The company’s stock price has dropped nearly 60 percent in the past month.
Because of the COVID-19 pandemic, The Cheesecake Factory saw a 46-percent drop in same-store sales in March, but significant growth in off-premises business.
For Q1, comp sales are expected to drop by 13 percent. Before the outbreak, the brand was performing well, with comps rising 3 percent through February.
Off-premises sales have risen 85 percent since Q4. On an annualized basis, the off-premises sales would equal $3 million in average unit volume, according to the company. The brand said earlier that its off-premises channel allows the company to “operate sustainably” and that it historically approaches the size of many stand-alone restaurants. Off-premises represented 17 percent of sales for The Cheesecake Factory in Q4. Thirty-five percent of that was delivery, 13 percent online ordering, and walk-in was roughly about 50 percent.
Thirty units, including three Cheesecake Factory restaurants, are temporarily closed. The company’s stock price has dropped nearly 60 percent in the past month.
The news comes after the Cheesecake Factory furloughed 41,000 employees and said it will not pay rent in April. CEO David Overton took a 20-percent cut in salary and board members took a 20-percent reduction in compensation. All corporate workers and bakery administration employees have had their pay reduced between 10 percent to 20 percent.
The brand drew down $90 million from its revolving credit facility to bolster its cash flow and curtailed its planned unit growth for the year.
The company operates 294 units across the U.S. and Canada. That includes North Italia and Fox Restaurant Concepts, which it bought for north of $350 million this past summer. Those companies will not pay rent in April either.
According to recent data from Black Box Intelligence, full-service chains in all states have posted same-store sales declines of 60 percent or lower. In addition, Consumer share of stomach spend at full-service restaurants has fallen below 5 percent.