What changed in this filing

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Item 1. Financial Statements

2025-08-04 compared with 2025-05-05 · 99 added, 73 removed, 404 unchanged (30% of the section changed)

20 unchanged sentences

Other accrued expenses

Current portion of long-term debt

Total current liabilities

7 unchanged sentences

Common stock, $ .01 par value, 250,000,000 shares authorized;

109,191,933 shares issued and 49,530,542 shares outstanding at April 1, 2025 and 108,387,574 shares issued and 51,332,298 shares outstanding at December 31, 2024

109,448,529 shares issued and 49,784,613 shares outstanding at July 1, 2025 and 108,387,574 shares issued and 51,332,298 shares outstanding at December 31, 2024

Additional paid-in capital

Retained earnings

Treasury stock inclusive of excise tax, 59,661,391 and 57,055,276 shares at cost at April 1, 2025 and December 31, 2024, respectively

Treasury stock inclusive of excise tax, 59,663,916 and 57,055,276 shares at cost at July 1, 2025 and December 31, 2024, respectively

( 1,972,286 )

7 unchanged sentences

(In thousands, except per share data)

April 1, 2025

April 2, 2024

Costs and expenses:

4 unchanged sentences

Depreciation and amortization expenses

Impairment of assets and lease termination expenses

Impairment of assets and lease termination expenses/(income)

Acquisition-related contingent consideration, compensation and amortization expenses

14 unchanged sentences

(In thousands)

April 1, 2025

April 2, 2024

Other comprehensive gain/(loss):

6 unchanged sentences

(In thousands, except per share data)

For the thirteen weeks ended April 1, 2025:

For the twenty-six weeks ended July 1, 2025:

Comprehensive

9 unchanged sentences

( 1,972,311 )

For the thirteen weeks ended April 2, 2024:

Foreign currency translation adjustment

Cash dividends declared common stock, net of forfeitures, $ 0.27 per share

Stock-based compensation

Common stock issued under stock-based compensation plans

Treasury stock purchases, inclusive of excise tax

Balance, July 1, 2025

( 1,972,286 )

For the twenty-six weeks ended July 2, 2024:

Comprehensive

8 unchanged sentences

( 1,824,493 )

Foreign currency translation adjustment

Cash dividends declared common stock, net of forfeitures, $ 0.27 per share

Stock-based compensation

Treasury stock purchases, inclusive of excise tax

Balance, July 2, 2024

( 1,828,382 )

See the accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

April 1, 2025

April 2, 2024

Cash flows from operating activities:

5 unchanged sentences

Stock-based compensation

Payment of deferred consideration and compensation in excess of acquisition-date fair value

Changes in assets and liabilities:

42 unchanged sentences

Fiscal year 2024 ended on December 31, 2024 and was also a 52 -week year.

In the first quarter of fiscal year 2025, we separately disclosed interest expense, net and other income, net on the condensed consolidated statement of income.

Beginning with our Form 10-Q for the first quarter of fiscal year 2025, we separately disclosed interest expense, net and other income, net on the condensed consolidated statement of income.

Corresponding prior year balances were reclassified to conform to the current year presentation.

32 unchanged sentences

The following tables present the components and classification of our assets and liabilities that are measured at fair value on a recurring basis (in thousands):

April 1, 2025

Assets/(Liabilities)

8 unchanged sentences

The following table presents a reconciliation of the beginning and ending amounts of the fair value of the acquisition-related contingent consideration and compensation liabilities categorized as Level 3 (in thousands):

April 1, 2025

April 2, 2024

Beginning balance

2 unchanged sentences

The fair value of the acquisition-related contingent consideration and compensation liabilities was determined utilizing a Monte Carlo model based on estimated future revenues, margins and volatility factors, among other variables and estimates and has no minimum or maximum payment.

The undiscounted range of outcomes per the Monte Carlo model utilized to determine the fair value of the acquisition-related contingent consideration and compensation liabilities on April 1, 2025 was $ 0.0 million to $ 142.4 million.

Results could change materially if different estimates and assumptions were used.

During the first three months of fiscal 2025 and 2024, we did not make any payments, pursuant to the Fox Restaurant Concept LLC (“FRC”) acquisition agreement.

During the first six months of fiscal 2025 and 2024, we made payments of $ 8.7 million and $ 6.5 million, respectively, per the Fox Restaurant Concept LLC (“FRC”) acquisition agreement.

The fair values of our cash and cash equivalents, accounts and other receivables, income taxes receivable, prepaid expenses, accounts payable, income taxes payable and other accrued liabilities approximate their carrying amounts due to their short duration.

The fair value of our Revolver Facility (as defined below) approximates carrying value due to the variable interest rate.

As of April 1, 2025, we had $ 69.0 million aggregate principal amount of convertible senior notes due 2026 (“2026 Notes”) outstanding.

The estimated fair value of the 2026 Notes based on a market approach as of April 1, 2025 was approximately $ 67.6 million and was determined based on the estimated or actual bids and offers of the 2026 Notes in an over-the-counter market on the last business day of the reporting period.

The decrease in the fair value of the 2026 Notes was primarily due to a decline in our stock price from the date of the issuance of the 2026 Notes.

As of April 1, 2025, we had $ 575.0 million aggregate principal amount of convertible senior notes due 2030 (“2030 Notes”) outstanding.

The estimated fair value of the 2030 Notes based on a market approach as of April 1, 2025 was approximately $ 550.9 million and was determined based on the estimated or actual bids and offers of the 2030 Notes in an over-the-counter market on the last business day of the reporting period.

The decrease in the fair value of the 2030 Notes was primarily due to a decline in our stock price from the date of the issuance of the 2030 Notes.

As of July 1, 2025, we had $ 69.0 million aggregate principal amount of convertible senior notes due 2026 (“2026 Notes”) outstanding.

The estimated fair value of the 2026 Notes based on a market approach as of July 1, 2025 was approximately $ 69.7 million and was determined based on the estimated or actual bids and offers of the 2026 Notes in an over-the-counter market on the last business day of the reporting period.

The increase in the fair value of the 2026 Notes was primarily due to an increase in our stock price from the date of the issuance of the 2026 Notes.

As of July 1, 2025, we had $ 575.0 million aggregate principal amount of convertible senior notes due 2030 (“2030 Notes”) outstanding.

The estimated fair value of the 2030 Notes based on a market approach as of July 1, 2025 was approximately $ 629.6 million and was determined based on the estimated or actual bids and offers of the 2030 Notes in an over-the-counter market on the last business day of the reporting period.

The increase in the fair value of the 2030 Notes was primarily due to an increase in our stock price from the date of the issuance of the 2030 Notes.

See Note 5 for further discussion of the 2026 Notes and 2030 Notes.

Inventories consisted of (in thousands):

April 1, 2025

December 31, 2024

3 unchanged sentences

The following tables present information related to gift cards (in thousands):

April 1, 2025

April 2, 2024

Gift card liabilities:

2 unchanged sentences

Ending balance

April 1, 2025

April 2, 2024

Gift card contract assets:

1 unchanged sentence

Ending balance

Long-Term Debt

Revolving Credit Facility

6 unchanged sentences

In the first quarter of fiscal 2025 we repaid $ 110.0 million on the Revolver Facility.

As of April 1, 2025, 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.

As of July 1, 2025, 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.

Under the Revolver Facility, we are subject to the following financial covenants as of the last day of each fiscal quarter:

1 unchanged sentence

The Net Adjusted Leverage Ratio includes a rental expense multiplier of six .

As of April 1, 2025, we were in compliance with all the foregoing covenants in effect at that date.

As of July 1, 2025, we were in compliance with all the foregoing covenants in effect at that date.

Borrowings under the Loan Agreement bear interest, at the Company’s election, at a rate equal to either:

24 unchanged sentences

In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2030 Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

As of April 1, 2025, the conversion rate for the 2030 Notes was 14.1377 shares of common stock per $ 1,000 principal amount of the 2030 Notes, which represents a conversion price of approximately $ 70.73 per share of common stock.

As of July 1, 2025, the conversion rate for the 2030 Notes was 14.1377 shares of common stock per $ 1,000 principal amount of the 2030 Notes, which represents a conversion price of approximately $ 70.73 per share of common stock.

The 2030 Notes are redeemable, in whole or in part (subject to certain limitations described below), at our option at any time, and from time to time, on or after March 20, 2028 and on or before the 35th scheduled trading day immediately before the maturity date, but only if (i) the notes are “Freely Tradable” (as defined in the 2030 Indenture), and all accrued and unpaid additional interest, if any, has been paid in full, as of the date we send the related redemption notice;

17 unchanged sentences

However, notwithstanding the foregoing, we may elect, at our option, that the sole remedy for an Event of Default relating to certain failures by us to comply with certain reporting covenants in the 2030 Indenture consists exclusively of the right of the noteholders to receive special interest on the 2030 Notes for up to 180 days at a specified rate per annum not exceeding 0.50 % on the principal amount of the 2030 Notes.

As of April 1, 2025, the 2030 Notes had a gross principal balance of $ 575.0 million and a balance of $ 558.8 million, net of unamortized issuance costs of $ 16.2 million.

Total amortization expense was $ 0.3 million during the thirteen weeks ended April 1, 2025.

The effective interest rate for the 2030 Notes was 2.57 % as of April 1, 2025.

As of July 1, 2025, the 2030 Notes had a gross principal balance of $ 575.0 million and a balance of $ 559.6 million, net of unamortized issuance costs of $ 15.4 million.

The net carrying value of the 2030 Notes is included in long-term debt within total liabilities on the condensed consolidated balance sheet.

Total amortization expense was $ 0.8 million and $ 1.1 million during the thirteen and twenty-six weeks ended July 1, 2025.

The effective interest rate for the 2030 Notes was 2.57 % as of July 1, 2025.

2026 Convertible Senior Notes

18 unchanged sentences

In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2026 Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

As of April 1, 2025, the conversion rate for the 2026 Notes was 13.9491 shares of common stock per $ 1,000 principal amount of the 2026 Notes, which represents a conversion price of approximately $ 71.69 per share of common stock.

In connection with the cash dividend that was declared by our Board of Directors ("Board") on April 24, 2025, on May 14, 2025 we will adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of the 2026 Notes in accordance with the terms.

As of July 1, 2025, the conversion rate for the 2026 Notes was 14.0195 shares of common stock per $ 1,000 principal amount of the 2026 Notes, which represents a conversion price of approximately $ 71.33 per share of common stock.

In connection with the cash dividend that was declared by our Board of Directors (“Board”) on July 23, 2025, on August 11, 2025 we will adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of the 2026 Notes in accordance with the terms.

The 2026 Notes are redeemable, in whole or in part (subject to certain limitations described below), at our option at any time, and from time to time, on or after June 20, 2024 and on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice;

15 unchanged sentences

However, notwithstanding the foregoing, we may elect, at our option, that the sole remedy for an Event of Default relating to certain failures by us to comply with certain reporting covenants in the 2026 Note Indenture consists exclusively of the right of the noteholders to receive special interest on the Notes for up to 180 days at a specified rate per annum not exceeding 0.50 % on the principal amount of the Notes.

As of April 1, 2025, the 2026 Notes had a gross principal balance of $ 69.0 million and a balance of $ 68.5 million, net of unamortized issuance costs of $ 0.5 million.

Total amortization expense was $ 0.4 million and $ 0.5 million during the first quarter of fiscal 2025 and fiscal 2024, respectively.

The effective interest rate for the 2026 Notes was 0.96 % as of April 1, 2025.

As of July 1, 2025, the 2026 Notes had a gross principal balance of $ 69.0 million and a balance of $ 68.6 million, net of unamortized issuance costs of $ 0.4 million.

The net carrying value of the 2026 Notes is included in current portion of long-term debt within total current liabilities on the condensed consolidated balance sheet.

Total amortization expense was $ 0.1 million and $ 0.5 million during the thirteen and twenty-six weeks ended July 1, 2025, respectively.

Total amortization expense was $ 0.5 million and $ 1.0 million during the thirteen and twenty-six weeks ended July 2, 2024, respectively.

The effective interest rate for the 2026 Notes was 0.96 % as of July 1, 2025.

Components of lease expense were as follows (in thousands):

April 1, 2025

April 2, 2024

Supplemental information related to leases (in thousands):

April 1, 2025

April 2, 2024

Cash paid for amounts included in the measurement of lease liabilities:

16 unchanged sentences

Common Stock – Dividends and Share Repurchases

On February 13, 2025 , our Board declared a quarterly cash dividend of $ 0.27 per share, which was paid on March 18,2025 , to the stockholders of record of each share of our common stock at the close of business on March 5, 2025 .

On April 24, 2025 , our Board declared a quarterly cash dividend of $ 0.27 per share which was paid on May 27, 2025 to the stockholders of record of each share of our common stock at the close of business on May 14, 2025 .

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 such other factors that the Board considers relevant.

(See Notes 5 and 12 for further discussion of our long-term debt and dividends declared subsequent to April 1, 2025, respectively.)

Under authorization by our Board to repurchase up to 61.0 million shares of our common stock, we have cumulatively repurchased 59.7 million shares at a total cost of $ 1,971.0 million, excluding excise tax, through April 1, 2025, with 2.6 million shares repurchased at a cost of $ 141.4 million, excluding excise tax, during the thirteen weeks ended April 1, 2025, inclusive of the 2.4 million shares of our common stock repurchased concurrently with the 2030 Notes issuance in privately negotiated transactions.

(See Notes 5 and 12 for further discussion of our debt and dividends declared subsequent to July 1, 2025, respectively.)

Under authorization by our Board to repurchase up to 61.0 million shares of our common stock, we have cumulatively repurchased 59.7 million shares at a total cost of $ 1,971.2 million, excluding excise tax, through July 1, 2025, with 2,525 shares and

2.6 million shares repurchased at a cost of $ 0.1 million and $ 141.5 million, excluding excise tax, during the thirteen and twenty-six weeks ended July 1, 2025, respectively, inclusive of the 2.4 million shares of our common stock repurchased concurrently with the 2030 Notes issuance in privately negotiated transactions on February 28, 2025.

Our objectives with regard to share repurchases have been to offset the dilution to our shares outstanding that result from equity compensation grants and to supplement our earnings per share growth.

3 unchanged sentences

The timing and number of shares repurchased are also subject to legal constraints and covenants under the Loan Agreement that limit share repurchases based on a defined ratio.

(See Note 5 for further discussion of our long-term debt.)

(See Note 5 for further discussion of our debt.)

Stock-Based Compensation

We maintain stock-based incentive plans under which incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares and restricted share units may be granted to staff members, consultants and non-employee directors.

On March 26, 2025, our Board approved an amendment to our The Cheesecake Factory Incorporated Stock Incentive Plan (the “Plan”) to increase the number of shares of common stock authorized for issuance under the Plan by 6.0 million shares to 13.15 million shares from 7.15 million shares (the “Plan Amendment”).

This Plan Amendment was approved by our stockholders at our 2025 annual meeting held on May 22, 2025.

The following table presents information related to stock-based compensation, net of forfeitures (in thousands):

April 1, 2025

April 2, 2024

Labor expenses

8 unchanged sentences

Stock Options

We did not issue any stock options during the first quarter of fiscal 2025.

The weighted-average fair value at the grant date for options issued during the first quarter of fiscal 2024 was $ 12.45 .

The fair value of options issued was estimated utilizing the Black-Scholes valuation model with the following weighted-average assumptions for the first quarter of fiscal 2024:

(a) an expected option term of 6.9 years, (b) expected stock price volatility of 41.9 %, (c) a risk-free interest rate of 4.3 %, and (d) a dividend yield on our stock of 3.1 %.

Stock option activity during the thirteen weeks ended April 1, 2025 was as follows:

We did not issue any stock options during the second quarters of fiscal 2025 and fiscal 2024.

Stock option activity during the twenty-six weeks ended July 1, 2025 was as follows:

Exercise Price

4 unchanged sentences

Forfeited or cancelled

Outstanding at April 1, 2025

Exercisable at April 1, 2025

Outstanding at July 1, 2025

Exercisable at July 1, 2025

(1) Aggregate intrinsic value is calculated as the difference between our closing stock price at fiscal period end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised their options on the fiscal period-end date.

The total intrinsic value of options exercised during the first quarter of fiscal 2025 was $ 0.1 million.

There were no options exercised in the first quarter of fiscal 2024.

As April 1, 2025, total unrecognized stock-based compensation expense related to unvested stock options was $ 1.1 million, which we expect to recognize over a weighted-average period of approximately 3.6 years.

The total intrinsic value of options exercised during the thirteen and twenty-six weeks ended July 1, 2025 was $ 2.8 million and $ 4.3 million, respectively.

There were no options exercised during the thirteen and twenty-six weeks ended July 2, 2024.

As July 1, 2025, total unrecognized stock-based compensation expense related to unvested stock options was $ 1.1 million, which we expect to recognize over a weighted-average period of approximately 3.4 years.

Restricted Shares and Restricted Share Units

Restricted share and restricted share unit activity during the thirteen weeks ended April 1, 2025 was as follows:

Restricted share and restricted share unit activity during the twenty-six weeks ended July 1, 2025 was as follows:

(In thousands)

Outstanding at December 31, 2024

Outstanding at April 1, 2025

Outstanding at July 1, 2025

Fair value of our restricted shares and restricted share units is based on our closing stock price on the date of grant.

The weighted average fair value for restricted shares and restricted share units issued during the first quarter of fiscal 2025 and 2024 was $ 51.89 and $ 34.77 , respectively.

The fair value of shares that vested during the thirteen weeks ended April 1, 2025 and April 2, 2024 was $ 22.4 million and $ 17.8 million, respectively.

As of April 1, 2025, total unrecognized stock-based compensation expense related to unvested restricted shares and restricted share units was $ 78.9 million, which we expect to recognize over a weighted-average period of approximately 3.3 years.

The weighted average fair value for restricted shares and restricted share units issued during the second quarter of fiscal 2025 and 2024 was $ 52.35 and $ 37.25 , respectively.

The fair value of shares that vested during the thirteen and twenty-six weeks ended July 1, 2025 was $ 2.0 million and $ 24.4 million, respectively.

The fair value of shares that vested during the thirteen and twenty-six weeks ended July 2, 2024 was $ 4.7 million and $ 22.5 million, respectively.

As of July 1, 2025, total unrecognized stock-based compensation expense related to unvested restricted shares and restricted share units was $ 72.6 million, which we expect to recognize over a weighted-average period of approximately 3.0 years.

Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period, reduced by unvested restricted stock awards.

As of April 1, 2025 and April 2, 2024, an aggregate of 3.3 million and 3.2 million shares, of restricted stock and restricted stock units issued were unvested, respectively, and, therefore, excluded from the calculation of basic earnings per share for the fiscal periods ended on those dates.

As of July 1, 2025 and July 2, 2024, an aggregate of 3.2 million and 3.1 million shares, respectively, of restricted stock and restricted stock units issued were unvested and, therefore, excluded from the calculation of basic earnings per share for the fiscal periods ended on those dates.

Diluted net income per share is computed by dividing net income by the weighted-average number of common stock equivalents outstanding for the period.

Common stock equivalents for the 2026 Notes and 2030 Notes are determined by application of the if-converted method, and common stock equivalents for outstanding stock options, restricted stock and restricted stock units are determined by the application of the treasury stock method.

April 1, 2025

April 2, 2024

(In thousands, except per share data)

4 unchanged sentences

Diluted net income per share

(1) Shares of common stock equivalents related to outstanding stock options, restricted stock and restricted stock units of 0.8 million and 2.4 million for April 1, 2025 and April 2, 2024, were excluded from the diluted calculation due to their anti-dilutive effect.

(1) Shares of common stock equivalents related to outstanding stock options, restricted stock and restricted stock units of 0.8 million and 2.6 million for July 1, 2025 and July 2, 2024, respectively, were excluded from the diluted calculation due to their anti-dilutive effect.

No shares of common stock equivalents related to the 2026 Notes or 2030 Notes were included in the diluted calculation due to their anti-dilutive effect.

8 unchanged sentences

Segment information is presented below (in thousands):

For the thirteen weeks ended April 1, 2025

For the thirteen weeks ended July 1, 2025

Costs and expenses:

10 unchanged sentences

Capital expenditures

For the thirteen weeks ended April 2, 2024

For the thirteen weeks ended July 2, 2024

Costs and expenses:

4 unchanged sentences

Depreciation and amortization expenses

Impairment of assets and lease termination (income)/expenses

Acquisition-related contingent consideration, compensation and amortization expenses

Preopening costs

Total costs and expenses

Income/(loss) from operations

Capital expenditures

For the twenty-six weeks ended July 1, 2025

Costs and expenses:

Food and beverage costs

Labor expenses

Other operating costs and expenses

General and administrative expenses

Depreciation and amortization expenses

Impairment of assets and lease termination expenses

4 unchanged sentences

Capital expenditures

For the twenty-six weeks ended July 2, 2024

Costs and expenses:

Food and beverage costs

Labor expenses

Other operating costs and expenses

General and administrative expenses

Depreciation and amortization expenses

Impairment of assets and lease termination expenses/(income)

Acquisition-related contingent consideration, compensation and amortization expenses

Preopening costs

Total costs and expenses

Income/(loss) from operations

Capital expenditures

The following table presents information related to segment assets (in thousands):

April 1, 2025

December 31, 2024

2 unchanged sentences

Subsequent Events

On April 24, 2025 , our Board declared a quarterly cash dividend of $ 0.27 per share to be paid on May 27, 2025 to the stockholders of record of each share of our common stock at the close of business on May 14, 2025 .

On July 23, 2025 , our Board declared a quarterly cash dividend of $ 0.27 per share to be paid on August 26, 2025 to the stockholders of record of each share of our common stock at the close of business on August 12, 2025 .

On July 4, 2025, the U.S.

1 (a bill “To provide for reconciliation pursuant to Title II of H.

The legislation includes several provisions that may impact the timing and magnitude of certain tax deductions and provides for the permanent extension of several business tax benefits originally introduced under the 2017 Tax Cuts and Jobs Act.

Management is currently evaluating the provisions of H.R.

1 to determine the impact on our consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements