The Cheesecake Factory Reports Results for Third Quarter of Fiscal 2008

The Cheesecake Factory Incorporated (NASDAQ:CAKE) today reported financial results for the third quarter of fiscal 2008, which ended on September 30, 2008.

Total revenues increased approximately 8% to $405.1 million in the third quarter of fiscal 2008 from $375.5 million in the prior year third quarter. Net income and diluted net income per share were $11.8 million and $0.19, respectively.

Operating Results

Comparable restaurant sales decreased approximately 4.8% in the third quarter of fiscal 2008 from the third quarter of the prior year, in-line with the Company’s previously announced expectations.

By concept, comparable restaurant sales decreased an estimated 4.7% and 5.1% at The Cheesecake Factory and Grand Lux Cafe, respectively, in the third quarter of fiscal 2008 from the third quarter of the prior year.

"Guest traffic remained stable during the third quarter relative to the second quarter despite a significantly more difficult period for most of the restaurant industry stemming from high viewership events taking place during the quarter—including the Olympics, political conventions and presidential debate—coupled with the hurricanes and the impact on consumer sentiment from developments in the global financial markets,” said David Overton, Chairman and CEO. "Our earnings were also pressured by spikes in commodity and utility costs, which have begun to moderate as food and energy costs come off of the highest levels we have seen this year.”

"With a strong balance sheet, significant amount of free cash flow and concepts that are both relevant and appealing to guests, we are well positioned to weather the challenging operating environment. We will continue to manage our business for the long-term, with a near-term focus on stimulating sales and controlling costs,” concluded Overton.

Stock Repurchases

The Company repurchased approximately 4.3 million shares of its common stock during the third quarter of fiscal 2008 at a total cost of approximately $66 million, as part of its previously announced fiscal 2008 business plan, which included planned share repurchases of between $150 million and $200 million. The Company temporarily suspended its stock repurchase authorization and terminated its stock repurchase plan on October 16, 2008. In aggregate, the Company repurchased 9.6 million shares of its common stock at a total cost of approximately $172 million in fiscal 2008.

Targeted New Restaurant Openings

The Company anticipates opening two Cheesecake Factory restaurants in the fourth quarter of fiscal 2008, one of which opens today in Towson, Maryland. In total, the Company will open seven new restaurants in fiscal 2008, in-line with its expectations.

Conference Call and Webcast

A conference call to review the results for the third quarter of fiscal 2008 will be held on Thursday, October 23, 2008 at 2:00 p.m. Pacific Time. The conference call will be broadcast live over the Internet and a replay will be available shortly after the call and continue through November 22, 2008. To listen to the conference call, please go to the Company’s website at thecheesecakefactory.com at least 15 minutes prior to the start of the call to register and download any necessary audio software. Click on the "Investors” link on the home page, and select the link at the top of the page.

About The Cheesecake Factory Incorporated

The Cheesecake Factory Incorporated created the upscale casual dining segment in 1978 with the introduction of its namesake concept and continues to define it today with the two highest productivity concepts in the industry. The Company operates 144 restaurants throughout the U.S. under The Cheesecake Factory® name with an extensive menu of more than 200 items and fiscal 2007 average annual unit sales of approximately $10.4 million. Grand Lux Cafe®, the Company’s second concept, has 13 units in operation across the U.S. offering a broad menu of more than 150 items and average annual unit sales of approximately $12.7 million in fiscal 2007. The Company also operates one unit of its newest concept, RockSugar Pan Asian Kitchen™, and two bakery production facilities in Calabasas Hills, CA and Rocky Mount, NC that produce over 60 varieties of quality cheesecakes and other baked products. Additionally, the Company licenses two bakery cafe outlets to another foodservice operator under The Cheesecake Factory Bakery Cafe® mark. For more information, please visit thecheesecakefactory.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this release are generally identified by words, such as "believes," "anticipates," "plans," "expects," "will," and "would," and similar expressions that are intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. In particular, forward-looking statements regarding the Company’s restaurant sales trends are subject to risks and uncertainties due to macro national and regional economic and credit market conditions, rising unemployment, public safety conditions, adverse weather and other factors outside of the Company’s control that impact consumer confidence and spending . Forward-looking statements regarding the number and timing of the Company’s planned new restaurant openings are subject to additional risks and uncertainties due to conditions discussed above and other factors outside of the Company’s control, including factors that are under the control of government agencies, landlords and others. Forward-looking statements speak only as of the dates on which they were made. The Company undertakes no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise unless required to do so by the securities laws. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements and the discussion of risk factors contained in the Company’s filings with the Securities and Exchange Commission. These filings are available on a website maintained by the Securities and Exchange Commission at www.sec.gov.