The Cheesecake Factory Incorporated

I will be your conference operator today. At this time, I would like to welcome everyone to the Cheesecake Factory Incorporated first quarter 2023 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. We ask today that you limit yourself to one question and one follow-up. Thank you. Etienne Marcus, Vice President of Finance and Investor Relations, you may begin your conference.

Good afternoon and welcome to our first quarter fiscal 2023 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. Factual 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, when discussing comparable sales, we will be referring to comparable sales on an operating week basis, unless specifically stated otherwise. We will also be presenting results on an adjusted basis which exclude impairment of assets and lease terminations and acquisition related expenses. 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 first 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 entered 2023 with positive momentum and carried forward that trend to deliver a solid first quarter with our top and bottom line performance in line with expectations. First quarter consolidated revenues increased 9.1%, over the prior year to 866 million. Despite the record rainfall in California, our largest market, the Cheesecake Factory Restaurant's comparable sales increased 5.7% versus prior year and 14.9% versus 2019. And North Italia comparable sales increased 9% versus prior year and 30% versus 2019. Demonstrating the strength and the resilience of our broader portfolio, we delivered positive first quarter comparable sales growth across all of our concepts. The extensive and growing appeal of our differentiated concepts support our belief that we are uniquely well positioned to capitalize on the continued favorable consumer demand for experiential dining. Execution within the restaurant's four walls was outstanding. with our operators driving solid flow through to support profitability. This combined with input cost consistent with our projections resulted in adjusted net income margin of 3.5% for the quarter at the high end of our guidance. On the development front, we opened two FRC restaurants during the first quarter, including Flower Child. While we continue to experience some delays in openings, due to supply chain challenges and permit approval delays, at this time, we still expect to open as many as 20 to 22 new restaurants in fiscal year 2023, including five to six Cheesecake Factories, five to six North Italia's, and 10 FRC restaurants, including three to four flower child locations. Additionally, we anticipate two to three Cheesecake Factory restaurants to open internationally under licensing agreements. As we look ahead, we remain intently focused on delivering exceptional food quality, service, and hospitality, the hallmarks of our success, to drive long-term profitable sales growth. At the center of our execution capability are our people, the driving force of our company, who enable us to deliver delicious, memorable experiences for our guests every day. To that end, we are honored to have been named to Fortune Magazine's 100 Best Companies to Work For list for the 10th consecutive year. This recognition is a testament to our strong culture, industry-leading training, and commitment to our employees. We believe these attributes will continue to differentiate us as an employer of choice. With that, I'll now turn the call over to David Gordon to provide some additional details on our operations and marketing.