thank you for standing by my name is rebecca and i will be your conference operator today at this time i would like to welcome everyone to the cheesecake factory incorporated first quarter 2026 earnings conference call all lines have been placed on mute to prevent any background noise after the speaker's remarks there will be a question and answer session if you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I will now turn the call over to Etienne Marcus, Vice President of Finance and Investor Relations. Please go ahead.

Good afternoon and welcome to our first quarter Fiscal 2026 earnings call. On the call with me today are David Overton, our Chairman and Chief Executive Officer, David Gordon, our President, and Matt Clark, our Executive Vice President and Chief Financial Officer. Before we begin, let me quickly remind you that during this call, items will be discussed that are not based on our considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. It's really different from those stated or implied forward-looking statements that are detailed in today's press release, which is available on our website at investors.thechiefcakefactory.com and in our filings, the Securities and Exchange commission looking statements made on this call speak only as of today's date and the company undertakes no duty to update any forward-looking statements in addition during this conference impairment of assets and these termination expenses conciliations to the most directly

comparable gap measures appear in a press release we'll then review our first quarter to david overton thank you etienne we delivered strong results in the first quarter exceeding expectations across revenue, margins, and adjusted diluted earnings per share. This performance reflects disciplined execution across our restaurants and continued demand for our differentiated high-quality concepts. First quarter comparable sales at the Cheesecake Factory restaurants increased 1.6%, outperforming the industry and reflecting the strong affinity for our namesake concept. Culinary innovation continues to be a core strength of our business. Our recent menu additions, including new bites and expanded bowl options, have been well received by guests and highlight the broad appeal of our menu and the value we deliver to our guests. Importantly, these offerings keep the concept fresh and competitively positioned without relying on discounting. To this point, Cheesecake Factory's average weekly sales reached a new all-time high during the quarter, bringing our industry-leading annualized unit volumes to nearly $12.8 million. Strong sales and exceptional execution drove further improvement in the Cheesecake Factory's restaurant-level profit margins, and we delivered double-digit growth in adjusted diluted earnings per share year over year. Turning to development, during the first quarter, we opened three restaurants, including a North Italia, a Henry, and a Flower Child. In addition, one Cheesecake Factory restaurant opened in the first quarter in Mexico under a licensing agreement, the only international opening we expect this year. Subsequent to quarter end, we opened in North Italia, marking our 50th location for the concept. With these openings, we remain on track to meet our objective of opening as many as 26 new restaurants this year. In summary, we delivered a strong quarter, and as we look ahead, we will remain focused on delivering exceptional food, service, and hospitality, the hallmarks of our success, while continuing to execute our long-term growth strategy. Before I turn the call over, I am pleased to share we were once again recognized by Fortune as one of the 100 best companies to work for, marking our 13th consecutive year on the list. This recognition, based on direct feedback from our staff, reflects the strength of our culture and the engagement of our people. We believe this continues to be an important advantage in attracting and retaining talent in a highly competitive labor environment. With that, I will now hand the call to David Gordon to provide an operational update.

At this time, I would like to remind everyone, in order to ask a question, press star, than the number one on your telephone keypad please ask one question and a follow-up due to time restrictions we'll pause for just a moment to compile the q a roster your first question comes to the line of andy barish with jeffries please your line is open hey guys um can you just kind of go through i know um you know the the cheesecake business has been very consistent on the top line, just anything quarter to date.

I know it's been noisy with, you know, Easter and spring break shifts, but just, you know, anything you're seeing in your guests, any check management that you'd be willing to comment on would be helpful.

Sure, Andy, this is Matt. I mean, as you know, we're not going to give a specific, you know, we're expecting of the app.

Thanks, appreciate it.

Your next question comes to the line of Jeff Farmer with Gordon Haskett. Your line is open.

Thanks. Matt, you mentioned that the Q1 revenue performance exceeded, obviously the guidance, but what was the primary driver of that outperformance relative to your guidance?

Yeah, Jeff, this is a cheese cake fact.

As it relates to intro quarters, it really kicked off in early March and gas prices jumped. Did you see any impact on central sales for any of the businesses?

Your next question comes to the line of Jim Salra with Stevens. your line is open hey guys good afternoon thanks for taking our questions uh maybe a two-part question one just some housekeeping are you going to provide the breakout of cheesecake factory comps the the traffic the pricing and then the mixed components and then as we look at the the strong results in the quarter i know historically you've talked about kind of gdp and jobs numbers as having a big influence on, you know, guest traffic and engagement with the brand. I don't think we've had necessarily very good jobs numbers this year. They haven't been horrible, but I think kind of continuing the slow growth from 2025. But then, you know, we see your results accelerating. And so I was hoping maybe you could just kind of bridge what's happening at your restaurants that's maybe leading you to outperform relative to kind of the macro backdrop as a whole.

The Cheesecake Factory, for Cheesecake Factory, really at a like-for-like basis.

So we're taking, so lastly, continued retention management level operations teams to execute as well as they ever have. And we continue to see that type of net promoter scores continuing to be positive. And that just has a flywheel. Having those can never be overlooked.

Great. Well, I appreciate the detailed thoughts. I'll hop back in the queue.

Your next question comes to the line of Jeff Bernstein with Barclays. Your line is open.

Hi. Good afternoon. This is Pradeck on for Jeff. Just a quick housekeeping question. Can we also have the components of the comp for North Italia, please? And then I have a real question.

Yeah, this is Etienne. Happy to provide that for the component. That came down a little bit.

And then traffic was negative 6%. thank you for that i appreciate it and then my bigger picture question was um i appreciate that your brand skewed to relatively higher income consumers but you know with elevated gas prices inflation north of three percent the ongoing stock market volatility it just seems like everyone is frustrated these days to some degree so i was just wondering if you're seeing any trade down from fine dining and other higher-end casual dining customers into your brands? Do you currently think you're capitalizing on that, or is there an opportunity to capitalize on that frustration? And secondly, in terms of whatever read you have on your own customers, do you see any check management in terms of alcohol, appetizers, or add-ons? Thanks.

Sure. This is David Gordon. We saw people attaching, taking market share, the quality of the food and the ongoing LTO.

Thank you very much.

Your next question comes to the line of Samantha Chang with Goldman Sachs. Your line is open.

Hi, this is Samantha on for Christine Cho. Thanks for taking my question and congrats on the strong results. With the new Cheesecake mobile app launched earlier this month, I know you mentioned that really guest feedback has been positive so far. Could you touch on any additional early observations that you have from the app rollout regarding member engagement and frequency, and how do you expect personalized marketing to evolve following this launch?

Sure, Samantha, this is David again. We still have one thing, but then on a one-on-one, you know, the best ROI in the beginning, promising to see, and continues week after week to be significant, but making sure we're – Great, that's helpful.

Thank you.

Your next question comes to the line of John Ivanco with JP Morgan. Your line is open.

Hi, this is Crystal, on for John. My first question is on Flower Child, so the 10% comp is really strong against a category that came in roughly at flat in the same quarter. And most of the discussion around unit growth, you said it has been dependent on your management pipeline, whether that's your general manager and your executive chef. I was wondering where are you on that, especially as a category is growing really fast compared to other segments in the restaurant?

Well, because I need people to be able to grow their, to reach that general manager and executive chef level up just a little bit from where we remain focused in the most important areas to enable the growth in that talent level to have the general managers and executive chefs in place in time for that growth.

Thank you. And on the second one is on North Italia. Looking at numbers, it looks like new unit volumes came down a little bit in the first I was just wondering how new units are opening up and if you could give a little bit more Sure.

It's the busiest opening week in the history of North Italia for any individual location, so in an existing market. And then in a new market in Northern California, that would have been our busiest opening if we hadn't just opened in Brea. We'll continue down the percent new to existing markets.

Thank you.

Your next question comes from the line of Jim Sanderson with North Coast Research. Your line is open.

Thanks for the question, and congratulations on a great quarter. I'm wondering if you could talk a little bit more about store margin at North Italia. That was a bit lower than expected, and what the unlocks or remedies are to get that back up to the double-digit teams.

And this happened to have to continue.

And just to follow up to that, how would leaning into launch impact the store margin just in general?

The incrementality and recapturing that is what the average is. And I think that's the key, right?

All right. And just last question for me. Just stepping back, how should we look at the ability for you to consistently expand consolidated store margin over time? I think it's pretty much flattish with prior years, the trend that we're seeing right now on an annualized basis. So the formula to get back to modest expansion.

Sure. Our full year guidance still calls for about 25 basis points.

All right. Thank you very much.

Your next question comes from the line of John Tower with Citi. Your line is open.

Hi, this is Karen Holthaus on for John Tower this evening. yeah anecdotally it seems that uh there's more social content coming out it's i think showing up in at least within our team we've talked about it our feeds uh more often and i think just content that's more engaging um i could you maybe comment on anything you're doing differently on your end how you're measuring engagement in that channel and um you know how meaningful that you know you think that can be as a part of a go forward marketing strategy thanks here this is david um you know that we get on a regular paid media barry but just through um culture night tv etc but we have many different tactics across all social media platforms that um we'll continue to do that and then a quick um a quick second one you know i think cheesecake factory is probably one of the really like primarily u.s based brands that has a pretty pretty big brand recognition As you move around the world, you know, the iconocists of the concept, there's a theory, just the Big Bang Theory is a reason it's popular. Are you building anything explicit into your second quarter or annual outlook for a potential benefit around the World Cup and the associated tourism?

We do have great.

Great, great.

I'll pass it from there. Your next question comes from Kelly Merrill with Morgan Stanley. Your line is open.

Hey, this is Kelly on for Brian. Thank you for taking our question. Just wanted to ask, do you have any plans to iterate on bowls and bites just as smaller portions become more popular among consumers? And can you remind us, is that menu going to be refreshed a few times a year like the core menu? Thank you.

Certainly, menu innovation is new bowls and bites, and there will be some new opportunities for guests to enjoy some new flavor profiles and some new interesting innovative menu items, whether that's on the bowls and bites menu or on the main menu and in bowls and bites. So our plan is to continue to make sure we have as much variety on the menu as possible. That's across every type of cuisine and every type of price point that we can offer for guests to give them the most value in any way they choose to use Cheesecake Factory.

Thank you.

Your last question comes from Sarah Senator with Bank of America. Your line is open.

Oh thank you. I just I guess I One last question on North Italia, and I apologize if you've touched on this earlier, but I guess AUVs are down a little bit year over year, perhaps more than the same store sales. I think one of the things that you've, maybe two things you've talked about in the past are cannibalization on the one hand, and on the other hand, awareness. So, you know, maybe a longer ramp on awareness is low, but also last year you had, you know, perhaps more of a cannibalization impact because of where you were building those restaurants. I guess, you know, as I look at this year, is cannibalization still a factor for North Italian? And also, I guess, conversely, are you opening in more new markets and is that part of why the AUV might come down? So just some insights into the development strategy.

Sure. That's a great question. Thanks, Sarah. I think the mix for this, we did call out last year, and we still have some of the markets as well of what, and that's our own in terms of creates a little bit of cannibalism.

Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.