The Cheesecake Factory Incorporated

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cheesecake Factory Incorporated Q2 2025 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 that time, simply press star, then the number one on your telephone keypad. I would now like to turn the call over to Etienne Marcus, Vice President of Finance and Investor Relations. Sir, please go ahead.

Good afternoon, and welcome to our second quarter fiscal 2025 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 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 acquisition-related items and impairment of assets and lease termination expenses, Explanations 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 financial results and provide commentary on our financial outlook before opening the call up to questions. With that, I'll turn the call over to David Overton. Thank you, Etienne.

Our second quarter results exceeded expectations with consolidated revenues and adjusted earnings per share setting new milestones for the company. These solid financial results are fueled by operational excellence and sustained demand across our differentiated high-quality concepts. Second quarter comparable sales at the Cheesecake Factory restaurants increased 1.2%, driving record high average weekly sales and further elevating our industry-leading annualized unit volumes to nearly 12.8 million for the quarter. Strategic innovation in our menu has always been a key pillar of our success. Reflecting that ongoing focus, we are now introducing our latest menu, which features 14 new dishes across two innovative categories. And tomorrow in celebration for National Cheesecake Day, we are launching our newest cheesecake, Peach Perfect with Raspberry Drizzle. We believe our continued focus on culinary innovation keeps our menu highly relevant without relying on discounting and combined with the strength of our best in class operators positions us to stand out in a competitive landscape. Thanks to the outstanding execution of our operators, we delivered strong flow through and meaningful improvement in profitability. In fact, Cheesecake Factory's four-wall restaurant margin increased to 18.5%, up 80 basis points year over year, and the highest level recorded in eight years. Turning to development, we successfully opened eight restaurants in the second quarter, including two Cheesecake Factory restaurants, one North Italia, three flower child, and two FRC restaurants. Subsequent to quarter end, we opened one FRC restaurant and one international cheesecake factory restaurant in Mexico under a licensing agreement. We are pleased with the progress we've made on new unit growth so far this year and continue to expect to open as many as 25 new restaurants in 2025. Additionally, we anticipate two Cheesecake Factory restaurants to open internationally under a licensing agreement. As we look ahead, the strong demand for our distinct dining experiences reaffirms our confidence in the long-term trajectory of our portfolio. Our results clearly demonstrate the strength of our platform and the effectiveness of our strategy to deliver sustainable growth and value. With that, I will now turn the call over to David Gordon to provide an operational update.