The Cheesecake Factory shared August 26 in a securities filing that it’s restored pay for all corporate employees below the executive officer level, and recalled “a majority” of its staff previously furloughed. Additionally, the casual chain terminated roughly 175 workers in connection with COVID-19 impacts and the permanent closure of two restaurants.
The Cheesecake Factory previously reduced pay for all corporate and bakery administration employees by graduated amounts of 10–20 percent. It announced in March that it was furloughing 41,000 hourly workers and trimming the salary of CEO David Overton 20 percent. The board of directors also took a 20 percent reduction in compensation.
Through the first and second quarter, same-store sales declined 35.9 percent. The Cheesecake Factory improved from a 66 percent plummet in April to a decrease of 42 percent in June. Total revenue at Cheesecake restaurants fell from $551.5 million in 2019 to $241.1 million this year, or a 56 percent slide. North Italia’s comps declined 59 percent in Q2.
The company ended the period with 206 Cheesecake and 23 North Italia units. There are 294 restaurants total with the addition of Fox Restaurant Concepts.
The Cheesecake Factory said in July that of the 146 restaurants open for indoor dining, sales were at 80 percent of prior-year levels, or more than $8 million per unit on an annualized basis (AUVs in 2019 were $10.76 million). This despite 50 percent capacity limits. The lift is coming from off-premises growth, which pushed 50 percent of total sales quarter to date at that point. Since reopenings began in mid-May, the company said, it was able to hold 90 percent of the growth it built outside the four walls during the pandemic.
At the 33 Cheesecake locations opened at 50 percent for the full month of June, sales were registered 87 percent of prior-year levels, with a nearly flat margin of 17.5 percent.
At the end of Q2, 36 stores were serving outdoor dining. And 22 were off-premises only, with weekly sales amounting to $4.2 million per unit on an annualized basis. The company said online ordering comprised 40 percent of off-premise sales while delivery contributed 35 percent.
The Cheesecake Factory restoring pay reflects an improving climate for chain restaurants. The NPD Group reported that in the week ending August 16, customer transaction declines at major restaurant chains improved into the single-digits after 21 weeks of double-digit declines. Customer transactions declined 9 percent compared to year-ago levels—a full 35 points better than the steepest decline of negative 44 percent in the week ending April 12.
Full-service chains notched declines of 19 percent compared to last year, which is 57 points better than April 12’s plummet of negative 76 percent.
