Could you provide more color on the monthly cadence of comps, price/traffic/mix dynamics, and social media levers/metrics?

Matt Clark stated Cheesecake Factory's Q2 pricing was 3.0%, traffic 2.7%, and mix 0.1%. He noted a modest acceleration in comps in the back half of Q2. Social media mentions were 2-3x the casual dining average, with 'menu hacks' driving measurable traffic, contributing to the overall trend. “Specifically in the quarter for Cheesecake, pricing was 3.0%. Traffic was a positive 2.7% and then mix was almost 0, it's 0.1% positive.”

When did the inflection point for comps occur, and is the implied Q3/Q4 comp trajectory correct? Are ordering patterns changing with increased traffic?

Matt Clark indicated momentum started in Q1 (weather-adjusted), with the app launch acting as a catalyst, but it was a 'highly orchestrated effort' of multiple factors. Ordering patterns are consistent, except for viral 'menu hacks' which are being ordered more. “I mean, I think it's fair to say then that the launch of the app was a catalyst and because it drove significant downloads early on, I think we were like #3 on the app list for a day behind just a couple of the massive AI companies. And that was a piece that I think rippled through for a period of time.”

How should pricing be thought of for H2, and would traffic momentum change the philosophy on reinvesting in the consumer by pricing below inflation? What insights from Cheesecake Factory's success are applicable to other brands?

Matt Clark stated pricing would be just under 3% in Q3 and 3% in Q4, effectively below 2% due to menu investments. Pricing is evaluated twice-yearly to offset inflation, with a focus on investing in price points, marketing, or staffing. David Gordon highlighted applying Cheesecake Factory's service, hospitality, value, marketing, and people practices to North Italia and Flower Child. “So we'll be just under 3% in Q3, and that's just related to some timing year-over-year. And then Q4, we'll be at 3%. And as I noted, it's really below 2% when you think about the investments we're already making.”

CAKE

Cheesecake Factory (CAKE) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Consumer Discretionary· Jul 28, 2026

Source: earnings call transcript

Executive summary

The Cheesecake Factory Q2 FY26 — Record Revenue and Strong Comps Driven by Innovation and Digital Engagement

The Cheesecake Factory delivered a record-setting quarter, exceeding $1 billion in revenue, driven by strong comparable sales and positive traffic at its namesake brand. Culinary innovation, the successful Cheesecake Rewards app launch, and effective social media engagement fueled this momentum. While North Italia faced sales declines, the company is implementing targeted initiatives to improve its performance, leveraging learnings from its successful concepts.

Highlights

Quarterly revenue surpassed $1 billion for the first time.
Adjusted diluted EPS increased 24% year-over-year to $1.44.
The Cheesecake Factory comparable sales grew 5.8% with positive traffic of 2.7%.
The Cheesecake Factory restaurant-level margin reached 20%, its highest in a decade.
Flower Child comparable sales increased 13%, with annualized AUVs of $5.3 million.

Concerns

North Italia comparable sales declined 3%.
North Italia restaurant-level profit margin decreased to 15.6% from 18.2% YoY due to sales deleverage and higher commodity inflation.

Guidance & targets

Category	Target	Timeline	Confidence
Total Revenues	$980 million and $990 million high materiality	Q3 · FY26	High
Effective Commodity Inflation	low single digits medium materiality	Q3 · FY26	High
Net Total Labor Inflation	low to mid-single digits medium materiality	Q3 · FY26	High
G&A	$63 million and $64 million medium materiality	Q3 · FY26	High
Depreciation	$29 million medium materiality	Q3 · FY26	High
Preopening Expenses	$10 million to $11 million medium materiality	Q3 · FY26	High
Adjusted Net Income Margin	about 4.3% high materiality	Q3 · FY26	High
Tax Rate	approximately 13% to 14% low materiality	Q3 · FY26	High
Weighted Average Diluted Shares Outstanding	approximately 3% to 4% higher than prior year low materiality	Q3 · FY26	High
Total Revenues	approximately $4 billion high materiality	FY26	High
Total Inflation (commodity, labor, other OpEx)	low to mid-single-digit range medium materiality	FY26	High
G&A as % of sales	about 6.4% medium materiality	FY26	High
Depreciation	about $116 million medium materiality	FY26	High
Preopening Expenses	approximately $35 million to $36 million medium materiality	FY26	High
Net Income Margin	approximately 5.4% high materiality	FY26	High
Tax Rate	approximately 11% low materiality	FY26	High
Weighted Average Shares Outstanding	49.5 million low materiality	FY26	High
New Restaurant Openings	as many as 26 high materiality	FY26	High
New Cheesecake Factory Openings	as many as five to six medium materiality	FY26	High
New North Italia Openings	six to seven medium materiality	FY26	High
New Flower Child Openings	seven medium materiality	FY26	High
New FRC Restaurants Openings	as many as seven medium materiality	FY26	High
Cash CapEx	approximately $210 million high materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
The Cheesecake Factory Led performance with strong top-line sales, positive traffic, and market share capture, driving solid flow-through and highest restaurant-level margin in a decade. Comparable sales growth: 5.8%Traffic growth: 2.7%Annualized unit volumes: >$13.5 millionAverage weekly sales: new all-time high	$729.5 million	7%	—	20%
North Italia Experienced comparable sales decline and margin pressure due to sales deleverage and higher commodity inflation. Implementing value-oriented menu offerings and targeted marketing. Comparable sales decline: 3%Annualized AUVs: $7.9 millionNew restaurant average weekly sales: >$200,000	$98.4 million	8%	—	15.6%
Other FRC Includes The Henry, which opened a new location in Wilmette with strong initial sales. Sales per operating week: $142,100	$104 million	15%	—	—
Flower Child Continued exceptional performance, outperforming the fast casual segment with strong sales, traffic, and restaurant-level profit margin. Differentiated menu and elevated experience driving repeat visits. Comparable sales increase: 13%2-year comp sales increase: 17%Annualized AUVs: $5.3 millionSales per operating week: $101,300Traffic growth: ~8%	$56.6 million	18%	—	20.1%
External Bakery	$15.4 million	—	—	—
The Henry (Wilmette) New location opened subsequent to quarter end, showing strong initial sales performance. Average weekly sales (first six weeks): $200,000Annualized AUV: >$10 million	—	—	—	—

Product announcements

Product	Type	Timeline	Details
Brownie Crunch Choc-a-Lot Cheesecake	launch	later this week

Risks & headwinds

North Italia sales deleverage and higher commodity inflation Q2 FY26

260 bps margin decline (18.2% to 15.6%)

Mitigation:Implementing value-oriented menu offerings (lower-priced pasta, lunch specials) and increased targeted marketing to build brand awareness and improve value perception.

Geopolitical risk, midterm elections, government shutdown near-term

unquantified

Mitigation:Monitoring external factors; no specific mitigation stated beyond general awareness.

What to watch in Q3 FY26

North Italia Traffic Trends

next several quarters

Current declined 3%

Target improvement

Why it matters

North Italia's performance is a key focus, and the effectiveness of new value-oriented menu offerings and marketing initiatives will be crucial for its long-term growth and margin recovery.

improvement will take time, and we expect some variability in traffic trends over the next several quarters as we begin to see the impact of these efforts.

Find out whether CAKE delivers this. Inve re-checks your case every morning.

Q&A highlights

How much of the positive traffic at Cheesecake Factory is due to the app launch vs. other factors? Are younger guests coming in more?

David Gordon attributed the positive traffic to strong operations, culinary innovation (Bites & Bowls), and the app launch. He noted a pickup in younger guests due to social media engagement and mall trends, with some planned and unplanned social media activity resonating.

“I think that there's a few factors at play. One, I think we've had terrific momentum moving into the quarter. I think all three of the items that I touched on in my prepared remarks, number one, starting with just really strong, good, consistent operations by our operations teams continues to be a focus that I think our guests are appreciating.”

asked by Jon Tower · answered by David Gordon

2 min read 5 chapters

Detailed narrative

The Cheesecake Factory's Strong Performance Drivers

The Cheesecake Factory brand achieved record revenue and comparable sales growth of 5.8%, driven by positive traffic of 2.7%. This outperformance was attributed to best-in-class operational execution, ongoing culinary innovation with new menu items like Bites and Bowls, and the successful launch and engagement of the Cheesecake Rewards app.

The brand also benefited from increased marketing activity, including social media and influencer partnerships, which resonated with younger guests and contributed to market share gains.

North Italia's Challenges and Strategic Response

North Italia experienced a 3% decline in comparable sales and a decrease in restaurant-level profit margin to 15.6% from 18.2% year-over-year, primarily due to sales deleverage and higher commodity inflation. In response, management is implementing targeted initiatives, including more value-oriented menu offerings like lower-priced pasta and lunch specials, and increased local marketing efforts to build brand awareness and improve guest perception of value.

These efforts are expected to take time to yield sustainable traffic improvements.

Flower Child's Exceptional Growth

Flower Child continued its strong performance, with comparable sales increasing 13% and a 2-year comp sales increase of 17%. Annualized AUVs reached $5.3 million, and restaurant-level profit margin was 20.1%. The brand's success is attributed to its differentiated health-forward, made-from-scratch menu at accessible price points, combined with an elevated dining experience and disciplined execution. Management sees significant long-term growth potential for Flower Child.

Financial Highlights and Capital Allocation

The company reported record quarterly revenue exceeding $1 billion and adjusted diluted EPS of $1.44, up 24% year-over-year. Adjusted EBITDA reached a record $118 million, up 18%. The company ended the quarter with $561.7 million in total available liquidity. Capital allocation included $43 million in CapEx, $9.3 million in share repurchases, and $15.7 million in dividends, demonstrating financial flexibility and commitment to shareholder returns.

Impact of Digital Engagement and Social Media

The Cheesecake Rewards app launch significantly boosted member acquisition and engagement, providing valuable insights into guest behavior and enabling personalized offers. The company also leveraged social media and influencer partnerships, which contributed to increased brand visibility and traffic, particularly among younger demographics. Management noted that some viral menu items, including long-standing ones, have driven measurable traffic.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.