20.7%. relative to the first quarter of 2021 and continue to outperform both the NAPTRAC and Black Box casual dining indices. Our operators did a great job of managing their restaurants and building sales. They remain focused on fostering an environment where delivering delicious, memorable experiences for our guests is a top priority. And I am proud that we were recently recognized as one of the 100 best companies to work for by Fortune Magazine for the ninth year in a row, reinforcing that we continue to be an employer of choice in the restaurant industry. To that point, our staffing levels have further improved since our last earnings call in February. We now have approximately 1% more staff members than we did just prior to the pandemic. Our first quarter sales momentum has continued to the second quarter with comparable sales at the Cheesecake Factory through April 26 at a positive 8.2% versus the same time period in 2021. Keep in mind this is a pretty good light for light comparison as we are now lapping the reopening of nearly all of our indoor dining rooms. Turning to development, while all of the sites that we have been working on remain in our pipeline, we are cognizant of the current environment and the effect supply chain, governmental, and local jurisdictions permitting approvals are having on the timing of our openings. As such, we now expect to open as many as 15 to 16 new restaurants in fiscal year 2022, including four Cheesecake Factories, four to five North Italia's, and seven other FRC restaurants. including three to four flower child locations. We also currently expect one Cheesecake Factory restaurant to open internationally under a licensing agreement. Despite these challenges, many of which are out of our control, we continue to ramp up unit development towards our 7% annual growth goal. In addition to investing in unit growth, given the sales strength and our confidence in the cash generation ability of our business, we are paying a quarterly dividend and will reinstate our stock purchase program. I recognize that the environment is dynamic and we continue to face substantial challenges with high commodity inflation, a tight labor market, and further supply chain disruptions. Despite these headwinds, we remain committed to protecting our front wall margins over time and as noted during the last call, plan to take the appropriate pricing in the summer to do so. Our brands remain resilient, and I am confident that our best-in-class operators will continue to effectively manage through this volatile operating environment. With that, I'll now turn the call over to David Gordon.