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 second quarter 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 1. Thank you. Etienne Marcus, Vice President of Finance and Investor Relations, you may begin your conference.

Thank you. Good afternoon and welcome to our second quarter fiscal 2022 earnings call. On the call with me 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 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.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 review our second quarter results and provide a financial update. Following that, we'll open the call to questions. With that, I'll turn the call over to David Overton.

Thank you, Etienne. We were pleased with our overall sales performance, with second quarter sales finishing within our expected range, despite an increase in COVID-19 cases and consumer headwinds. Comparable sales at the Cheesecake Factory restaurants increased 4.7% in the second quarter of 2022. Relative to the second quarter of 2021, and 13.1% versus the second quarter in 2019. And once again, outperform the broader casual dining industry. Our restaurants remain extremely busy with annualized unit volumes at the Cheesecake Factory restaurants reaching 12.3 million for the quarter. These industry leading volumes demonstrate that the Cheesecake Factory continues to be one of the most differentiated casual dining concepts. Our unwavering focus on menu innovation, service, hospitality, and operational excellence enables us to maintain broad demographic appeal and relevance. On Saturday, we're launching our newest flavor of cheesecake, Classic Basque Cheesecake, a unique crustless cheesecake with a burnt top and an ultra-creamy custard-like center. The Cheesecake Factory's version is a classic recipe covered with fresh berries and whipped cream. In addition, our new summer menu rollout began this week as we lean into one of our key competitive differentiators, our distinctive menu, to drive incremental sales. Turning to development, all of the sites we have been working on remain active in our pipeline. However, opening dates continue to be affected by supply chain challenges and permit approval delays. As such, we now expect to open as many as 15 new restaurants in fiscal year 2022, including four Cheesecake Factory restaurants, four North Italia's, and seven other FRC restaurants, including three Flower Child locations. We also currently expect one Cheesecake Factory restaurant to open internationally under a licensing agreement. Despite these timing challenges, which are out of our control, we remain on track to achieve our annual unit growth goal of 7% next year. As I stated on our last earnings call, I recognize that the environment is dynamic and we continue to face substantial challenges marked by high commodity inflation, a tight labor market, and further supply chain disruptions. Despite these headwinds, we remain committed to protecting our four wall margins over time, and we will adjust pricing to support this objective. To that point, we are in the process of implementing a 4.25 price increase with our summer menu change, and we will continue to closely monitor the inflationary environment to determine what level of additional pricing may be needed. With that, I'll now turn the call over to David Gordon.