The Cheesecake Factory Incorporated

Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome you to the Cheesecake Factory Incorporated fourth quarter 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 at that time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, simply press star one again. Thank you. I would now like to turn the conference over to Etienne Marcus, Vice President, Investor Relations and Finance. Etienne, please go ahead.

Good afternoon and welcome to our fourth 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 will 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, impairment of assets, and lease termination expenses, and other items. 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 fourth 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. We closed out the year with a solid fourth quarter delivering stable top line performance and profitability. While the restaurant industry continued to face a more challenging operating environment, including weather related impacts, our business remained steady with revenue for the quarter finishing within our expected range. I'm very proud of how our teams navigated through the environment and continue to deliver delicious, memorable experiences for our guests. Our operators managed the factors within their control exceptionally well, driving year-over-year improvements in labor productivity, wage management, retention, and guest satisfaction. This strong operational execution supported margins and adjusted diluted net income per share, finishing toward the higher end of our expectations. This performance reflects the resilience of our high-quality concepts and the strength of our operators. Reflecting on 2025, it was a year of meaningful progress for our company. Despite a dynamic macro backdrop and a highly competitive restaurant landscape, we delivered strong results Sales growth across our core concepts and the most new restaurant openings in a single year supported record annual revenue and adjusted diluted earnings per share. And our operators' consistent execution throughout the year drove meaningful profitability growth. Adjusted restaurant level profit margins at the Cheesecake Factory increased 60 basis points year over year to 17.6%. with margin expansion also realized at North Italia and Flower Child. Culinary innovation remains a core strength and an important differentiator for our business. The new menu items we introduced across a wide range of categories and price points continue to resonate well with guests and support our broad appeal. These offerings reinforce the breadth and the value of our menu, while keeping it relevant and competitively positioned without relying on discounting. Turning to development, during the fourth quarter, we opened two Cheesecake Factory restaurants, two North Italia locations, and three FRC restaurants. Subsequent to quarter end, we opened one Flower Child and closed four restaurants, including two Cheesecake Factory restaurants, one Grand Luxe Cafe, and one FRC restaurant. With seven new restaurants opened in the fourth quarter, we finished the year with 25 new openings, delivering approximately 7% unit growth for 2025. Looking ahead, we expect to open as many as 26 restaurants in 2026. With a strong development pipeline in place, we remain confident in our ability to achieve our development goals. We also anticipate one to two Cheesecake Factory restaurants to open internationally under licensing agreements. Finally, underscoring our confidence in the strength and consistency of the business, we announced an increase to our share repurchase authorization and raised our quarterly dividend for the first quarter. These decisions reflect our disciplined approach to capital allocation and our ongoing commitment to returning capital to shareholders while continuing to invest thoughtfully in the long-term growth of our company. With that, I will now turn the call over to David Gordon to provide an operational update.