Cheesecake Factory (CAKE) Q1 Conference Call Highlights; Increased Guest Visits, New Offerings

April 24, 2009 4:06 PM EDT

Cheesecake Factory (Nasdaq: CAKE) reported strong Q1 EPS results yesterday, causing CAKE to rise 20% to around $18. Cheesecake Factory reported Q1 EPS of $0.17, compared to the analyst estimate of $0.10. Revenue for the quarter was $392.8 million, versus the consensus of $382 million.

Below are Cheesecake Factory conference call highlights:

• Results for Q1 were better than we expected, primarily as a result of a significant upturn in comparable sales relative to Q4.
  
• Guests are still reducing their beverage orders, both alcoholic and non alcoholic, but dessert orders are up year-over-year helping to boost our average check.
  
• Focused on guest satisfaction, product development, cost savings, and debt repayment.
  
• Realized over $4 million in savings during the first quarter
  
• On a product development front, the rollout of Cheesecake's Small Plates & Snacks menu was completed in mid-March and the outcome that we have seen to-date has been positive.
  
• Guests who ordered from the Small Plates & Snacks menu during the first quarter had check averages that were higher than those for guests who did not order from this menu.
  
• Cheesecake Factory repaid $25 million of the $375 million balance on revolving credit facility in the first quarter, while increasing our cash balances from year-end levels.
  
• Comparable sales at the Cheesecake Factory and Grand Lux Cafe restaurants decreased 3.4% for the quarter.
  
• Cash and marketable securities balance $89 million at quarter-end.
  
• Cheesecake Factory generated approximately $30 million in free cash flow during the quarter.

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