UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC FORM 8-K

Transcription

1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): July 26, 2018 THE CHEESECAKE FACTORY INCORPORATED (Exact Name of Registrant as Specified in Charter) Delaware (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) Malibu Hills Road Calabasas Hills, California (Address of Principal Executive Offices) Registrant s Telephone Number, Including Area Code (818) Not Applicable (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below): o Written communication pursuant to Rule 425 under the Securities Act (17 CFR ) o o o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR a-12) Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR d-2(b)) Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR e-4(c)) Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR ) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR b-2). Emerging growth company o If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

2 ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The following information is intended to be furnished under Item 2.02 of Form 8-K, Results of Operations and Financial Condition. This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act ), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this report, regardless of any general incorporation language in the filing. In a press release dated July 31, 2018, a copy of which is furnished as Exhibit 99.1 to this report, The Cheesecake Factory Incorporated (the Company ) reported financial results for the second quarter of fiscal Total revenues were $593.2 million in the second quarter of fiscal 2018 as compared to $569.9 million in the second quarter of fiscal Net income and diluted net income per share were $28.4 million and $0.61, respectively, in the second quarter of fiscal The Company recorded a pre-tax charge of $2.6 million during the second quarter of fiscal 2018 related to the termination of a lease for one The Cheesecake Factory restaurant. Excluding the after-tax impact from this item, net income and diluted net income per share for the second quarter of fiscal 2018 would have been $30.3 million and $0.65, respectively. Please see the Company s reconciliation of non-gaap financial measures included in the press release furnished as Exhibit 99.1 to this report. Comparable restaurant sales at The Cheesecake Factory restaurants increased 1.4% in the second quarter of fiscal ITEM 8.01 OTHER EVENTS. On July 26, 2018, the Board of Directors (the Board ) of the Company declared a quarterly cash dividend of $0.33 per share which will be paid on August 28, 2018 to the stockholders of record of each share of the Company s common stock at the close of business on August 15, Future dividends, if any, will be subject to Board approval. On July 26, 2018, the Board approved the adoption of a share repurchase plan with J.P. Morgan Securities LLC, pursuant to which the Company is authorized to repurchase shares of its common stock in open market transactions in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, such plan to be effective from August 3, 2018 through August 17, 2018 (the 10b-18 Plan ). The 10b-18 Plan is in addition to an existing share repurchase plan with J.P. Morgan Securities LLC, previously adopted by the Board in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934 (the Current 10b5-1 Plan ), which terminates on July 31, On July 26, 2018, the Board also approved the adoption of a new share repurchase plan with J.P. Morgan Securities LLC, intended to qualify for the safe harbor under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the New 10b5-1 Plan ). The New 10b5-1 Plan will become effective on August 31, 2018 and terminate on February 1, 2019, unless terminated sooner in accordance with its terms. Purchases may be made in the open market or through privately negotiated transactions in support of the Company s share repurchase plan. Purchases in the open market will be made in compliance with Rule 10b-18 under the Securities Exchange Act of The Company continues to expect to return substantially all of its free cash flow to shareholders in the form of dividends and share repurchases.

3 On July 31, 2018, the Company posted an updated Investor Presentation on the Company s Investor Relations website at investors.thecheesecakefactory.com. A copy of the presentation is attached hereto as Exhibit 99.2 and is incorporated by reference herein. ITEM 9.01 (d) FINANCIAL STATEMENTS AND EXHIBITS. Exhibits 99.1 Press release dated July 31, 2018 entitled, The Cheesecake Factory Reports Results for Second Quarter of Fiscal The Cheesecake Factory Investor Presentation dated August 2018

4 EXHIBIT INDEX Exhibit Description 99.1 Press release dated July 31, 2018 entitled, The Cheesecake Factory Reports Results for Second Quarter of Fiscal The Cheesecake Factory Investor Presentation dated August 2018

5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 31, 2018 THE CHEESECAKE FACTORY INCORPORATED By: /s/ Matthew E. Clark Matthew E. Clark Executive Vice President and Chief Financial Officer

6 EXHIBIT 99.1 PRESS RELEASE FOR IMMEDIATE RELEASE Contact: Stacy Feit (818) THE CHEESECAKE FACTORY REPORTS RESULTS FOR SECOND QUARTER OF FISCAL 2018 Increases Quarterly Dividend by 14% CALABASAS HILLS, Calif., July 31, 2018 The Cheesecake Factory Incorporated (NASDAQ: CAKE) today reported financial results for the second quarter of fiscal 2018, which ended on July 3, Total revenues were $593.2 million in the second quarter of fiscal 2018 as compared to $569.9 million in the second quarter of fiscal Net income and diluted net income per share were $28.4 million and $0.61, respectively, in the second quarter of fiscal The Company recorded a pre-tax charge of $2.6 million during the second quarter of fiscal 2018 related to the termination of a lease for one The Cheesecake Factory restaurant. Excluding the after-tax impact from this item, net income and diluted net income per share for the second quarter of fiscal 2018 would have been $30.3 million and $0.65, respectively. Please see the Company s reconciliation of non-gaap financial measures at the end of this release. Comparable restaurant sales at The Cheesecake Factory restaurants increased 1.4% in the second quarter of fiscal Comparable sales at The Cheesecake Factory and core restaurant operating performance were in line with our expectations during the second quarter, said David Overton, Chairman and Chief Executive Officer. However, $4.6 million in higher group medical insurance costs year-over-year and $4.5 million in increased legal expenses impacted our bottom line results this quarter. Overton continued, We generated over $65 million in operating cash flow during the quarter. The consistency of our cash flow enabled us to increase our dividend for the sixth consecutive year. We continue to execute a balanced capital allocation strategy, investing in long-term growth while returning substantially all of our free cash flow to shareholders through our dividend and share repurchase program. Development The Company now expects to open as many as six restaurants in fiscal 2018, including one Grand Lux Cafe, scheduled to open in August 2018, as well as the first location of Social Monk Asian Kitchen, a fast casual concept under development and expected to open in the fourth quarter of Malibu Hills Road, Calabasas Hills, CA Telephone (818) Fax (818)

7 In addition, the Company now expects three restaurants to open internationally under licensing agreements in fiscal This includes the second location in Saudi Arabia, which opened in April. Capital Allocation The Company s Board of Directors declared a quarterly cash dividend of $0.33 per share on the Company s common stock. The dividend is payable on August 28, 2018 to shareholders of record at the close of business on August 15, During the second quarter of fiscal 2018, the Company repurchased approximately 140,000 shares of its common stock at a cost of $7.1 million. Conference Call and Webcast The Company will hold a conference call to review its results for the second quarter of fiscal 2018 today at 2:00 p.m. Pacific Time. The conference call will be webcast live on the Company s website at investors.thecheesecakefactory.com and a replay of the webcast will be available through August 30, About The Cheesecake Factory Incorporated The Cheesecake Factory Incorporated created the upscale casual dining segment in 1978 with the introduction of its namesake concept. The Company, through its subsidiaries, owns and operates 213 full-service, casual dining restaurants throughout the U.S.A., including Puerto Rico, and Canada, comprised of 198 restaurants under The Cheesecake Factory mark; 13 restaurants under the Grand Lux Cafe mark; and two restaurants under the RockSugar Southeast Asian Kitchen mark. Internationally, 21 The Cheesecake Factory restaurants operate under licensing agreements. The Company s bakery division operates two bakery production facilities, in Calabasas Hills, CA and Rocky Mount, NC, that produce quality cheesecakes and other baked products for its restaurants, international licensees and third-party bakery customers. In 2018, the Company was named to the FORTUNE Magazine 100 Best Companies to Work For list for the fifth consecutive year. To learn more about the Company, visit FORTUNE and FORTUNE 100 Best Companies to Work For are registered trademarks of Time Inc. and are used under license. From FORTUNE Magazine, March 1, Time Inc. Used under license. FORTUNE and Time Inc. are not affiliated with, and do not endorse products or services of, The Cheesecake Factory Incorporated. Safe Harbor Statement This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements, including uncertainties related to the Company s ability to: deliver comparable sales growth; provide a differentiated experience to guests; outperform the casual dining industry and increase its market share; leverage sales increases and manage flow through; manage through cost pressures, including increasing wage rates, group medical insurance costs and legal expenses, and stabilize margins; grow earnings; remain relevant to consumers; attract and retain qualified management and other staff; manage risks associated with the magnitude and complexity of regulations in the states and municipalities where the Company s restaurants are located; increase shareholder value; find suitable sites and manage increasing construction costs; profitably expand its concepts domestically and in Canada, and work with its licensees to expand its concept internationally; support the growth of North Italia and Flower Child restaurants; develop the Social Monk Asian Kitchen fast casual concept; expand consumer packaged goods licensing revenue; utilize its capital effectively and continue to increase cash dividends and repurchase its shares; and factors outside of the Company s control including: economic and political conditions that impact consumer confidence and spending; impact of recently enacted tax reform; acceptance and success of The Cheesecake Factory in international markets; acceptance and success of the North Italia and Flower Child Malibu Hills Road, Calabasas Hills, CA Telephone (818) Fax (818)

8 restaurants and the Social Monk Asian Kitchen fast casual concept; the risks of doing business abroad through Company-owned restaurants and/or licensees; foreign exchange rates and potential changes in NAFTA and cross border taxation; changes in unemployment rates; the economic health of the Company s landlords and other tenants in retail centers in which its restaurants are located; the economic health of suppliers, licensees, vendors and other third parties providing goods or services to the Company; adverse weather conditions in regions in which the Company s restaurants are located; factors that are under the control of government agencies, landlords and other third parties; the risks, costs and uncertainties associated with opening new restaurants; and other risks and uncertainties detailed from time to time in the Company s filings with the Securities and Exchange Commission ( SEC ). Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. Forward-looking statements speak only as of the dates on which they are made and the Company undertakes no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by securities laws. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements and the discussion of risk factors contained in the Company s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as filed with the SEC, which are available at Malibu Hills Road, Calabasas Hills, CA Telephone (818) Fax (818)

9 The Cheesecake Factory Incorporated Condensed Consolidated Financial Statements (unaudited; in thousands, except per share and statistical data) Consolidated Statements of Income July 3, 2018 July 4, 2017 July 3, 2018 July 4, 2017 Percent of Percent of Percent of Percent of Amount Revenues Amount Revenues Amount Revenues Amount Revenues Revenues $ 593, % $ 569, % $ 1,183, % $ 1,133, % Costs and expenses: Cost of sales 133, % 128, % 268, % 257, % Labor expenses 212, % 193, % 423, % 386, % Other operating costs and expenses 143, % 137, % 292, % 273, % General and administrative expenses 41, % 35, % 80, % 71, % Depreciation and amortization expenses 23, % 23, % 47, % 46, % Impairment of assets and lease terminations 2, % % 2, % 1, % Preopening costs 1, % 1, % 2, % 2, % Total costs and expenses 558, % 519, % 1,117, % 1,039, % Income from operations 34, % 50, % 66, % 93, % Interest and other expense, net (2,908) (0.5)% (1,570) (0.3)% (4,414) (0.4)% (2,826) (0.3)% Income before income taxes 31, % 48, % 61, % 90, % Income tax provision 3, % 10, % 7, % 17, % Net income $ 28, % $ 38, % $ 54, % $ 73, % Basic net income per share $ 0.62 $ 0.80 $ 1.20 $ 1.54 Basic weighted average shares outstanding 45,383 47,732 45,467 47,683 Diluted net income per share $ 0.61 $ 0.78 $ 1.16 $ 1.49 Diluted weighted average shares outstanding 46,570 49,047 46,778 49,127 Selected Segment Information Revenues: The Cheesecake Factory restaurants $ 542,102 $ 520,228 $ 1,082,875 $ 1,035,462 Other 51,076 49, ,994 97,833 Total $ 593,178 $ 569,869 $ 1,183,869 $ 1,133,295 Income/(loss) from operations: (1) The Cheesecake Factory restaurants $ 69,889 $ 75,989 $ 132,006 $ 146,532 Other 3,983 6,291 9,794 12,929 Corporate (39,329) (32,062) (75,706) (65,680) Total $ 34,543 $ 50,218 $ 66,094 $ 93,781 (1) Includes $2.6 million in the thirteen weeks and twenty six weeks ended July 3, 2018 of lease termination costs related to the closure of one The Cheesecake Factory restaurant, and $0.4 million and $1.2 million in the thirteen weeks and twenty six weeks ended July 4, 2017, respectively, of accelerated depreciation and impairment expense related to the relocation of one The Cheesecake Factory restaurant and the lease termination of one The Cheesecake Factory restaurant. These amounts were recorded in impairment of assets and lease terminations in the condensed consolidated statements of income. Selected Consolidated Balance Sheet Information July 3, 2018 January 2, 2018 Cash and cash equivalents $ 29,369 $ 6,008 Total assets 1,306,639 1,333,060 Total liabilities 693, ,530 Stockholders equity 612, , Weeks Ended 13 Weeks Ended 26 Weeks Ended 26 Weeks Ended The Cheesecake Factory Supplemental Information July 3, 2018 July 4, 2017 July 3, 2018 July 4, 2017 Comparable restaurant sales 1.4% -0.5% 1.7% -0.1% Restaurants opened during period Restaurants open at period-end Restaurant operating weeks 2,582 2,517 5,169 5, Malibu Hills Road, Calabasas Hills, CA Telephone (818) Fax (818)

10 Reconciliation of Non-GAAP Results to GAAP Results In addition to the results provided in accordance with Generally Accepted Accounting Principles ( GAAP ) in this press release, the Company is providing non-gaap measurements which present net income and diluted net income per share excluding the impact of certain items. The non-gaap measurements are intended to supplement the presentation of the Company s financial results in accordance with GAAP. The Company believes that the presentation of these items provides additional information to facilitate the comparison of past and present financial results. The Cheesecake Factory Incorporated Reconciliation of Non-GAAP Financial Measures (unaudited; in thousands, except per share data) July 3, 2018 July 4, 2017 July 3, 2018 July 4, 2017 Net Income (GAAP) $ 28,353 $ 38,166 $ 54,382 $ 73,209 After-tax impact from: - Impairment of assets and lease terminations (1) 1, , Adjusted net income (non-gaap) $ 30,264 $ 38,433 $ 56,293 $ 73,948 Diluted net income per share (GAAP) After-tax impact from: $ 0.61 $ 0.78 $ 1.16 $ Impairment of assets and lease terminations Adjusted diluted net income per share (non-gaap) $ $ $ $ (1) The pre-tax amount associated with the items was $2.6 million in the thirteen and twenty six weeks ended July 3, 2018, and $0.4 million and $1.2 million, in the thirteen and twenty six weeks ended July 4, 2017, respectively. These amounts were recorded in impairment of assets and lease terminations Malibu Hills Road, Calabasas Hills, CA Telephone (818) Fax (818)

11 Exhibit ,..,., _ Investor Presentation August 2018

12 Safe Harbor Statement This presentation contains forward-looking statements about our current and presently expected performance trends, growth plans, business goals and other matters. These statements are forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Acts ). These forward-looking statements include without limitation, statements with respect to our ability to: provide a differentiated experience to guests; deliver comparable sales growth; outperform the casual dining industry; leverage sales increases and manage flow through; deliver consistent financial performance; increase shareholder value; find suitable sites and manage increasing construction costs; profitably expand our Company-owned restaurants domestically and in Canada, and work with our licensees to expand our concept internationally; maintain our broad consumer appeal and remain relevant to guests; attract and retain qualified management and other staff; manage risks associated with the magnitude and complexity of regulations in the states and municipalities where the Company s restaurants are located; leverage technology to drive sales and manage costs; maintain our unit economics; manage through industry cost pressures, including increasing wage rates, group medical insurance costs and legal expenses; stabilize and then expand margins; achieve our financial objectives including our long-term objective of 13% - 14% total return to shareholders, on average; produce sufficient finished bakery product to supply our restaurants and our licensees; expand consumer packaged goods licensing revenue; support the growth of the Fox Restaurant concepts; develop the Social Monk Asian Kitchen fast casual concept; utilize capital effectively; continue to repurchase our shares and pay and grow the dividend; and all other statements that are not historical facts, as well as statements that are preceded by, followed by or that include words or phrases such as believe, plan, will likely result, expect, intend, will continue, is anticipated, estimate, project, may, could, would, should and similar expressions. These statements are based on our current expectations and involve risks and uncertainties which may cause results to differ materially from those set forth in such statements. Forward-looking statements are not guarantees of future performance, and undue reliance should not be placed on such statements. These statements are based on our current expectations and involve known and unknown risks and uncertainties that may cause our actual results or performance to differ materially from those expressed or implied by such statements. Although we believe that the assumptions underlying forward-looking statements are currently reasonable, any of the assumptions could be incorrect or incomplete, and there can be no assurance that forward-looking statements will prove to be accurate. Forward-looking statements speak only as of today s date, and we undertake no obligation to publicly update or revise any forward-looking statements to take into account or otherwise reflect subsequent events, corrections in underlying assumptions, or changes in circumstances arising after the date that the forwardlooking statement was made, unless required to do so by law. Please see the full discussion of risks and uncertainties contained in our filings with the Securities and Exchange Commission, including our latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8- K, which are available at The Private Securities Litigation Reform Act of 1995 provides certain safe harbor provisions for forward-looking statements. All forward-looking statements made in this presentation are made pursuant to the Act. 2

13 A Compelling Investment Opportunity Highly differentiated concepts delivering experience a unique guest Diversified growth drivers Sustained track record of consistent financial performance Robust cash flow to support growth and maximize shareholder value 3

14 Company Overview and Key Competitive Advantages 4

15 Our Global Footprint High quality, high profile locations worldwide Saudi (3) UAE (2) Mexico 5 Company-Owned International - Licensed Middle East15 Mexico3 China, Including Hong Kong3 5 Guadalajara City (2) Beijing Shanghai Hong Kong Lebanon (1)Kuwait (3) Bahrain (1) Qatar Arabia (5) Toronto Company-Owned: 213

16 International Licensed Presence Guadalajara Shanghai Abu Dhabi 6 Dubai Festival City

17 The Cheesecake Factory - A Highly Differentiated Concept Bakery 7 Integrated Ambiance, Service and Hospitality Best-in-Class Operational Execution Leader in Menu Innovation

18 Industry Leader in Menu Innovation Breadth of Menu Is a Key Competitive Advantage Quality 250 menu items made fresh from scratch in-house Relevance No veto vote something for everyone across price points Menu updated twice a year Performance Drives sales Continued market share gains Profit Increases sales at full margin 8

19 Dining With Us Is an Experience Ambiance, Service and Hospitality Drive Sales 9

20 Leveraging Technology to Drive Sales 10 Online Ordering Net Promoter- Based Guest Satisfaction Platform Delivery

21 Integrated Bakery The Cheesecake Magic Produces over 70 cheesecakes and other baked desserts Industry- Leading Dessert Sales 16% Enables creativity and quality control 11

22 Broad Consumer Appeal A division of Vice Media LLC With $32 a Moderate Average Check Highest Unit Volumes ($ in millions) $10.6 $25 $22 $22 $21 $21 $5.0 $15 $4.7 Maggianos Yard House BJ'sTexas OliveOutback LongHorn Bonefish Carrabbas Yard House Maggianos Bonefish Outback Carrabbas LongHorn Olive TexasBJ's Roadhouse Garden Garden Roadhouse Source: Latest SEC filings and company presentations 12 $28 $18$17 $8.3$8.1 $5.6 $3.4$3.3$3.0$2.9 #1 Food Quality

23 Strong Consumer Across Channels Engagement It takes more than 30 minutes to prepare a small batch of our Sake Butter Sauce, and that s just one of dozens of sauces that we prepare fresh in-house every day. 5M+ fans 370K followers Millions of Viewers 650K followers 13

24 Capitalizing on the Power of the Brand HomeTM The Cheesecake Factory At 14

25 Best-in-Class Dual Management Operational Execution Industry-Leading Retention Average Tenure by Position Structure Above 4-Walls 29 years 20 years 19 years 17 years 12 years 12 Senior VP of Operations Regional Vice President Area Director of Operations Area Kitchen Operations Manager General Manager Executive Kitchen Manager years FORTUNE and FORTUNE 100 Best Companies to Work For are registered trademarks of Time Inc. and are used under license. From FORTUNE Magazine, March 1, Time Inc. Used under license. FORTUNE and Time Inc. are not affiliated with, and do not endorse products or services of, The Cheesecake Factory Incorporated. 15 EKM EKM EKM EKM EKM EKM Area Kitchen Operations Manager GM GM GM GM GM GM Area Director of Operations

26 Leveraging Technology to Manage Costs 16 Dashboards Automated Production Call Market- Based Labor Analytics Kitchen Management System

27 Diversified Growth Drivers 17

28 The Cheesecake Factory Returns-Focused Growth Opportunity for 300 Domestic & 8-10 Canadian Locations Over Time Site-based strategy Focused on premier locations high street, lifestyle centers and A malls Infill and new markets Target 7,500 10,000 sq. ft. 18 * Illustrative example of target returns for new restaurant openings. Average Unit Economics* Sales $10.6 ~18% $8+ 20% - 25% EBITDA % Cash Capex Investment Cash-on-Cash Return

29 The Cheesecake Factory Expanding International Licensed Presence Continued expansion within current geographies Potential for additional geographies with current licensees Opportunity to add licensees and territories 19 Shanghai $0 Capital Expenditure +1 Per Restaurant in EPS, on Average

30 CAKE 2022 Multiconcept with segment, price point/occasion, real estate and labor model diversification Leveraging brand power, operational estate development expertise excellence, scale, supply chain and real Illustrative Unit Growth Roadmap * * Unit Growth ~20 units per year Near- Term 2019E 2021E 20 *Represent two of Fox Restaurant Concepts highgrowth brands that the Company has made minority investments in. Long-Term Potential Target Size (sq. ft.) 7,500 10,0005,000-6,0003,000 7,000 $1,000/sq. ft.$1,000/sq. ft.$1,000/sq. ft. Unit Economics New Units/Year Top- Line Growth Contribution ~3%1% - 2%1% - 2% Incremental Growth Opportunities

31 Levers to Rebuild Margins Adjusted Operating Margin ~7.5% +50 bps +30 bps +30 bps Maintain flat restaurant margins ~6.4%* Efficiencies, Pricing, Cost & Portfolio Management Labor & Other Inflationary Pressures 2018E 2023E *Adjusted operating margin anticipated in 2018 EPS guidance range provided July 31, 2018, excluding the impact of $4.6 million in higher group medical insurance costs and $4.5 million in increased legal expenses incurred during the second quarter of fiscal Leverage Bakery Technology & Projected Sales Growth International & CPG Flow Through G&A Leverage

32 CAKE 5-Year Plan 22 Top-Line Growth Drivers Comparable Sales Growth ~1% - 2% ~5% Unit Growth Total Top-Line Growth 6% - 7% 2023E Financial Targets Revenues ~$3 billion 6%+ $ % Net Income Margin EPS ROIC

33 Creating Value for Shareholders Long-Term Objective: 13% - 14% Total Return to Shareholders, on Average (EPS + Dividend) Revenue Growth ~6% - 7% Comparable Sales Growth Unit Growth Operating Margin Expansion Share Repurchases Dividend 23 Total Return to Shareholders ~1% - 2% ~5% ~25 bps ~3% ~2%

34 Track Record of Consistent Financial Performance 24

35 Continuing to Outperform the Industry Comparable Sales - Historical 2-year Stack YTD 4.2% 4.1% 4.0% 3.8% 3.3% 2.6% 2.0% 1.6% 1.0% 0.8% 0.4% (0.4)% (0.9)% (1.6)% (2.2)% Knapp-Track Index %

36 Leveraged Sales and Managed Costs Profitability to Support Adjusted Earnings Per Share* $2.83 $ *Please see Appendix for GAAP to non-gaap reconciliations. $2.37 $2.60 $2.10 $1.88 $1.64 $1.42

37 Our Restaurants Generate Significant Cash Flow Free Cash Flow and Strong Balance Sheet Provide Significant Financial ($ millions) Flexibility $128 $120 $112 $ YTD 27 Free cash flow defined as cash flow from operations less capital expenditures/investments. Please see Appendix for GAAP to non-gaap reconciliations and for an explanation regarding an accounting reclassification for prior years. $158 $75 $135 $100 $

38 Effective Capital Allocation Supports Our Financial Objectives $1+ Billion in Share Repurchases Reducing WASO 3% Per Year Committed to Continuing ($ millions) to Grow Dividend 60,446 48,152 $ Dividend Capex / Investment Share Repurchases WASO 28 $42 $27 $50 $36 $146 $184 $30 $123 $109 $141 $172 $101 $158 $154 $139 $114 $106 $52 $86 $77 $42

39 Disciplined, Returns- Focused Growth Has Paid Off Return on Invested Capital (ROIC) 17% 14% 13% ROIC = NOPAT / Average invested capital NOPAT = Income from operations excluding non-recurring expenses (-) income tax provision Invested Capital = Property and equipment + long-term assets + net working capital (-) cash and cash equivalents 29 15%15% 15% 14% 13%

40 A Compelling Investment Opportunity Highly differentiated concepts delivering experience a unique guest Diversified growth drivers Sustained track record of consistent financial performance Robust cash flow to support growth and maximize shareholder value 30

41 Appendix 31

42 Non-GAAP Reconciliation In addition to the results provided in accordance with the Generally Accepted Accounting Principles ( GAAP ) in this presentation, the Company is providing non- GAAP measurements which present diluted net income per share excluding the impact of certain items and free cash flow. The non- GAAP measurements are intended to supplement the presentation of the company s financial results in accordance with GAAP. The company believes facilitate that the presentation of these items provides additional information to the comparison of past and present financial results. 32

43 Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non- GAAP Financial Measures ($ in thousands, except per share data) Fiscal Year Net Income (GAAP) After-tax impact from: - Impairment of assets and lease terminations (1) - Partial IRS settlement (2) - Unwinding of interest rate collars (3) - Proceeds from variable life insurance contract (4) - Deferred tax revaluation (5) Adjusted net income (non-gaap) $ 81,713 $ 95,720 $ 98,423 $ 114,356 $ 101,276 $ 116,523 $ 139,494 $ 157, , (1,506) , (419) - (337) 418 3, , (38,525) $ 86,138 $ 95,142 $ 103,726 $ 114,019 $ 101,694 $ 120,130 $ 139,562 $ 125,073 Diluted net income per share (GAAP) After-tax impact from: - Impairment of assets and lease terminations - Partial IRS settlement - Unwinding of interest rate collars - Proceeds from variable life insurance contract - Deferred tax revaluation Adjusted diluted net income per share (non- GAAP) (6) $ 1.35 $ 1.64 $ 1.78 $ 2.10 $ 1.96 $ 2.30 $ 2.83 $ (0.03) (0.01) (0.01) (0.80) $ 1.42 $ 1.64 $ 1.88 $ 2.10 $ 1.97 $ 2.37 $ 2.83 $ 2.60 (1) The pre-tax amounts associated with these items in fiscal 2011, 2012, 2013, 2014, 2015, 2016 and 2017 were $1,547, $9,536, $(561), $696, $6,011, $114 and $10,343, respectively, and were recorded in impairment of assets and lease terminations. (2) The pre-tax amounts associated with this item were $719 and $1,075 and were recorded in interest and other (expense)/income, net and income tax provision, respectively. (3) The pretax amount associated with this item was $7,376 and was recorded in interest expense. (4) This item is non-taxable and is recorded in interest and other (expense)/income, net. (5) Fiscal 2017 includes a $38.5 million benefit to the income tax provision related to tax reform enacted in December (6) Adjusted diluted net income per share may not add due to rounding. 33

44 Non-GAAP Reconciliation The Cheesecake Factory Incorporated Reconciliation of Non- GAAP Financial Measures ($ in millions) Fiscal Year YTD Cash Flow from Operations (1) Capital Expenditures / Investments Free Cash Flow $ $ $ $ $ $ $ $ $ $ 128 $ 120 $ 112 $ 107 $ 135 $ 94 $ 158 $ 100 $ 75 (1) The excess tax benefit related to stock options exercised is no longer reclassified from cash flows from operating activities to cash flows from financing activities in the consolidated statements of cash flows. The consolidated statements of cash flows for fiscal 2016, 2015, 2014, 2013, 2012, 2011 and 2010 have been adjusted to conform to the current year presentation. 34