In its latest business update related to impacts from the ongoing COVID-19 pandemic, The Cheesecake Factory (NASDAQ:CAKE) said yesterday that it now has 25% of its restaurants open at partial capacity. On average, these stores are at 75% sales levels compared to last year, due to the continued strength of off-premise sales along with improving dine-in traffic.
When the company reported its first-quarter earnings on May 5, 2020, it said comparable restaurant sales had decreased 12.9% for the quarter. Restrictions from the pandemic resulted in the temporary closure of 32 of the 294 total restaurants across its brands, as of the end of the quarter. The balance of open restaurants was limited to off-premise sales.
The company said that prior to the impacts from the pandemic, it was ahead of its plan for comparable store sales, and that it was "outperforming the broader casual dining industry trend." In its latest update, the company said it expects that 65% of total restaurants will be reopened with restricted capacity by mid-June.
The Cheesecake Factory says that it is continuing to operate the business at cash flow breakeven levels for restaurants limited to off-premise sales only. It has said that sales of approximately $4 million per unit on an annualized basis represents breakeven, on average.
In managing through the crisis, the company has also suspended new store development, furloughed a "significant number" of employees, increased liquidity, and suspended share repurchases and dividends.