The Cheesecake Factory Inc. reported a 6-percent dip in net income for the third quarter ended Sept. 30, as costs for butter and dairy rose, the company said Wednesday.
The Calabasas Hills, Calif.-based casual-dining operator said some cost increases were “unprecedented,” as it saw third-quarter profit decline to $24.2 million, or 48 cents per share, from $27.5 million the previous year.
“There are clearly some significant external cost headwinds in our current environment, including unprecedented increases in butter and related dairy prices during the third quarter, resulting in about $4.3 million of additional expense compared to the third quarter of 2013,” Cheesecake Factory chairman and chief executive David Overton said in a statement.
Those increases, Overton added, are “beginning to correct.”
During the quarter, licensee partners opened two Cheesecake Factory restaurants in the Middle East and one in Mexico. The company, which has seven Cheesecake Factory units internationally, expects as many as four licensed restaurants to open abroad this year.
The company operates 185 full-service restaurants in the United States and Puerto Rico, including 173 restaurants under The Cheesecake Factory brand and 11 restaurants under the Grand Lux Café brand. It has one RockSugar Pan Asian Kitchen location.
3Q NET INCOME
Result: $24.2 million, 48 cents per share% Decrease: 16% (from $27.5 million, or 50 cents per share)
3Q REVENUE
Result: $499.1 million% Increase: 6.4% (from $469.7 million)
3Q SAME-STORE SALES
% Increase systemwide: 1.8%
% Increase Cheesecake Factory: 2.1%
% Decrease Grand Lux Café: 2%
Source: Company report
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