Cheesecake Factory boosts revenue as flagship sales accelerate
Total revenues rose to $1,029.6 million in the second quarter, according to the company.
The Cheesecake Factory (CAKE) reported total revenues of $1,029.6 million for the second quarter, an increase from $955.8 million in the prior-year period.
The results marked a turnaround in momentum for the company's primary brand. Comparable restaurant sales at The Cheesecake Factory restaurants increased 5.8% year-over-year. This growth accelerated from a 1.6% increase in the first quarter and a 2.2% decline in the fourth quarter of the previous fiscal year.
Net income rose to $68.4 million from $54.8 million in the second quarter of the prior year. The company's operating margin expanded to 7.6%, up from 6.8% in the same period last year.
Efficiency gains in staffing contributed to the margin expansion. Labor expenses as a percentage of revenue decreased to 34.1% from 34.9%. These gains were partially offset by food and beverage costs, which rose slightly to 21.8% of revenue from 21.6%.
Performance was mixed across the company's portfolio. While the flagship brand grew, North Italia comparable restaurant sales declined 3% year-over-year, a steeper drop than the 1% decline recorded in the second quarter of the prior year.
The company opened four new restaurants during the quarter, including two North Italia, one Flower Child, and one FRC location. This followed three openings in the first quarter. For the full fiscal 2026, the company now expects to open as many as seven FRC locations, a decrease from the projection of as many as eight made in the fourth quarter of the previous year.
Cheesecake Factory reduced its total outstanding debt to $575 million after repaying the remaining $69.0 million principal amount of 0.375% convertible senior notes due 2026.