Good day. Thank you for standing by. Welcome to The Cheesecake Factory first quarter fiscal 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during that session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ms. Stacy Feit, Vice President of Investor Relations. Please go ahead. Thanks, May. Good afternoon, Welcome to our first quarter fiscal 2021 earnings call. On the call 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 historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could be materially different from those stated or implied in forward-looking statements as a result of the factors detailed in today's press release, which is available on our website at investors.thecheesecakefactory.com and in our filings with the Securities and Exchange Commission. Speak only as of today's date, the company undertakes no duty to update any forward-looking statements. In addition, throughout this conference call, we will be presenting results on an adjusted basis, which reflects the potential impact of the conversion of the company's convertible preferred stock into common stock. An explanation of our use of non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures appear in our press release on our website, as previously described. David Overton will begin today's call with some opening remarks, and David Gordon will provide an operational update. Matt will then briefly review our first quarter results and provide a financial update. With that, I'll turn the call over to David Overton. Thank you, Stacy. Following an uncertain start to the year, given the impact of dining room closures and capacity restrictions, March served as a positive inflection point in our sales trend as restrictions eased and consumer spending generally increased. By mid-March, nearly all The Cheesecake Factory restaurants. We saw significant pent-up. An annualized basis at The Cheesecake Factory restaurant, based on average weekly off-premise sales during the first quarter. Our operators did a tremendous job managing the dine-in and off-premise sales levels, delivering delicious, memorable experiences for our guests and also exceeding our expectations across our key performance indicators. This drove a strong end to the first quarter and a solid start to the second. On the development front, during the first quarter, The Cheesecake Factory opened in Washington, D.C., just down the street from the White House. The local response has been incredible. Opening week sales exceeded $230,000, and that was just 25% indoor dining capacity. During the first quarter, North Italia opened in Birmingham, Alabama, a new market, and a second North Italia location in the Miami area opened subsequent to quarter end. The response from guests, media, and local influencers in both markets was extremely positive as the concept continues its national expansion. One of the FRC incubation concepts, Blanco, opened its first location in the South in Nashville to an hour wait. The restaurant has fantastic real estate at the new Fifth and Broadway development, and the Mexican-inspired menu has proven very distinct in that market. This is the top performer among the Blanco restaurants in its first seven weeks of operations. Turning to international, the first downtown Shanghai The Cheesecake Factory location opened under a licensing agreement earlier this month. This restaurant had a tremendous opening with nearly $225,000 in sales the first week. We believe this restaurant's performance will be a good indicator for The Cheesecake Factory's continued potential in mainland China. We are now on track to open as many as 14 new restaurants across our concepts this year as we have more visibility on our pipeline of sites, including the timing of one new Cheesecake Factory location that shifted to 2022. Internationally, we continue to expect as many as three Cheesecake Factory locations to open under licensing agreements, including the recent Shanghai opening. Before I turn the call over to David Gordon, I'm proud to share that The Cheesecake Factory has been named one of Fortune magazine's 100 Best Companies to Work For the eighth consecutive year. Again, we are the only restaurant company on the list. This accolade is even more meaningful in the context of the challenges we faced during and the unique labor environment the restaurant industry is currently experiencing. Our team's dedication to the guests and each other has always made us a great place to work, and this has been even more true during the past year. This recognition would not have been possible without all the amazing people and the incredible culture we have built together. We believe we have one of the best teams in the industry, which we expect to continue to differentiate us in the COVID operating environment and as we emerge from the pandemic. With that, I'll turn the call over to David Gordon. Thank you, David. As the playing field leveled for us in March when COVID related dining restrictions in many of our key markets eased, in addition, as vaccination progressed, we saw incredible pent-up demand for the experiential dining occasions we provide our concepts. The Cheesecake Factory restaurants with reopened indoor dining rooms generated average weekly sales in March that equated to approximately $11.5 million on average per unit on an annualized basis, outpacing 2019 average unit volumes. This compared to approximately $10.4 million on average for the entire first quarter, including the stronger March period. Strong sales trends continued into the second quarter, with quarter to date through April 27th, comparable sales at The Cheesecake Factory restaurants up 7% versus 2019, including in the most recent week at the same level. Based on average weekly sales quarter to date of approximately $222,500, this equates to approximately $11.6 million on average per unit on an annualized basis. On average, The Cheesecake Factory locations are operating at approximately 60% indoor dining capacity with approximately two-thirds total on-premise capacity, including patios. We continue to believe the magnitude of these sales volumes underscores the tremendous brand affinity for The Cheesecake Factory. Our continued strong performance in the off-premise channel has supported these sales volumes, with off-premise comprising approximately one-third of total sales quarter to date. On an absolute basis, this equates to nearly $4 million on average per unit on an annualized basis, based on second quarter to date average weekly off-premise sales. We curtailed our off-premise marketing as sales significantly strengthened in March and April. We believe the appeal, quality, and increased awareness of our offering has enabled us to drive the highest level of off-premise sales dollars and maintain the highest level of off-premise sales when indoor dining rooms reopen relative to our publicly traded casual dining peers. Our ability to sustain off-premise sales around these levels for over a year reinforces our belief that a meaningful increase in off-premise sales could be a longer-term sales driver for The Cheesecake Factory as we emerge from the pandemic. Turning to North Italia. Currently, all locations have indoor dining rooms open. We've seen strong pent-up demand from guests wanting to return to the restaurants, but we have also continued to drive solid off-premise volumes, second quarter to date of approximately 20% of sales. North Italia second quarter to date through April 27th, comp store sales are up approximately 8% versus 2019 levels. We continue to believe North Italia's performance during the pandemic reinforces the long-term potential for the brand. At present, all open FRC locations have indoor dining capacity, and two locations currently remain closed, but plan to reopen later this quarter. The FRC concept sales have also continued to build, while off-premise volumes remain solid. As we mentioned on a prior call, FRC tested a digital forward Flower Child via a pop-up format in Arizona earlier this year. The in-restaurant kiosk technology that was tested enabled a faster ordering experience and also features artificial intelligence that learns individual guest behaviors in order to provide an even better experience. FRC plans to incorporate this technology at future Flower Child locations, complementing the traditional ordering mechanism. In closing, we could not have achieved this strong first quarter results without our incredible teams. There is no denying the last year has been difficult on our people, so I want to take a moment to again thank them from the bottom of my heart for their commitment and dedication to our company, guests, and each other. We work hard cultivating our culture to ensure that we remain an employer of choice, and we are so humbled by the Fortune magazine 100 Best Companies to Work For recognition. Increases in both manager and hourly staff retention during the first quarter versus pre-COVID-19 levels also further underscores this positioning. While COVID-19-related uncertainty remains in the near future, and we don't know where consumer spending patterns will ultimately shake out, we are very encouraged by all of our concepts' performance during the first quarter as well as second quarter to date. We continue to believe that the strength of our brands, best-in-class operators, and breadth of high-quality growth vehicles, our long-term outlook is bright. With that, I will now turn the call over to Matt for our financial review. Thank you, David. First quarter comparable sales at The Cheesecake Factory restaurants increased 2.8% year-over-year. Relative to the 2019 period, comp sales were down 10.4% for the quarter, but just 2% lower in March. Off-premise represented approximately 43% of total Cheesecake Factory restaurant sales during the first quarter. Revenue contribution from North Italia and FRC totaled $87.5 million. North Italia comparable sales increased 5% year-over-year and were down only 5% versus the 2019 period. Sales per operating week at FRC, including Flower Child, were approximately $80,700. Including $16.7 million in external bakery sales, total revenues were $627.4 million during the first quarter of fiscal 2021. Cost of sales declined 120 basis points, primarily reflecting a shift in sales mix, relatively higher year-over-year third-party bakery sales, as well as pricing leverage. Labor declined 200 basis points, primarily attributable to the lapping of the deleverage that occurred in March in the prior year period associated with the onset of COVID-19. Other operating expenses increased 160 basis points due primarily to higher restaurant level incentive compensation, increased marketing, and costs such as additional cleaning and PPE associated with COVID. Our operators did an incredible job managing the level of sales we drove during the first quarter. With The Cheesecake Factory flow-through of nearly 40% year-over-year and approximately 50% sequentially versus the fourth quarter of 2020, both inclusive of COVID-related costs. We made good progress toward our objective of recapturing 2019 restaurant-level margins at The Cheesecake Factory restaurants, despite the restrictions we faced for the first two months of the quarter. G&A as a percentage of sales was approximately flat year-over-year, as a higher corporate bonus accrual was offset for cost management. Pre-opening costs were $3.9 million in the quarter, compared to $3.1 million in the prior year period. One of each of The Cheesecake Factory, North Italia, and FRC's Blanco concept opened during the first quarter, versus one North Italia and one Flower Child that opened in the prior year period. We recorded approximately $4.9 million of COVID-related expenses in the first quarter for costs such as sick and vaccination pay, healthcare, and meal benefits for furloughed staff members, additional sanitation, and personal protective equipment. A vast majority of these costs were in the other operating expense line, as I referenced, with a small net amount in the labor line, given the Employee Retention Credit offset. A specific breakdown between line items can be found in the related footnote in our earnings release issued this afternoon. GAAP diluted net loss per common share was $0.03. Reflecting the potential impact of the conversion of the company's convertible preferred stock into common stock, and excluding the COVID-related costs and certain other items, adjusted net income per share for the first quarter of 2021 was $0.20. Turning to our balance sheet and cash flow. We ended the quarter with total available liquidity of nearly $280 million, including a cash balance of approximately $181 million, up $27 million from year-end, and $97 million available on a revolving credit facility. Total debt outstanding was $280 million. The company generated approximately $22 million of cash flow from operating activities during the first quarter. As a reminder, the first quarter is typically a lower cash flow quarter due to the seasonality of our gift card business. CapEx totaled $7 million during the first quarter for required maintenance and new unit development. At the end of the first quarter, we entered into an amendment to our revolving credit facility that provides additional flexibility via an extension of the leverage and interest and rent coverage ratio covenant relief through the end of this year, given the ongoing COVID-19 pandemic. The ability to pay the dividend on the convertible preferred stock in cash, subject to certain conditions, and an increase of our permitted rolling 12-months CapEx basket to $120 million to support our planned unit growth for this year and the start of a number of sites for 2022. In turn, as previously announced, a $5.1 million cash dividend for the first quarter was paid to holders of the company's convertible preferred stock on March 31st. We want to continue to keep you updated on our underlying expectation of approximately 2%. We also continue to expect government-mandated minimum wage impacts to be more favorable in 2021 versus recent years. There is some uncertainty to overall hourly wage rate inflation, given the more competitive current industry labor environment. For modeling purposes, we expect G&A of approximately $47 million for each of the remaining quarters of the year to support our anticipated building sales trend as vaccination continues and dining restrictions ease, as well as our back half unit growth expectations. Currently, our estimated tax rate for the full year is approximately 7%. The actual rate for the year will depend on the level of income generated. With respect to development, we now expect to open as many as 14 new restaurants this year. Based on our pipeline of sites spread across our portfolio of concepts, we now anticipate as many as two The Cheesecake Factory restaurants, six North Italias, and six FRC restaurants, including two Flower Child locations. We would anticipate approximately $100 million in CapEx to support this level of unit development as well as required maintenance on our restaurants. We continue to believe with the strength of our restaurant brands, operations teams, and balance sheet, we'll be able to further accelerate growth to our targeted 7% level in fiscal 2022 and take market share. With that, we'll take your questions. Operator? As a reminder, to ask a question, you only need to press star one on your telephone. To join your question press the pound key. Please stand by while we compile the questions. We have our first question from the line of Sharon Zackfia from William Blair. Your line is now open. Hi, good afternoon. Congratulations, by the way, on the return to positive comps. That sounds great. It's making me hungry. I guess a question on off-premises. I think if I'm doing the math correctly, it seems like off-premises average weekly sales were actually up in April relative to the June quarter of last year. I just want to confirm if that's accurate, and only down kind of slightly, actually, from the March quarter, even as restaurants have really rebounded on premises. Hey, Sharon. This is Matt. I'm doing the quick math here, looking at it too. I think that that's pretty close. We'll double-check for you. I would say that for us, the key is it's been extremely consistent. We were right around that $4 million mark on an average unit volume per year. I think your math is probably right, and it's definitely moving in the right direction. Thanks for that. Then a follow-up question on labor. Are there any catch-up investments on the labor side that we should think about for the remainder of this year? It seems like your labor, if you look at it per operating week, is kind of well under the improvement you've been seeing in sales, even on a two-year basis. Just wondering if there's some sort of big catch-up there, if you're seeing some sort of extended wait times in the locations that maybe wouldn't be something that would be sustainable longer term. No, again, Sharon, this is Matt. I don't think there's any specific investments. We definitely are seeing sales increase, which means that we're hiring and we'll need to do training as we normally would actually running into the spring season. I think that that's relatively consistent. I think, oftentimes when you see a surge in sales like this, you get a little bit more leverage initially than you think you do, and you might end up with some very favorable labor metrics. I think in general, we're happy with the productivity that we have, and it's reflective of our historical productivity as much as anything else. Okay, great. Thank you. Next question is from the line of Nicole Miller from Piper Sandler. Your line is now open. I think I heard this properly, did you say you curtailed marketing around off-premise? If so, do you curtail it at the marketplace level where they were doing that on your behalf or some marketing that you were doing yourselves? Oh, hi, Nicole. It's David Gordon. We curtailed sort of the end of March, April. As we elaborated, really didn't see any impact to sales at all, and saw some very strong sales here just in the past few weeks. When it comes to the DoorDash marketing, things like top of the app preference and some of our normal considerations we get as an exclusive partner haven't changed. Any promotional activities, meaning discounting off of cakes or anything like that, those are the activities that we stopped. All right, great. Within store level margin, what's the marketing percentage, I guess, kind of embedded? What was it in 1Q? What might it be for this year? Is that amount more or less than last year? Thank you. Well, if you think about it for direct marketing, Nicole, this is Matt. Sort of overall marketing, there's obviously some of the commissions that we include in that for the delivery piece of it. For the direct marketing piece, we're really pretty much in line with where we have been historically in that 0.5%-0.6% range overall for the first quarter. That was sort of our plan for this year. I think that we'll evaluate the sales trends and we'll adapt, but that's consistent with where we've been and where we were in the first quarter. Thank you very much. Next is David Tarantino from Baird. Your line is now open. Good afternoon. Matt, I was wondering if you could give us a little bit of context on what margins could look like in the second quarter if this positive trend you're seeing in your business continues. Any sort of framework you could offer would be helpful. Sure, David, this is Matt. I think we've always taken the sales first approach during the pandemic, and I think while a lot of companies were targeting getting margins back faster, our goal has always been to get back to 2019 margins at 2019 sales levels. I think that is still a very good initial take. What we've talked about historically is when you get to that level and you go above that with sales that a flow-through of about 30% is probably within the range that we've performed at historically. I think, depending on where the sales levels are, that'll give you a sensitivity as to where the restaurant level margins could be. Then I think we try to give very specific G&A guidance and roughly, you're going to have pre-opening in the same ballpark that it was. I think you can get to a total from there. Got it. David, I was wondering if you could comment on the current staffing environment that the industry is seeing and what you're doing to make sure your restaurants remain fully staffed and operational the way you want them to be. David. Well, I think historically, as you know, our culture has always been what we believe a competitive advantage for us, and a reason that we're an employer of choice, and once again, three years in a row on the Fortune 100 Best Places to Work. Fortunately, we made the strategic decision on the management staffing side to keep all of our managers in place, which is enabling us to be able to execute, I think, as well as the operators are executing today. Just purely from a metric standpoint, we're at about 96% of our staffing levels pre-COVID-19. I don't know that we have as much catch-up to do perhaps as some others in our space. We've always paid a very competitive wage. We have a very strong career continuum that shows advancement opportunities. We've also taken this opportunity to bring back a couple of our recruiters to help at the hourly level of the restaurant so they can stay focused on operations. We feel really good about our plan in place. We don't really feel like the current staffing situation is going to have a negative impact on sales moving forward. Our operators are doing a great job, I think, of retaining the people that we have, and that's been something we've talked about since the beginning of COVID-19, that retention will be key once we get to this point. That will continue to be a focus and the strong retention we saw in the first quarter, we would hope will and anticipate will move through the rest of the year. Thank you for that. Do you think this dynamic is going to lead to an escalation in labor costs in order to retain or attract the right talent? Are you considering chasing this with more dollars, or do you think that will be required? I think we'll always be smart about how we chase it. If we're in a competitive place, we're certainly not going to lose our people, our really good people, over some small incremental increase that a restaurant needs to pay somebody. We're going to be smart and competitive about it. We have a lot of analytics that allow us to see what the market is paying so that an individual restaurant in any particular market knows what's happening right around them, and they can be appropriately competitive. David, this is Matt. I would just add to that, how you measure at the hourly level is the total. Obviously, with our sales, we're in a fortunate position to fully employ people for the hours that they want to work. Certainly that is going to help us with people as they're able to get more hours and sort of be fully staffed, if you will. The other thing we've seen as many have in the industry, but with a slightly higher check average, it also helps from a server productivity and their tip amounts relative to the hours worked. I think that that helps too. Great. Thank you very much. Next is Brian Mullan from Deutsche Bank. Your line is now open. Just a question about North Italia. I know you've spoken about the potential for 200 units or so over the long term, if we were to assume that the brand can go in every market where there's a Cheesecake Factory. My question is: can you talk about your degree of confidence today in that 200 unit potential? Is there some threshold number of units or even some threshold number of successful launches in certain geographies where your confidence goes up or down relative to where it is today? Just any thoughts on that would be great. Thanks, Brian. This is David. Our confidence remains very strong and very high on North and all geographies. We opened here in Birmingham, Alabama. We opened in Miami, a second location, and we continue to see great guest demand and great reviews. There hasn't been a market that we moved into yet where it's caused us to pause and say perhaps that 200 number is not realistic. We think it certainly is realistic. We could continue to grow North at about a 20% growth rate. We've seen that guests are responding to it in a very favorable way. We're very bullish on the future of North. Thanks. A follow-up question, which is similar, is just about Flower Child. If North Italia confidence is very high, you can scale nationally. How would you define your confidence with ability to scale nationally, maybe relative to how you feel about North Italia? What are you looking to learn from your openings over, say, the next one to two years? I think it's very similar. We've seen, again, Flower Child open in Oklahoma City of all places, and it's one of the busiest openings that they've had since Flower Child's inception. We feel good about, again, consumer guest demand, and it being a little bit more of a lifestyle brand. It's done well outside of Arizona, whether, again, that's Texas, Oklahoma City, Florida, California, you name it. We think that it will continue to grow, and it's working in different geographies. As I stated earlier, some of the learnings from the pop-up that happened in Arizona a few months ago are the type of things that we'll continue to look at employing if it makes the guest experience easier, faster, more convenient, along with the obviously delicious menu that thus far continues to do very well. We're launching new menu items at Flower Child on a relatively regular basis, and they continue to resonate with guests as well. Thank you. Next is John Glass from Morgan Stanley. Your line is now open. Very much. Two on the to-go business. Just first, in the markets that are most, as you've got portfolio across different markets that are in different stages of reopening. In the most reopened markets, is that to-go business the same percentage or the same dollars that it is in like a California where it's been slower to reopen? I think I asked this before, but how do you think about the headroom to grow that very strong off-premise business of $4 million? Is that kind of where you want it to be so you make sure you've got capacity to serve those dine-in guests which are coming in faster, or do you still think there's headroom to grow that even from these very high levels? I'd start, John, by saying that it is stable across all those geographies. Even in the markets that have expanded capacity, whether that's 50% or 75%, they're still seeing the high off-premise volumes. We'd be happy if that's where it stayed. I don't know that we're looking to grow that exponentially outside of what we're doing inside of the restaurants. We know that we can handle the capacity the way it is today. As the restaurants that are even at almost 100% capacity, maybe in Texas or in Florida, that their ability to handle the off-premise business gives us confidence. As we said before, because of the design of the restaurants, our ability to easily execute that off-premise business, I think that's why we're keeping a good part of it. The teams are doing a good job, and the guests are having good experiences. I would anticipate moving forward, we're hopeful that we'll keep what we have, and we'd be happy if that was the case. Just as a follow-up on the unit development pipeline across the portfolio, I think you talked historically about a 7% growth target. How soon do you get there? Do you think that's a 2022 event? You think the real estate's available, you're ready for that? Maybe a direct side to that, given your progress so far. I think, John, listen, I think 2022, that's what we're targeting. David Overton and the real estate team are sourcing sites right now towards that target. I think we feel good about that. Growing from there. I don't think we ever will really look for upside to that number because there is a rate of growth that's appropriate for each of the brands. We want to make sure that we're sourcing top sites as we always have and sourcing the right people for those locations and growing at the rate operations can handle. So that's it. Thank you. Next is. Yeah, wanted to just talk a little bit about your dine-in business. With patio is at about 66%, I think you mentioned, and dine-in sales, just doing the quick math, seem to be at about a similar percentage today than they were pre-COVID. Can that sales number for dine-in go significantly higher as we sit here today, or the actions you're taking with spacing and things like that do put a little bit of a governor on it? It is, Matt. Just when we look at the math, the simple math of those restaurants that go from, say, 50%- 75%, the absolute comp increase can be 10% or more. Definitely there's room, right? Because right now, roughly speaking, we have a handful that are at 25%, maybe nine or 10 locations, but we're kind of 50/50 almost, 50% and 75%. We know just going from 50 to 75, you're going to pick up a good amount. As we continue to grow from 75 from there, I would imagine there's a little bit of a diminishing return, but still some positive level. Great. Thank you for that color. Next is Jon Tower from Wells Fargo. Your line is now open. Kind of following up earlier to the marketing question. I know that David, you had alluded to the idea that the discounting that you've been at for the off-premise channel is gone temporarily, but that's the case first and foremost, that it's temporary. Second, how do you view using the marketing channel going forward? Is it more about building brand awareness and continuing to keep awareness levels high versus discounting? I got a couple more, if you don't mind. Sure, Jon. Well, I think you nailed it. Yes, it's about brand awareness. It's about making sure our social presence remains strong, our search engine optimization remains strong, and as long as we are not in a position where we're going to need to be doing that type of promotion, it'll be about brand awareness for The Cheesecake Factory and for North Italia as well, to continue that brand awareness as it continues to grow. Okay. Just on the G&A front, thanks for the quarterly guidance here, how should we think about that growth going forward over time as unit growth ramps this step up to roughly $47 million a quarter in 2021? Is that the first step up of a few more ahead as you reach that sustained level of 7% growth? Are we thinking that this is a slightly modest level of growth going forward? I think you've given guidance in the past as a percentage of sales, but it escapes me off the top of my head. Yeah. This is Matt Clark. Jon, I think that's probably how I would talk to it for the future, right? I think, given kind of the uncertainty in the sales levels, we thought it was better to be a little bit more prescriptive on the dollars. Really in the back half, we think this gets us to, depending on what the sales levels are, a run rate that is consistent with our target. If I extrapolate out, originally, our target was about 6.5%, and then improving a tenth a year from there, that would put our target for 2022 at 6.4% of sales. I think that's an easier concept to work with, and then improving a tenth a year from there and ultimately getting to 6%. Great. Just lastly, with demand being so high in the off-premise channel and remaining very strong, what are your thoughts on taking incremental pricing on the delivery menu specifically? I know today I think you run about low single-digit 2%-5% or so. Why not make that transaction itself either margin or penny profit accretive or even margin neutral to accretive to an in-store transaction? Jon, this is Matt again. I think the way we think about it is agnostic to the guest experience. I think that David has grown this company targeting absolute guest satisfaction, and we think that if it's basically margin neutral is a fair proposition, and we'll drive the business and we'll make our money that way, and that's where we're at today. The more that other companies take more pricing, the better off we're going to be actually, is the way we see it. I think it's a little bit of a contrarian view, but it seems to be working pretty well for us. Got it. Thank you. Appreciate it. Next is John Ivankoe from JP Morgan. Your line is now open. Hi, thank you. A slight follow-up on the pricing question and then a second one, if I may. On the pricing side, have you looked at your overall commodity basket? There's pressure in a number of different places, both on the raw commodities and I guess the cost to distribute them and process them as well. Looking at 2021 versus 2019, for example, if there's anything that's catching your attention that might necessitate some of the pricing that in the previous question you said you might not need to take. Yeah, John, this is Matt. I think it's a good longer-term question, and we'll monitor the environment. It's so hard to tell. A lot of the commodities markets remain highly volatile and at heightened levels today, but the futures curves look like they're going to come back to sort of more normal levels. Fortunately for us, we've done a great job. Our supply team has been amazing in the past 12 months, keeping things at a very consistent and predictable level. As I sit here and I look at our baskets, whether it's produce or dairy or meat or seafood or fish, they're all somewhere between +5% and -5% year-over-year, and that gets us to the weighted average of about a 2%. We're in really good shape with about 75% contracted for the year. As you know, we take pricing twice a year. We'll look at it, we'll see where the contracts start to build for next year. That's perfect. In the past, you guys have given very specific comments on relevant supply in your specific trade areas or maybe even your specific center that you're in. Could you update those? Has the number of relevant supply or competitors closed around you? In other words, are you seeing less relevant supply in the near term? If you can comment whether you think those spaces will be filled with restaurants over the next 12 months or so, if there's activity from a lease perspective in those sites, and how many of those sites maybe you can fill with your own brands. John, this is Matt again. It's a good question. To be honest, we did do a sort of a quantitative study in the fall. We followed back up more anecdotally with our boots on the ground. Indeed, you did see a little bit of a mini wave of closures in January. Not a big number. There are a lot of locations that we might look at. We're getting calls about those today. If anything, there was a little bit more relief on the supply side near us, but we don't have that quantified. Thank you. Next is Jeffrey Bernstein from Barclays. Great. Thank you very much. Two questions. The first one, a follow-up on the to-go business or off-premise. I think you mentioned in the first quarter it was, I think, 43%, and then I believe it's now down to a third of sales in April. I'm just wondering, I know you mentioned you would obviously hope to hold those levels. I'm just wondering what level we're referring to because it looks like as things reopen, the off-premise slipped, and maybe you can talk about it in terms of dollars. I'm just curious where you think it settles relative to where it was before. Just trying to figure out how much incremental sales you think you can hold on to from to-go, even if you got the in-store back to 100%. Sure. Jeff, this is Matt. We're really talking about the dollars piece of it, to be fair to your question there. When we think about really from Q1 to where we are now today, we've gained a significant amount of business, over 10%, and that's been on premise while we've kept the off-premise basically at the same levels. You get that mix shift is what is occurring. We've maintained basically the $4 million annualized AUV off-premise number, and recaptured on-premise while we've been doing that. Got it. What was the number pre-COVID relative to that $4 million? I believe it was sub $2 million, or? It was $1.7ish, $1.8ish, depending. It was in that range, and growing, but about that. Got it. If you were to maintain that extra north of $2 million, obviously that would be huge on your AUV base. Can you just talk about maybe the margin opportunity on that? I would think that off-premise is a slightly lower margin because you have less apps and desserts and drinks and stuff, and some fees for delivery, but obviously you would lever your fixed costs. I'm just wondering where the margins could go if you were to hold on to that extra $2 million or so of incremental to-go sales. Thank you. It's relatively neutral margin for us, right? We've got a great relationship on the delivery front, and that continues to be a very consistent 40%, online ordering 30%, and pickup 30%. We do take a little bit of extra pricing, as was referenced, low single digits for delivery. When you put all of those pieces together, the off-premise business basically ends up around the same margin as on-premise. We're pretty agnostic about where we drive the sales, as long as we're getting them. Great. Thank you. Next is Brian Bittner from Oppenheimer & Co. Your line is now open. Thank you. With your Cheesecake units trending 7% above 2019 levels, it is showcasing just incredible demand out there, and just curious how you want us thinking about what, if any, stimulus impact may be in there, or maybe perhaps there's evidence that you are seeing off-premise or et cetera, that suggests this strong trend that you're seeing versus 2019 is actually sustainable. Just your thoughts there. Brian, it's a good question. Nobody has that crystal ball, I think. We typically get a little less benefit from stimulus than lower down in the price ticket. It does feel, when we look at the trends, the last four weeks have been remarkably consistent, which is a hallmark of The Cheesecake Factory and a really good leading indicator for me. I'm into the statistics. We look at the day part, the day of the week, the geography. When I start to see aggregated numbers behave in a very normalized fashion week-over-week, I think that that's a very positive signal. I don't know if that's permanently sustainable. It certainly feels like the momentum is there outside of the stimulus money. That's great color, and my follow-up is just going back to the differences in capacity in Cheesecake restaurants like in California versus Texas and Florida. Are you in fact seeing really big differences in same-store sales versus 2019 levels across your portfolio simply based on capacity differences on the indoor dining, or are you actually seeing a pretty similar trend across your asset base? No. Certainly, when there's capacity differences, the difference between 50% and 75%, that comp difference is high single digits, right? There is a big difference, right? There's no question. When we open up a little bit more, particularly on those busy four shifts, Friday night through Sunday brunch, you're absolutely able to capture more business. What is the average comp, if you can tell us, for the store base that's in that top quartile on capacity? To be honest, I think it's been moving so often that we haven't looked at it over a sustained period because you'd have to take a vintage, if you will. Again, I would just say that the difference between, we're roughly 50/50 right now, between 50% and 75% plus extended, and the difference is high single digits. Okay. You can kind of extrapolate from there. Yep. Thank you so much. Next is Dennis Geiger from UBS. I wanted to ask another one on the dine-in business. I think, Matt, you just spoke to day parts, days of the week, consistency very recently, and maybe I missed it, but I'm curious if kind of the last couple of months, if you've seen different behaviors around day parts, days of the week than you saw maybe six months ago, or than you've seen historically. If that's the case, how you think about that going forward and maybe what that can do in term if you're getting folks to come in at different days of the week. If we reopen, you just see that the weekends, the numbers get stronger because that's where the on-premise demand has always been. With reduced capacity, it does limit it. One of the things that I would point out that I think is a good positive for us is that the biggest growth we've had in day parts, if I look at the most recent trends, is the mid-afternoon. Lunch was even slightly stronger than dinner, too, and so those have been two areas. Rebuilding the shoulders, right? The other thing I would say is that from a comp perspective, we are seeing outsized performance in the middle of the week. That's also positive, right? Where the areas of pressure have been for us have been middle of the day and the middle of the week, and we are seeing outsized gains there recaptured. I think those are both good. That's helpful. One more, if I could. Just curious your perspective on sort of mall traffic, competitor restaurants located within malls around your locations. If there's anything to share recently on what you've seen and the implications for your brands and then kind of your thoughts on the go forward on any implications there for your brands. Yeah, we haven't recalculated that, but we did see some closures right after the holidays, and certainly there is a little bit less competition near us. It seems to be quickly stabilizing, though, obviously, with the trends. I would say, just to comment on the mall traffic, I think there was a recent Wall Street Journal article that talked about the positive momentum in A properties for foot traffic. I think if anything, look, we've proven that without the malls being open, we can get the business. If they return some of their foot traffic, that's only going to be a net benefit for us. Thank you. We have our next question from the line of James Rutherford from Stephens Inc. Your line is now open. Hey, thanks for taking the question. You saw some leverage on your cost of sales line. I think you called out mix, bakery sales, and price, if I heard correctly, as the three drivers. There's been a few questions around commodities and menu price already, but when you put all that together, just how should we think about that cost of sales line in the P&L going forward? I have a follow-up, please. Yeah, it's probably slightly more beneficial than it will be over time because you do see some mix normalization. The pricing leverage is permanent, so we've had on that line item, because we've been balancing out the labor versus the commodity piece. You're going to get that permanently. We do maintain some degree of elevated dessert sales. I think in aggregate, we'll still see a favorable trend on commodities, maybe not quite as positive as we saw in the first quarter. Okay. Thanks for that. To follow up on Brian's question from a moment ago about near-term or recent trends, I noticed that you called out and compared to March that the most recent week is also running, I think, 7% above 2019 levels, implying perhaps that the results you're seeing are not so much one-time stimulus. At the same time, kind of week upon week, you are seeing more states open up capacity, which is propelling the overall comps. I'm just curious if you could share, even qualitatively, looking at a specific geography or geographies, are you seeing the sales volumes hold up week to week or even build after opening? Is the stability in your comp through April more a factor of more states are opening up? Just hope that makes sense. That's kind of a question about the durability of the recovery here. Yeah. Sure. From a capacity standpoint, it hasn't changed too much in April, right? Most of the California reopening occurred in March, and that's obviously the point of inflection for us, but the demand piece of it there. Mostly what we've seen is a very stable trend after reopening, and we typically build slowly during this quarter with seasonality. I think just from a consumer perspective, it looks and feels like people are going to want to get out and celebrate graduations and do some things like that. I wouldn't be surprised if from here, we followed a relatively normal seasonal pattern. Again, these trends are still developing, and April has been very consistent for us, and that at least helps us manage and plan the business. That's great to hear. Thank you. Congrats. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Next is Lauren Silberman from Credit Suisse. Your line is now open. Thanks. Matt, I believe you might have mentioned you're seeing higher average checks. Can you expand on what customer behavior changes you're observing as restaurants have reopened, whether it's mixed shifts, more premium items, alcohol consumption, higher incidences, appetizers, desserts? Sure. It really is not necessarily the reopening per se. It's been going on since there's been the ability to dine in at all, even if that's been on the patio. The guests are looking for experiences. I think we're just obviously, we are the experiential dining leader, particularly in The Cheesecake Factory, North Italia, all of our concepts. People are just looking to have maybe a little bit more. Dessert sales have generally trended a little bit up. The amount of incident rate on food items is slightly higher. It's just kind of a little bit across the board that people are looking to have this whole Cheesecake Factory experience. Great. Just another on off-premise. Do you have a sense of the overlap between the on-premise and off-premise guests and how customers are using those occasions differently? Are you seeing any difference in day parts, peak periods, or parts of the menu for on-premise and off-premise transactions? Lauren, this is David. They're very similar. I think that we've stated a little bit throughout the pandemic that the increase in some of the lunch business that we've seen on our off-premise promotions was very strong, we saw a lift from that. As far as ordering patterns, that high incident rate of desserts that Matt mentioned, we certainly see that when it comes to the off-premise guest, whether that's delivery, online ordering, or calling in and picking it up. That average check is very similar. The average check is calculated a little bit differently, it's maintained around $45, $48 on the off-premise throughout COVID, those elevated experiences around desserts have continued to stay strong now for 15 months. Great. Thanks so much. This concludes today's conference call. Thank you for participating. You may now disconnect.