The Cheesecake Factory Incorporated Monday provided a business update related to the impact of COVID-19.
All of the company’s restaurants have transitioned to an off-premise operating model as required by state and local officials. The Cheesecake Factory restaurants have a long-standing business in the off-premise channel, with historical sales volumes approaching the size of many stand-alone restaurants, which is enabling the company’s restaurants to operate sustainably at present under this model. Currently, 27 locations across the company’s concepts, including two The Cheesecake Factory restaurants, are temporarily closed.
In addition, the company drew an additional $90 million on its revolving credit facility to increase its cash position. The company has also curtailed its planned unit growth for the year and is evaluating additional measures to further preserve financial flexibility.
“As we navigate through COVID-19, the health and well-being of our staff members and guests remains our number one priority,” said David Overton, Chairman and Chief Executive Officer. “We have been following the guidance of the CDC and our local health departments and will continue to do so throughout this evolving situation. At the same time, we are grateful for the opportunity at present to continue to serve and comfort our guests via to-go and delivery orders.”
“The coronavirus pandemic has had an unprecedented impact on the restaurant industry as containment measures escalate. While the situation remains fluid, we are taking decisive but difficult actions to enable our restaurants to manage through the specific circumstances in their communities, while further strengthening our liquidity position. With 42 years of history as a guide, we believe we will overcome these challenging near-term operating conditions and be even better positioned for the long term,” concluded Overton.
Given the uncertainty associated with the rapidly evolving COVID-19 situation, the company is withdrawing its first quarter and fiscal 2020 financial guidance provided on its fourth quarter fiscal 2019 conference call and in its Annual Report on Form 10-K for the year ended December 31, 2019.
The company owns and operate 294 restaurants throughout the United States and Canada under brands including The Cheesecake Factory, North Italia, and a collection within the Fox Restaurant Concepts subsidiary.
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