CHEESECAKE FACTORY INC

Previous wording

These statements may be contained in our filings with the SEC, in our press releases, in other written communications, and in oral statements made by or with the approval of one of our authorized officers. These statements are forward-looking 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 (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (together with the Securities Act, the “Acts”). This includes, without limitation, statements regarding corporate social responsibility (“CSR”), including in our CSR report, the effects of geopolitical and macroeconomic factors, including evolving government policies and global trade dynamics, on our financial condition and our results of operations, financial guidance and projections, as well as expectations of our future financial condition, results of operations, sales, target growth rates, cash flows, quarterly dividends, share repurchases, capital structure and leverage, corporate strategy, potential price increases, plans, targets, goals, objectives, performance, growth potential, competitive position and business, and statements regarding our ability to: leverage our competitive strengths, including developing and investing in new restaurant concepts and expanding The Cheesecake Factory® brand to other retail opportunities; maintain our aggregate sales volumes; deliver comparable sales growth; provide a differentiated experience to customers; outperform the casual dining industry and increase our market share; leverage sales increases and manage flow through; manage market risks and cost pressures, including increasing wage rates and insurance costs, and increase margins; grow earnings; remain relevant to consumers; attract and retain qualified management and other staff; increase shareholder value; find suitable sites and manage increasing construction costs; profitably expand our concepts domestically and in Canada, and work with our licensees to expand The Cheesecake Factory internationally; support the growth of North Italia, Flower Child and additional brands within our Fox Restaurant Concepts (“Other FRC”) restaurants; and utilize our capital effectively. These forward-looking statements may be affected by various factors including: economic, public health and political conditions that impact consumer confidence and spending, including government shutdowns, trade policy, changes in interest rates, periods of heightened inflation and market instability, and armed conflicts; supply chain disruptions; demonstrations, political unrest, potential damage to or closure of our restaurants and potential reputational damage to us or any of our brands; pandemics and related containment measures, including the potential for quarantines or restriction on in-person dining; acceptance and success of The Cheesecake Factory in international markets; acceptance and succe…

Excerpt shortened here; the source contains the full paragraph.

Current wording

These statements may be contained in our filings with the SEC, in our press releases, in other written communications, and in oral statements made by or with the approval of one of our authorized officers. These statements are forward-looking 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 (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (together with the Securities Act, the “Acts”). This includes, without limitation, statements regarding corporate social responsibility (“CSR”), including in our CSR report, the effects of geopolitical and macroeconomic factors, including evolving government policies and global trade dynamics, on our financial condition and our results of operations, financial guidance and projections, as well as expectations of our future financial condition, results of operations, sales, target growth rates, cash flows, quarterly dividends, share repurchases, capital structure and leverage, corporate strategy, potential price increases, plans, targets, goals, objectives, performance, growth potential, competitive position and business, and statements regarding our ability to: leverage our competitive strengths, including developing and investing in new restaurant concepts and expanding The Cheesecake Factory® brand to other retail opportunities; maintain our aggregate sales volumes; deliver comparable sales growth; provide a differentiated experience to customers; outperform the casual dining industry and increase our market share; leverage sales increases and manage flow through; manage market risks and cost pressures, including increasing wage rates and insurance costs, and increase margins; grow earnings; remain relevant to consumers; attract and retain qualified management and other staff; increase shareholder value; find suitable sites and manage increasing construction costs; profitably expand our concepts domestically and in Canada, and work with our licensees to expand The Cheesecake Factory internationally; support the growth of North Italia, Flower Child and additional brands within our Fox Restaurant Concepts (“Other FRC”) restaurants; and utilize our capital effectively. These forward-looking statements may be affected by various factors including: economic, public health and political conditions that impact consumer confidence and spending, including government shutdowns, trade policy, changes in interest rates, periods of heightened inflation and market instability, and armed conflicts; supply chain disruptions; demonstrations, political unrest, potential damage to or closure of our restaurants and potential reputational damage to us or any of our brands; public health crises, including the potential for quarantines or restrictions affecting in-person dining; acceptance and success of The Cheesecake Factory in international markets; acceptance and success of North It…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

In recent years, our operating results were impacted by geopolitical and macroeconomic events, causing supply chain challenges and significantly increased commodity and wage inflation. Our commodity and wage inflationary environment began returning to more historical levels in fiscal 2024.

Current wording

In recent years, our operating results were impacted by geopolitical and macroeconomic events, which caused supply chain challenges and significantly increased commodity and wage inflation. Commodity and wage inflation began returning to more historical levels in fiscal 2024.

Previous wording

The Cheesecake Factory Incorporated is a leader in experiential dining. We are culinary forward and relentlessly focused on hospitality. We currently own and operate 375 restaurants throughout the United States and Canada under brands including The Cheesecake Factory® (217 locations), North Italia® (51 locations), Flower Child® (44 locations) and additional brands within our FRC portfolio (57 locations). Internationally, 36 The Cheesecake Factory® restaurants operate under licensing agreements. Our bakery division operates two facilities that produce quality cheesecakes and other baked products for our restaurants, international licensees and third-party bakery customers.

Current wording

The Cheesecake Factory Incorporated is a leader in experiential dining. We are culinary forward and relentlessly focused on hospitality. We currently own and operate 384 restaurants throughout the United States and Canada under brands including The Cheesecake Factory® (218 locations), North Italia® (53 locations), Flower Child® (47 locations) and additional brands within our FRC portfolio (60 locations). Internationally, 35 The Cheesecake Factory® restaurants operate under licensing agreements. Our bakery division operates two facilities that produce quality cheesecakes and other baked products for our restaurants, international licensees and third-party bakery customers.

Previous wording

For The Cheesecake Factory concept, our strategy is to increase comparable restaurant sales by growing average check while maintaining customer traffic. We strive to accomplish this by (1) continuing to offer innovative, high quality menu items that offer customers a wide range of options in terms of flavor, price and value, (2) focusing on service and hospitality with the goal of delivering an exceptional dining experience and (3) continuing to provide our customers with convenient options for off-premise dining. We continue to support these efforts through a number of initiatives, including menu innovation, increasing customer throughput in our restaurants, leveraging our gift card program, partnering with a third party to provide delivery services for our restaurants, increasing customer awareness of our online ordering capabilities and improving the pick-up experience, augmenting our marketing programs, including our Cheesecake Rewards® program, enhancing our training programs and leveraging insights from our customer satisfaction measurement platform.

Current wording

For The Cheesecake Factory concept, our strategy is to increase comparable restaurant sales by growing average check while maintaining customer traffic. We strive to accomplish this by (1) continuing to offer innovative, high quality menu items that offer customers a wide range of options in terms of flavor, price and value, (2) focusing on service and hospitality with the goal of delivering an exceptional dining experience and (3) continuing to provide our customers with convenient options for off-premise dining. We continue to support these efforts through a number of initiatives, including menu innovation, increasing customer throughput in our restaurants, leveraging our gift card program, partnering with a third party to provide delivery services for our restaurants, increasing customer awareness of our online ordering capabilities and improving the pick-up experience, augmenting our marketing programs, including our Cheesecake Rewards® program, increasing engagement across social media channels, and expanding the reach of organic content, enhancing our training programs and leveraging insights from our customer satisfaction measurement platform.

Previous wording

Revenues increased 7.7% to $1,029.6 million for the fiscal quarter ended June 30, 2026 compared to $955.8 million for the comparable prior year period, primarily due to an increase in comparable restaurant sales and additional revenue related to new restaurant openings.

Current wording

Revenues increased 13.9% to $1,033.4 million for the fiscal quarter ended September 29, 2026 compared to $907.2 million for the comparable prior year period, primarily due to an increase in comparable restaurant sales and additional revenue related to new restaurant openings.

Previous wording

The Cheesecake Factory Restaurants sales increased 6.8% to $729.5 million for the second quarter of fiscal 2026, compared to $683.3 million for the second quarter of fiscal 2025. Average sales per restaurant operating week increased 6.2% to $259,785 in the second quarter of fiscal 2026 from $244,544 in the second quarter of fiscal 2025. Total operating weeks at The Cheesecake Factory Restaurants increased 0.5% to 2,808 in the second quarter of fiscal 2026 compared to 2,794 in the prior year. The Cheesecake Factory comparable sales increased by 5.8%, or $38.9 million, from the second quarter of fiscal 2025. The increase from the second quarter of fiscal 2025 was primarily driven by an increase in average check of 3.1% (based on an increase of 3.0% in menu pricing and a 0.1% positive change from menu mix) and higher customer traffic of 2.7%. We implemented effective menu price increases of approximately 1.5% in both the first quarter of fiscal 2026 and the third quarter of fiscal 2025, respectively. We are in the process of implementing approximately a 1.5% menu price increase in the third quarter of fiscal 2026. Sales through the off-premise channel comprised approximately 21% of our restaurant sales during both the second quarter of fiscal 2026 and fiscal 2025.

Current wording

The Cheesecake Factory Restaurants sales increased 15.8% to $754.4 million for the third quarter of fiscal 2026, compared to $651.4 million for the third quarter of fiscal 2025. Average sales per restaurant operating week increased 15.4% to $267,698 in the third quarter of fiscal 2026 from $231,971 in the third quarter of fiscal 2025. Total operating weeks at The Cheesecake Factory Restaurants increased 0.4% to 2,818 in the third quarter of fiscal 2026 compared to 2,808 in the prior year. The Cheesecake Factory comparable sales increased by 15.2%, or $97.0 million, from the third quarter of fiscal 2025. The increase from the third quarter of fiscal 2025 was primarily driven by higher customer traffic of 9.5% and an increase in average check of 5.7% (based on an increase of 2.4% in menu pricing and a 3.3% positive change from menu mix). We implemented effective menu price increases of approximately 1.5% in both the first and third quarters of fiscal 2026. Sales through the off-premise channel comprised approximately 21% of our restaurant sales during both the third quarters of fiscal 2026 and fiscal 2025.

Previous wording

North Italia sales increased 8.4% to $98.4 million for the second quarter of fiscal 2026, compared to $90.8 million for the second quarter of fiscal 2025. Average sales per restaurant operating week decreased 1.6% to $151,446 in the second quarter of fiscal 2026 from $153,949 in the second quarter of fiscal 2025. Total operating weeks at North Italia increased 10.2% to 650 in the second quarter of fiscal 2026 compared to 590 in the prior year. North Italia comparable sales decreased approximately 3% from the second quarter of fiscal 2025. The decrease from fiscal 2025 was primarily driven by decreased customer traffic of 5%, partially offset by an increase in average check of 2% (based on an increase of 3% in menu pricing and a 1% negative impact from mix). We implemented effective menu price increases of approximately 1.0% and 1.5% in the second quarter of fiscal 2026 and fourth quarter of fiscal 2025, respectively.

Current wording

North Italia sales increased 11.4% to $93.0 million for the third quarter of fiscal 2026, compared to $83.5 million for the third quarter of fiscal 2025. Average sales per restaurant operating week decreased 0.1% to $139,421 in the third quarter of fiscal 2026 from $139,601 in the third quarter of fiscal 2025. Total operating weeks at North Italia increased 11.5% to 667 in the third quarter of fiscal 2026 compared to 598 in the prior year. North Italia comparable sales decreased approximately 3% from the third quarter of fiscal 2025. The decrease from fiscal 2025 was primarily driven by decreased customer traffic of 5%, partially offset by an increase in average check of 2% (based on an increase of 2% in menu pricing and no impact from menu mix). We implemented effective menu price increases of approximately 1.0% and 1.3% in the second quarter of fiscal 2026 and fourth quarter of fiscal 2025, respectively. We are in the process of implementing approximately a 1.0% price increase in the fourth quarter of fiscal 2026.

Previous wording

Flower Child sales increased 17.5% to $56.6 million for the second quarter of fiscal 2026, compared to $48.2 million for the second quarter of fiscal 2025. Flower Child sales per restaurant operating week increased 10.8% to $101,252 in the second quarter of fiscal 2026 from $91,400 in the second quarter of fiscal 2025. Total operating weeks at Flower Child increased 6.1% to 559 in the second quarter of fiscal 2026 compared to 527 in the prior year. Flower Child comparable sales increased approximately 13% from the second quarter of fiscal 2025. The increase from the second quarter of fiscal 2025 includes an increase of 3% in menu pricing.

Current wording

Flower Child sales increased 17.3% to $56.5 million for the third quarter of fiscal 2026, compared to $48.1 million for the third quarter of fiscal 2025. Flower Child sales per restaurant operating week increased 10.6% to $97,499 in the third quarter of fiscal 2026 from $88,159 in the third quarter of fiscal 2025. Total operating weeks at Flower Child increased 6.0% to 579 in the third quarter of fiscal 2026 compared to 546 in the prior year. Flower Child comparable sales increased approximately 11% from the third quarter of fiscal 2025. The increase from the third quarter of fiscal 2025 includes an increase of 2% in menu pricing.

Previous wording

Other FRC sales increased 15.4% to $104.0 million for the second quarter of fiscal 2026, compared to $90.2 million for the second quarter of fiscal 2025. Other FRC average sales per restaurant operating week increased 3.9% to $142,120 in the second quarter of fiscal 2026 from $136,841 in the second quarter of fiscal 2025. Total operating weeks at Other FRC increased 11.1% to 732 in the second quarter of fiscal 2026 compared to 659 in the prior year.

Current wording

Other FRC sales increased 15.8% to $90.3 million for the third quarter of fiscal 2026, compared to $78.0 million for the third quarter of fiscal 2025. Other FRC average sales per restaurant operating week increased 3.9% to $120,097 in the third quarter of fiscal 2026 from $115,581 in the third quarter of fiscal 2025. Total operating weeks at Other FRC increased 11.4% to 752 in the third quarter of fiscal 2026 compared to 675 in the prior year.

Previous wording

Restaurants become eligible to enter the comparable sales base in their 19 th month of operation. As of June 30, 2026, there were six The Cheesecake Factory Restaurants, nine North Italia restaurants and eight Flower Child locations not yet in their respective comparable sales bases. International licensed locations and restaurants that are no longer in operation, including those which we have relocated, are excluded from comparable sales calculations.

Current wording

Restaurants become eligible to enter the comparable sales base in their 19 th month of operation. As of September 29, 2026, there were five The Cheesecake Factory Restaurants, eight North Italia restaurants and six Flower Child locations not yet in their respective comparable sales bases. International licensed locations and restaurants that are no longer in operation, including those which we have relocated, are excluded from comparable sales calculations.

Previous wording

Food and beverage costs consist of raw materials and ingredients used in the food and beverage products sold in our restaurants and to our third-party bakery customers. As a percentage of revenues cost of sales were 21.8% and 21.6% in the second quarters of fiscal 2026 and 2025, respectively, primarily due to higher meat, produce and seafood costs (0.7%), partially offset by lower dairy pricing (0.4%)

Current wording

Food and beverage costs consist of raw materials and ingredients used in the food and beverage products sold in our restaurants and to our third-party bakery customers. As a percentage of revenues cost of sales were 21.2% and 21.8% in the third quarters of fiscal 2026 and 2025, respectively, primarily due to lower dairy pricing (0.8%) and a lower proportion of sales to external bakery customers (0.3%), partially offset by higher meat and seafood costs (0.5%).

Previous wording

As a percentage of revenues, labor expenses, which include restaurant-level labor costs and bakery production labor, including associated fringe benefits, were 34.1% and 34.9% in the second quarters of fiscal 2026 and 2025, respectively. This decrease was primarily due to sales leverage and associated productivity gains (0.6%).

Current wording

As a percentage of revenues, labor expenses, which include restaurant-level labor costs and bakery production labor, including associated fringe benefits, were 34.8% and 35.6% in the third quarters of fiscal 2026 and 2025, respectively. This decrease was primarily due to sales leverage (0.6%).

Previous wording

Other operating costs and expenses consist of all other restaurant-level operating costs, the major components of which are occupancy expenses (rent, common area expenses, insurance, licenses, taxes and utilities), dining room and to-go supplies, repairs and maintenance, janitorial expenses, credit card processing fees, marketing including delivery commissions, and incentive compensation, as well as bakery production overhead. As a percentage of revenues, other operating costs and expenses were 26.5% and 26.8% in the second quarter of fiscal 2026 and 2025, respectively. This variance was primarily driven by sales leverage (0.3%) and lower insurance costs (0.3%), partially offset by higher marketing costs (0.3%)

Current wording

Other operating costs and expenses consist of all other restaurant-level operating costs, the major components of which are occupancy expenses (rent, common area expenses, insurance, licenses, taxes and utilities), dining room and to-go supplies, repairs and maintenance, janitorial expenses, credit card processing fees, marketing including delivery commissions, and incentive compensation, as well as bakery production overhead. As a percentage of revenues, other operating costs and expenses were 27.7% and 28.2% in the third quarters of fiscal 2026 and 2025, respectively. This variance was primarily driven by sales leverage (0.6%) and lower insurance costs (0.3%), partially offset by higher incentive compensation expenses (0.4%) and electricity costs (0.1%)

Previous wording

G&A expenses consist of the restaurant management recruiting and training program, restaurant field supervision, corporate support and bakery administrative organizations, as well as gift card commissions to third-party distributors. As a percentage of revenues, G&A expenses were 6.4% and 6.1% in the second quarter of fiscal 2026 and 2025, respectively. This variance was primarily driven by higher legal fees (0.1%) and higher stock-based compensation expense (0.1%).

Current wording

G&A expenses consist of the restaurant management recruiting and training program, restaurant field supervision, corporate support and bakery administrative organizations, as well as gift card commissions to third-party distributors. As a percentage of revenues, G&A expenses were 6.4% and 6.5% in the third quarters of fiscal 2026 and 2025, respectively. This variance was primarily driven by lower professional fees largely attributable to timing shift with respect to our general managers’ conference (0.3%), partially offset by higher stock-based compensation expense (0.1%), relocation costs (0.1%) and incentive compensation expense (0.1%).

Previous wording

preopening costs include all costs to relocate and compensate restaurant management staff members during the preopening period, costs to recruit and train hourly restaurant staff members, and wages, travel and lodging costs for our opening training team and other support staff members. Preopening costs also include expenses for maintaining a roster of trained managers for pending opening and the associated temporary housing and other costs necessary to relocate managers in alignment with future restaurant opening and operating needs. Preopening costs can fluctuate significantly from period to period based on the number, mix and timing of restaurant openings and the specific preopening costs incurred for each restaurant.

Current wording

Preopening costs were $11.2 million and $6.6 million in the third quarters of fiscal 2026 and 2025, respectively. We opened two The Cheesecake Factory, one North Italia, one Flower Child and two Other FRC locations in the third quarter of fiscal 2026 compared to two Other FRC locations in the third quarter of fiscal 2025. Restaurant-level preopening costs include all costs to relocate and compensate restaurant management staff members during the preopening period, costs to recruit and train hourly restaurant staff members, and wages, travel and lodging costs for our opening training team and other support staff members. Preopening costs also include expenses for maintaining a roster of trained managers for pending opening and the associated temporary housing and other costs necessary to relocate managers in alignment with future restaurant opening and operating needs. Preopening costs can fluctuate significantly from period to period based on the number, mix and timing of restaurant openings and the specific preopening costs incurred for each restaurant.

Previous wording

Our effective income tax rate was 11.1% and 11.9% for the second quarter of fiscal 2026 and 2025, respectively. The decrease was primarily due to non-deductible costs in fiscal 2025 associated with the repurchase of our 2026 Notes (1.2%), higher non-taxable gains in the current fiscal quarter as compared to the comparable prior period on our investments in variable life insurance contracts used to support our non-qualified deferred compensation plan (0.6%), a greater tax benefit in the current fiscal quarter from foreign intangibles income (0.4%) and a greater tax windfall in the current fiscal quarter related to equity compensation (0.3%). The decrease was also impacted by the effect of applying a lower estimated annual effective tax rate in the second quarter of fiscal 2026 compared to the first quarter of fiscal 2026, whereas the estimated annual effective tax rate increased from the first quarter to the second quarter of fiscal 2025, resulting in an unfavorable impact in the comparable prior year period (0.9%). These factors were partially offset by leverage on higher annual forecasted income before taxes, predominantly related to employment credits (1.8%) and a change to our reserve for uncertain tax positions (0.8%).

Current wording

Our effective income tax rate was 16.5% and 10.1% for the third quarter of fiscal 2026 and 2025, respectively. The increase was primarily due to the effect of applying a higher estimated annual effective tax rate in the third quarter of fiscal 2026 than in the second quarter of fiscal 2026, whereas the estimated annual effective tax rate decreased from the second quarter to the third quarter of fiscal 2025 resulting in a favorable impact in the comparable prior year period (6.3%). The increase was also impacted by deleverage on higher annual forecasted income before taxes, predominantly related to employment credits (3.9%). These factors were partially offset by a greater tax windfall in the current fiscal quarter related to equity compensation (2.1%) and non-deductible costs in fiscal 2025 associated with the repurchase of our 2026 Notes (1.0%).

Previous wording

Revenues increased 6.7% to $2,008.5 million for the first six months ended June 30, 2026 compared to $1,883.0 million for the comparable prior year period, primarily due to additional revenue related to new restaurant openings and an increase in comparable restaurant sales.

Current wording

Revenues increased 9.0% to $3,041.9 million for the first nine months ended September 29, 2026 compared to $2,790.2 million for the comparable prior year period, primarily due to an increase in comparable restaurant sales and additional revenue related to new restaurant openings.

Previous wording

The Cheesecake Factory Restaurants sales increased 4.7% to $1,419.9 million for the first six months of fiscal 2026, compared to $1,356.0 million for the first six months of fiscal 2025. Average sales per restaurant operating week increased 4.1% to $252,480 in the first six months of fiscal 2026 from $242,618 in the first six months of fiscal 2025. Total operating weeks at The Cheesecake Factory Restaurants increased 0.6% to 5,624 in the first six months of fiscal 2026 compared to 5,589 in the prior year. The Cheesecake Factory comparable sales increased by 3.7%, or $49.2 million, from the first six months of fiscal 2025. The increase from the first six months of fiscal 2025 was primarily driven by an increase in average check of 3.1% (based on an increase of 3.2% in menu pricing, partially offset by a 0.1% negative change from menu mix) and higher customer traffic of 0.6%. Sales through the off-premise channel comprised approximately 22% and 21% of our restaurant sales during the first six months of fiscal 2026 and fiscal 2025, respectively.

Current wording

The Cheesecake Factory Restaurants sales increased 8.3% to $2,174.3 million for the first nine months of fiscal 2026, compared to $2,007.4 million for the first nine months of fiscal 2025. Average sales per restaurant operating week increased 7.7% to $257,560 in the first nine months of fiscal 2026 from $239,058 in the first nine months of fiscal 2025. Total operating weeks at The Cheesecake Factory Restaurants increased 0.5% to 8,442 in the first nine months of fiscal 2026 compared to 8,397 in the prior year. The Cheesecake Factory comparable sales increased by 7.5%, or $146.3 million, from the first nine months of fiscal 2025. The increase from the first nine months of fiscal 2025 was primarily driven by an increase in average check of 4.0% (based on an increase of 2.9% in menu pricing and a 1.1% positive change from menu mix) and higher customer traffic of 3.3%. Sales through the off-premise channel comprised approximately 21% of our restaurant sales during both the first nine months of fiscal 2026 and fiscal 2025.

Previous wording

North Italia sales increased 7.9% to $187.9 million for the first six months of fiscal 2026, compared to $174.2 million for the first six months of fiscal 2025. Average sales per restaurant operating week decreased 2.7% to $147,388 in the first six months of fiscal 2026 from $151,513 in the first six months of fiscal 2025. Total operating weeks at North Italia increased 10.9% to 1,275 in the first six months of fiscal 2026 compared to 1,150 in the prior year. North Italia comparable sales decreased approximately 3% from the first six months of fiscal 2025. The decrease from fiscal 2025 was primarily driven by decreased customer traffic of 5%, partially offset by an increase in average check of 2% (based on an increase of 3% in menu pricing, partially offset by a 1% negative impact from mix).

Current wording

North Italia sales increased 9.0% to $280.9 million for the first nine months of fiscal 2026, compared to $257.7 million for the first nine months of fiscal 2025. Average sales per restaurant operating week decreased 1.9% to $144,651 in the first nine months of fiscal 2026 from $147,438 in the first nine months of fiscal 2025. Total operating weeks at North Italia increased 11.1% to 1,942 in the first nine months of fiscal 2026 compared to 1,748 in the prior year. North Italia comparable sales decreased approximately 3% from the first nine months of fiscal 2025. The decrease from fiscal 2025 was primarily driven by decreased customer traffic of 5%, partially offset by an increase in average check of 2% (based on an increase of 3% in menu pricing, partially offset by a 1% negative impact from menu mix).

Previous wording

Flower Child sales increased 19.2% to $109.2 million for the first six months of fiscal 2026, compared to $91.6 million for the first six months of fiscal 2025. Flower Child sales per restaurant operating week increased 8.9% to $97,894 in the first six months of fiscal 2026 from $89,920 in the first six months of fiscal 2025. Total operating weeks at Flower Child increased 9.5% to 1,116 in the first six months of fiscal 2026 compared to 1,019 in the prior year. Flower Child comparable sales increased approximately 11% from fiscal 2025. The increase from fiscal 2025 includes an increase of 3% in menu pricing.

Current wording

Flower Child sales increased 18.6% to $165.7 million for the first nine months of fiscal 2026, compared to $139.8 million for the first nine months of fiscal 2025. Flower Child sales per restaurant operating week increased 9.5% to $97,759 in the first nine months of fiscal 2026 from $89,305 in the first nine months of fiscal 2025. Total operating weeks at Flower Child increased 8.3% to 1,695 in the first nine months of fiscal 2026 compared to 1,565 in the prior year. Flower Child comparable sales increased approximately 11% from fiscal 2025. The increase from fiscal 2025 includes an increase of 2% in menu pricing.

Previous wording

Other FRC sales increased 17.4% to $208.6 million for the first six months of fiscal 2026, compared to $177.6 million for the first six months of fiscal 2025. Other FRC average sales per restaurant operating week increased 3.9% to $143,632 in the first six months of fiscal 2026 from $138,212 in the first six months of fiscal 2025. Total operating weeks at Other FRC increased 13.0% to 1,452 in the first six months of fiscal 2026 compared to 1,285 in the prior year.

Current wording

Other FRC sales increased 16.9% to $298.9 million for the first nine months of fiscal 2026, compared to $255.6 million for the first nine months of fiscal 2025. Other FRC average sales per restaurant operating week increased 4.0% to $135,602 in the first nine months of fiscal 2026 from $130,418 in the first nine months of fiscal 2025. Total operating weeks at Other FRC increased 12.4% to 2,204 in the first nine months of fiscal 2026 compared to 1,960 in the prior year.

Previous wording

As a percentage of revenues cost of sales were 21.7% in the first six months of both fiscal 2026 and 2025, primarily due to higher meat, produce and seafood costs (0.7%), partially offset by lower dairy pricing (0.6%)

Current wording

As a percentage of revenues cost of sales were 21.5% and 21.7% in the first nine months of fiscal 2026 and 2025, respectively primarily due to lower dairy pricing (0.6%), partially offset by higher meat and seafood costs (0.5%).

Previous wording

As a percentage of revenues, labor expenses were 34.8% and 35.3% in the first six months of fiscal 2026 and 2025, respectively. This decrease was primarily due to sales leverage and associated productivity gains (0.5%).

Current wording

As a percentage of revenues, labor expenses were 34.8% and 35.4% in the first nine months of fiscal 2026 and 2025, respectively. This decrease was primarily due to sales leverage and associated productivity gains (0.5%).

Previous wording

Impairment of Assets and Lease Termination Expenses

Current wording

Impairment of Assets and Lease Termination Expenses/(Income)

Previous wording

During the first six months of fiscal 2026, we recorded impairment of assets and lease termination expenses of $1.0 million primarily related to lease termination costs for two The Cheesecake Factory, two Grand Lux Cafe and one Other FRC location. During the first six months of fiscal 2025, we recorded impairment of assets and lease termination expenses of $0.6 million primarily related to lease termination costs for one The Cheesecake Factory and one Other FRC location.

Current wording

During the first nine months of fiscal 2026, we recorded impairment of assets and lease termination expenses of $1.0 million primarily related to lease termination costs for two The Cheesecake Factory, two Grand Lux Cafe and one Other FRC location. During the first nine months of fiscal 2025, we recorded impairment of assets and lease termination expenses of $0.5 million primarily related to lease termination costs for one The Cheesecake Factory and one Other FRC location.

Previous wording

Preopening costs were $12.4 million and $17.1 million in the first six months of fiscal 2026 and 2025, respectively. We opened three North Italia, two Flower Child and two Other FRC locations in the first six months of fiscal 2026 compared to two The Cheesecake Factory, four North Italia, six Flower Child and four Other FRC locations in the first half of fiscal 2025.

Current wording

Preopening costs were $23.6 million and $23.7 million in the first nine months of fiscal 2026 and 2025, respectively. We opened two The Cheesecake Factory, four North Italia, three Flower Child and four Other FRC locations in the first nine months of fiscal 2026 compared to two The Cheesecake Factory, four North Italia, six Flower Child and six Other FRC locations in the first nine months of fiscal 2025.

Previous wording

Our effective income tax rate was 9.5% and 9.3% for the first six months of fiscal 2026 and 2025, respectively. The increase was primarily due to leverage on higher annual forecasted income before taxes, primarily due to employment credits (2.4%), a change to our reserve for uncertain tax positions (0.6%) and an increase in non-deductible executive compensation (0.5%). These factors were partially offset by non-deductible costs in fiscal 2025 associated with the repurchase of our 2026 Notes (1.2%), a greater tax windfall in the first six months of fiscal 2026 as compared to the comparable prior period related to equity compensation (1.2%) and higher non-taxable gains in the first six months of 2026 as compared to the comparable prior period on our investments in variable life insurance contracts used to support our non-qualified deferred compensation plan (0.6%).

Current wording

Our effective income tax rate was 12.0% and 9.5% for the first nine months of fiscal 2026 and 2025, respectively. The increase was primarily due to deleverage on higher annual forecasted income before taxes, primarily due to employment credits (5.0%), partially offset by a greater tax windfall in the first nine months of fiscal 2026 as compared to the comparable prior period related to equity compensation (1.5%) and non-deductible costs in fiscal 2025 associated with the repurchase of our 2026 Notes (1.0%).

Previous wording

Adjusted net income, adjusted diluted net income per share and adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) are supplemental measures of our performance that are not required by or presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly-titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. We calculate these non-GAAP measures by eliminating from net income, diluted net income per common share and EBITDA, the impact of items we do not consider indicative of our ongoing operations. Additionally, EBITDA and adjusted EBITDA exclude the impact of certain non-cash transactions. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. In the future, we may incur expenses or generate income similar to the adjusted items.

Current wording

Adjusted net income, adjusted diluted net income per share and adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) are supplemental measures of our performance that are not required by or presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly-titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. We calculate these non-GAAP measures by eliminating from net income and diluted net income per common share, the impact of items we do not consider indicative of our ongoing operations. Additionally, EBITDA and adjusted EBITDA exclude the impact of certain non-cash transactions. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. In the future, we may incur expenses or generate income similar to the adjusted items.

Previous wording

During the first six months of fiscal 2026, our cash and cash equivalents decreased by $20.5 million to $195.2 million. The following table presents, for the periods indicated, a summary of our key cash flows from operating, investing and financing activities (in millions):

Current wording

During the first nine months of fiscal 2026, our cash and cash equivalents increased by $33.5 million to $249.3 million. The following table presents, for the periods indicated, a summary of our key cash flows from operating, investing and financing activities (in millions):

Previous wording

Cash flows from operations increased by $53.1 million from the first six months of fiscal 2025 primarily due to net income after excluding the non-cash activity, lower accounts and other receivable balances, timing of operating lease commencements, higher payables and inventory movement, partially offset by increased payment of deferred consideration and compensation related to the FRC acquisition in excess of acquisition-date fair value and higher income taxes paid. Typically, our requirement for working capital has not been significant since our restaurant customers pay for their food and beverage purchases in cash or cash equivalents at the time of sale, and we are able to sell many of our restaurant inventory items before payment is due to the suppliers of such items.

Current wording

Cash flows from operations increased by $87.3 million from the first nine months of fiscal 2025 primarily due to net income after excluding the non-cash activity, higher payables and prepaid expenses movement, lower accounts and other receivable balances, partially offset by timing of operating lease commencements and increased payment of deferred consideration and compensation related to the FRC acquisition in excess of acquisition-date fair value. Typically, our requirement for working capital has not been significant since our restaurant customers pay for their food and beverage purchases in cash or cash equivalents at the time of sale, and we are able to sell many of our restaurant inventory items before payment is due to the suppliers of such items.

Previous wording

Capital expenditures for new restaurants, including locations under development, were $46.7 million and $44.0 million for the first six months of fiscal 2026 and 2025, respectively. Capital expenditures also included $35.1 million and $33.6 million for our existing restaurants and $4.5 million and $6.8 million for bakery and corporate capacity and infrastructure investments, in the first six months of fiscal 2026 and 2025, respectively.

Current wording

Capital expenditures for new restaurants, including locations under development, were $84.0 million and $62.7 million for the first nine months of fiscal 2026 and 2025, respectively. Capital expenditures also included $53.8 million and $48.6 million for our existing restaurants and $6.4 million and $9.8 million for bakery and corporate capacity and infrastructure investments, in the first nine months of fiscal 2026 and 2025, respectively.

Previous wording

We opened seven restaurants in the first six months of fiscal 2026 comprised of three North Italia, two Flower Child and two Other FRC locations compared to 16 restaurants in the first six months of fiscal 2025 comprised of two The Cheesecake Factory, four North Italia, six Flower Child and four Other FRC locations. We expect to open as many as 26 new restaurants in fiscal 2026 across our portfolio of concepts. We anticipate approximately $210 million in capital expenditures to support this level of unit development, as well as required maintenance on our restaurants. This estimate includes new restaurant construction expenses, some of which may be classified as operating lease assets instead of additions to property and equipment in the statement of cash flows.

Current wording

We opened 13 restaurants in the first nine months of fiscal 2026 comprised of two The Cheesecake Factory, four North Italia, three Flower Child and four Other FRC locations compared to 18 restaurants in the first nine months of fiscal 2025 comprised of two The Cheesecake Factory, four North Italia, six Flower Child and six Other FRC locations. We expect to open as many as 26 new restaurants in fiscal 2026 across our portfolio of concepts. We anticipate approximately $210 million in capital expenditures to support this level of unit development, as well as required maintenance on our restaurants. This estimate includes new restaurant construction expenses, some of which may be classified as operating lease assets instead of additions to property and equipment in the statement of cash flows.

Previous wording

On March 26, 2026, we entered into a Fifth Amended and Restated Loan Agreement (the “Loan Agreement” and the revolving credit facility provided thereunder, the “Revolver Facility”). The Revolver Facility, which matures on March 26, 2031, provides us with revolving loan commitments that total $400 million, of which $85 million may be used for issuances of letters of credit and $10 million for swingline loans. The Revolver Facility contains (i) a commitment increase feature that, subject to certain conditions precedent, could provide for an additional $200 million in revolving loan commitments and (ii) a feature that permits the letter of credit issuers thereunder to increase their letter of credit sublimits by $25 million in the aggregate. Our obligations under the Revolver Facility are unsecured. Certain of our material subsidiaries have guaranteed our obligations under the Revolver Facility. As of June 30, 2026, we had net availability for borrowings of $366.5 million, based on no outstanding debt balance and $33.5 million in standby letters of credit under the Revolver Facility.

Current wording

On March 26, 2026, we entered into a Fifth Amended and Restated Loan Agreement (the “Loan Agreement” and the revolving credit facility provided thereunder, the “Revolver Facility”). The Revolver Facility, which matures on March 26, 2031, provides us with revolving loan commitments that total $400 million, of which $85 million may be used for issuances of letters of credit and $10 million for swingline loans. The Revolver Facility contains (i) a commitment increase feature that, subject to certain conditions precedent, could provide for an additional $200 million in revolving loan commitments and (ii) a feature that permits the letter of credit issuers thereunder to increase their letter of credit sublimits by $25 million in the aggregate. Our obligations under the Revolver Facility are unsecured. Certain of our material subsidiaries have guaranteed our obligations under the Revolver Facility. As of September 29, 2026, we had net availability for borrowings of $336.0 million, based on no outstanding debt balance and $64.0 million in standby letters of credit under the Revolver Facility.

Previous wording

On February 28, 2025, we issued $575.0 million in aggregate principal amount of convertible senior notes (“2030 Notes”), which will mature on March 15, 2030, unless earlier repurchased, redeemed or converted. The net proceeds from the sale of the 2030 Notes were approximately $558.5 million after deducting issuance costs of $16.5 million. As of June 30, 2026, the 2030 Notes had a balance of $562.9 million, net of unamortized issuance costs of $12.1 million. As of June 30, 2026, the conversion rate for the 2030 Notes was 14.1514 shares of common stock per $1,000 principal amount of the 2030 Notes, which represents a conversion price of approximately $70.66 per share of common stock. In connection with the cash dividend that was declared by our Board on July 23, 2026, we will, on August 11, 2026, adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of the 2030 Notes in accordance with the terms. (See Note 5 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion on our debt.)

Current wording

As of September 29, 2026, the conversion rate for the 2030 Notes was 14.1552 shares of common stock per $1,000 principal amount of the 2030 Notes, which represents a conversion price of approximately $70.65 per share of common stock. In connection with the cash dividend that was declared by our Board on October 21, 2026, we will, on November 10, 2026, adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of the 2030 Notes in accordance with the terms of the indenture governing the 2030 Notes. (See Note 5 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion on our debt.)

Previous wording

On June 15, 2021, we issued $345.0 million in aggregate principal amount of convertible senior notes (“2026 Notes”). The net proceeds from the sale of the 2026 Notes were approximately $334.9 million after deducting issuance costs of $10.1 million. On February 28, 2025, we used part of the net proceeds from the issuance of the 2030 Notes to repurchase approximately $276.0 million aggregate principal amount of the 2026 Notes in a privately-negotiated transaction for aggregate consideration of $289.8 million, which included a premium of $13.8 million. During the second quarter of fiscal 2026, noteholders converted $0.1 million aggregate principal amount of the 2026 Notes which we settled in cash, including payment of accrued interest. The 2026 Notes matured on June 15, 2026 and we repaid in cash the remaining outstanding principal balance of $69.0 million, together with all accrued interest. (See Note 5 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion on our debt.)

Current wording

On June 15, 2021, we issued $345.0 million in aggregate principal amount of convertible senior notes due 2026 (“2026 Notes”). The net proceeds from the sale of the 2026 Notes were approximately $334.9 million after deducting issuance costs of $10.1 million. On February 28, 2025, we used part of the net proceeds from the issuance of the 2030 Notes to repurchase approximately $276.0 million aggregate principal amount of the 2026 Notes in a privately negotiated transaction for aggregate consideration of $289.8 million, which included a premium of $13.8 million. During the second quarter of fiscal 2026, noteholders converted $0.1 million aggregate principal amount of the 2026 Notes, which we settled in cash, including payment of accrued interest. The 2026 Notes matured on June 15, 2026, and we repaid in cash the remaining outstanding principal balance of $69.0 million, together with all accrued interest. (See Note 5 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion on our debt.)

Previous wording

Common stock dividends of $29.9 million and $26.8 million were paid in the six months of fiscal 2026 and 2025, respectively. As further discussed in Note 12 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report, in July 2026, our Board declared a quarterly dividend to be paid in August 2026. Future decisions to pay or to increase or decrease dividends are at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements, limitations on cash distributions pursuant to the terms and conditions of the Loan Agreement and applicable law, and other such factors that the Board considers relevant.

Current wording

Common stock dividends of $44.1 million and $39.4 million were paid in the nine months of fiscal 2026 and 2025, respectively. As further discussed in Note 12 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report, in October 2026, our Board declared a quarterly dividend to be paid in November 2026. Future decisions to pay or to increase or decrease dividends are at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements, limitations on cash distributions pursuant to the terms and conditions of the Loan Agreement and applicable law, and other such factors that the Board considers relevant.

Previous wording

excluding excise tax, through June 30, 2026. We repurchased 0.5 million shares at a cost of $28.5 million, excluding excise tax, during the first six months of fiscal 2026. We repurchased 2.6 million shares at a cost of $141.5 million, excluding excise tax, during the first six months of fiscal 2025.

Current wording

On February 12, 2026, our Board increased the authorization to repurchase our common stock by 5.0 million shares to 66.0 million shares. Under this authorization, we have cumulatively repurchased 60.4 million shares at a total cost of $2,014.5 million, excluding excise tax, through September 29, 2026. We repurchased 0.5 million shares at a cost of $30.9 million, excluding excise tax, during the first nine months of fiscal 2026. We repurchased 2.6 million shares at a cost of $142.7 million, excluding excise tax, during the first nine months of fiscal 2025.

Previous wording

Our objectives with regard to share repurchases have been to offset the dilution to our shares outstanding that results from equity compensation grants and to supplement our earnings per share growth. Our share repurchase program does not have an expiration date, does not require us to purchase a specific number of shares and may be modified, suspended or terminated at any time. Future decisions to repurchase shares are at the discretion of the Board and are based on several factors, including current and forecasted operating cash flows, capital needs associated with new restaurant development and maintenance of existing locations, dividend payments, debt levels and cost of borrowing, obligations associated with the FRC acquisition, our share price and current market conditions. The timing and number of shares repurchased are also subject to legal constraints and financial covenants under our Loan Agreement that limit share repurchases based on a defined ratio. (See Note 8 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion of our repurchase authorization.)

Current wording

Our objectives with regard to share repurchases have been to offset the dilution to our shares outstanding that results from equity compensation grants over the long-term, and to opportunistically supplement our earnings per share growth. Our share repurchase program does not have an expiration date, does not require us to purchase a specific number of shares and may be modified, suspended or terminated at any time. Future decisions to repurchase shares are at the discretion of the Board and are based on several factors, including current and forecasted operating cash flows, capital needs associated with new restaurant development and maintenance of existing locations, dividend payments, debt levels and cost of borrowing, obligations associated with the FRC acquisition, our share price and current market conditions. The timing and number of shares repurchased are also subject to legal constraints and financial covenants under our Loan Agreement that limit share repurchases based on a defined ratio. (See Note 8 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion of our repurchase authorization.)