The fast-casual restaurant brand’s 11% same-store sales increase in Q4 and visit frequency stand out
The Cheesecake Factory Inc., parent to such brands as North Italia and others, saw fourth quarter same-store sales at its fast-casual Flower Child brand increase 11%, which eclipsed sales increases at its other concepts, the company said Wednesday.
Executives at the Calabasas Hills, Calif.-based company, which released earnings for its Dec. 31-ended fourth quarter, said in a call with analysts that while customers may visit casual-dining Cheesecake Factory four or five times a year, patronage of the Flower Child is more frequent.
“Flower Child, being a fast-casual, you have a use case where people could be coming very frequently,” David Gordon, Cheesecake Factory president, said.
That could be a few times a week, he added, and the use is different, with Flower Child primarily for lunch and Cheesecake Factory for dinner. The Flower Child daypart split is about 65% lunch and 35% dinner, and the concept has about 55% off-premises sales, higher than at the company’s other concepts.
“We continue to be highly optimistic about Flower Child's growth potential with sales trending substantially higher across the concept,” Gordon said. “This momentum was evident in the fourth quarter. Flower Child comparable sales increased by 11%, significantly outpacing the Black Box fast-casual dining index, which was relatively flat for the quarter. The sales improvement resulted in average weekly sales of $83,000, up 10% from the fourth quarter of 2023.”
The company opened two new Flower Child units in the fourth quarter and plans to open six or seven new Flower Child restaurants this year.
“With strong consumer demand and experienced operations team, the support infrastructure in place and an attractive unit economic profile, we believe Flower Child is poised for accelerated growth,” Gordon said.
Matt Clark, Cheesecake Factory’s chief financial officer, added that Flower Child’s double-digit same-store sales had increased during the year.
“A couple of those levers were the introduction of catering specifically, that's been adding to the comp,” Clark said. “We've been gaining traffic, certainly the brand awareness, but also the execution. Remember that we did quite a bit of work to put in things like KDS [kitchen display system] to improve the coordination between the on-premises and the off-premises component of it. And certainly, the relaunch of the rewards program for Flower Child basically at the beginning of 2024 was a contributor.”
Clark added, “It's not one piece, but it's in aggregate, each one of those pieces continues to contribute a couple of points to the growing comp.”
Gordon said the company remained “very bullish” on its rewards program, though it did not plan to move Cheesecake Rewards to other concepts.
“Member acquisition continues to exceed our own internal expectations throughout Q4 and even into January, it was positive,” Gordon said, though he did not reveal numbers.
For the fourth quarter ended Dec. 31, The Cheesecake Factory’s net income was $41.2 million, or 83 cents a share, up from $12.7 million, or 26 cents a share, in the same period a year ago. Revenues in the quarter were $921 million compared to $877 million in the prior-year period.
Same-store sales at The Cheesecake Factory restaurants increased 1.7% in the fourth quarter.
During the fourth quarter, the company opened nine new restaurants, including three North Italia locations, two Flower Child locations, two Fox Restaurant Concept restaurants, and it relocated two Cheesecake Factory restaurants.
This year, the company has opened five new restaurants, including one North Italia location, two Flower Child locations and two FRC restaurants.
The company expects to open as many as 25 new restaurants in fiscal 2025.
The Cheesecake Factory owns and operates 352 restaurants throughout the United States and Canada under brands including The Cheesecake Factory, North Italia, Flower Child and other Fox Restaurant Concept brands, like Culinary Dropout and Doughbird. Internationally, 34 Cheesecake Factory restaurants operate under licensing agreements.
Contact Ron Ruggless at [email protected]
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