163072AA9 Filings — The Cheesecake Factory Incorporated - FilingSpy
163072AA9
The Cheesecake Factory Incorporated
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A restaurant company running one of America's most recognizable dining chains, The Cheesecake Factory, alongside North Italia, Flower Child, and other brands, with a bakery division that sells its famous cheesecakes to stores and clubs. It grew from a cheesecake recipe Evelyn Overton found in a Detroit newspaper in the 1940s; her son David opened the first Beverly Hills restaurant in 1978 to showcase her desserts, which he called "the Cadillac of cheesecakes." Founder David was a professional drummer before he turned to restaurants.
Q2 FY2026 operating income rose 42.8% sequentially to $78.6M as traffic returned to The Cheesecake Factory.
Customer traffic at The Cheesecake Factory turned positive for the first time in over a year. rose 7.7% to $1,029.6M and rose 23.7% to $1.41 as a 5.8% gain — including 2.7% higher traffic — leveraged labor costs down 80 to 34.1% of revenue. The company carries no debt on its and plans up to 26 new restaurants this year.
Key takeaways
The Cheesecake Factory rose 5.8%, reflecting a 3.1% average check increase and 2.7% higher customer traffic — a reversal of the traffic declines that ran through fiscal 2025 and early 2026.
rose 7.7% to $1,029.6M and rose 42.8% sequentially and 21.3% to $78.6M, with widening 2.0 points sequentially to 7.6%.
Labor expenses fell 80 to 34.1% of and other operating costs declined 30 bps to 26.5% on sales , while food and beverage costs rose 20 bps to 21.8% on higher meat, produce, and seafood costs partly offset by lower dairy.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 7.7% to $1.03B on 5.8% Cheesecake Factory comparable sales growth and new units; margins improved on sales leverage.
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Total revenues increased 7.7% to $1,029.6M, driven by a 5.8% increase at The Cheesecake Factory and contributions from new restaurants.
The Cheesecake Factory growth reflected a 3.1% average check increase (3.0% pricing, 0.1% mix) and 2.7% higher customer traffic.
rose 23.7% to $1.41 and rose 24.8% to $68.4M; rose 222.2% year over year to $49.3M.
The company opened 7 restaurants in H1 FY2026 toward a plan of up to 26 for the year, and had $366.5M in with no outstanding balance.
North Italia fell about 3% on 5% lower traffic, while Flower Child comparable sales rose about 13% including 3% pricing.
What changed
The flagged Q2 FY2025 traffic watch — a 1.1% decline at The Cheesecake Factory — reversed to 2.7% growth in Q2 FY2026, the first positive traffic reading after four straight quarters of decline in FY2024 and a 2.3% full-year drop in FY2025.
The Q2 FY2025 margin watch (post-debt-charge lap) settled at 6.6% implied net margin this quarter versus 5.7% a year earlier, with no debt-extinguishment charge repeating.
against the ~$210M FY2026 target was $49.3M in Q2 and $53.3M in Q1, tracking toward the annual plan after FY2025 free cash flow of $155.1M.
Food and beverage costs at 21.8% of rose 20 from the 21.6% Q2 FY2025 level as beef and produce inflation arrived, with no hedging contracts in place per the risk disclosure.
and lease termination charges were not reported in this quarter; FY2025 recorded $23.0M, up from $13.6M in FY2024, the prior flagged watch item.
What to watch
Q3 FY2026 Cheesecake Factory traffic trend to confirm the 2.7% Q2 gain is a sustained reversal rather than a one-quarter swing.
Food and beverage costs as beef, produce, and seafood inflation develops with no hedging contracts and a 1% cost rise equal to $2.2M quarterly sensitivity.
across H2 as reaches the ~$210M full-year target; H1 produced $102.6M combined.
Progress on the up-to-26 new restaurant openings, with 7 completed in H1 FY2026.
North Italia fell ~3% on 5% lower traffic, partially offset by 2% average check growth; Flower Child comparable sales rose ~13% including 3% pricing.
Restaurant-level margins benefited from : labor expenses fell 80 to 34.1% of revenues, and other operating costs declined 30 bps to 26.5%.
Food and beverage costs rose 20 to 21.8% of revenues, as higher meat, produce, and seafood costs were partly offset by lower dairy pricing.
The company opened 7 restaurants in H1 FY2026, expects up to 26 openings for the full year, and had $366.5M in availability with no outstanding balance.
Quantitative and Qualitative Disclosures About Market Risk
The company reports no hedging contracts, quantifies food-cost sensitivity, and notes minimal interest-rate exposure with no outstanding borrowings.
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A hypothetical 1% increase in food costs would have negatively impacted by $2.2 million in Q2 fiscal 2026, up from $2.0 million in Q2 fiscal 2025.
As of June 30, 2026, the company had no outstanding borrowings under its Loan Agreement and no commodity hedging contracts in place.
The company negotiates short- and long-term agreements for principal commodities like dairy and poultry but warns these efforts may not succeed or yield intended benefits.
A hypothetical 10% decline in the deferred compensation plan assets would not affect pre-tax income but would reduce by $3.6 million due to tax treatment.
Commodity costs remain subject to volatility from weather, geopolitics, tariffs, and currency swings, and the company may be unable to pass increases on through menu prices.
A description of the risk factors associated with our business is contained in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended December 30, 2025 (“Annual Report”). These cautionary statements are to be used as a reference in connectio…
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A description of the risk factors associated with our business is contained in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended December 30, 2025 (“Annual Report”). These cautionary statements are to be used as a reference in connection with any forward-looking statements. The factors, risks and uncertainties identified in these cautionary statements are in addition to those contained in any other cautionary statements, written or oral, which may be made or otherwise addressed in connection with a forward-looking statement or contained in any of our subsequent filings with the SEC.