Cheesecake Plans 21 Units

CALABASAS HILLS, CA-The Cheesecake Factory plans to open 21 new restaurants in 2007, the same number of new locations that the chain opened in 2006, company officials said Tuesday in a conference call with financial analysts. Cheesecake officials, discussing the company’s fourth-quarter results for 2006, said that this year’s new openings at the 131-restaurant chain would include up to five or six of its Grand Lux Cafes.

Most of the new openings in 2007 are scheduled for the second half of the year, as they were in 2006, when the company opened 13 new restaurants in the fourth quarter. The one restaurant that the company anticipates opening during the first quarter of fiscal 2007 will be a Grand Lux Cafe in Aventura, FL. Signed leases or letters of intent are in-hand for most of the potential 2007 openings.

The new restaurants in 2006 produced “a solid sales contribution,” according to David Overton, chairman and CEO. The Grand Lux format fared better on a comparable sales basis, climbing 7.8%, compared with just under half a percentage point at the Cheesecake Factory.

Of the new locations that Cheesecake opened in 2006, 13 were in existing markets, noted Michael Dixon, the company’s CFO. “The strategy of capturing additional profitable market share in areas that we know very well and our brand recognition is high has worked well for us,” Dixon told the analysts. “We will continue to maximize this opportunity in the future,” he said.

Longer-term, Dixon added, “We feel very confident that there is plenty of profitable growth ahead for both the Cheesecake Factory and the Grand Lux concepts. With only 131 restaurants open to date, the majority of our expected revenue growth for the next two years will continue to come from the opening of new restaurants.”

For the fourth quarter, the Cheesecake Factory reported net income of $20.4 million, or 26 cents a share, compared with $22.5 million and 29 cents per share in the fourth quarter of fiscal 2005. This year’s results included costs of five cents per share associated with expensing stock options.