Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to The Cheesecake Factory Incorporated Q1 2023 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, again, press the star one. We ask today that you limit yourself to one question and one follow-up. Thank you. Etienne Marcus, Vice President of Finance and Investor Relations, you may begin your conference. Good afternoon, and welcome to our Q1 fiscal 2023 earnings call. On the call with me today are David Overton, our Chairman and Chief Executive Officer, David Gordon, our President, and Matthew 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 fact 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. All forward-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 call, when discussing comparable sales, we will be referring to comparable sales on an operating week basis unless specifically stated otherwise. We will also be presenting results on an adjusted basis, which exclude impairment of assets and lease terminations and acquisition related expenses. 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 review our Q1 results and provide a financial update. Following that, we'll open the call to questions. With that, I'll turn the call over to David Overton. Thank you, Etienne. We entered 2023 with positive momentum and carried forward that trend to deliver a solid Q1 with our top and bottom line performance in line with expectations. Q1 consolidated revenues increased 9.1% over the prior year to $866 million. Despite the record rainfall in California, our largest market, The Cheesecake Factory restaurants comparable sales increased 5.7% versus prior year and 14.9% versus 2019. North Italia comparable sales increased 9% versus prior year and 30% versus 2019. Demonstrating the strength and the resilience of our broader portfolio, we delivered positive Q1 comparable sales growth across all of our concepts. The extensive and growing appeal of our differentiated concepts support our belief that we are uniquely well-positioned to capitalize on the continued favorable consumer demand for experiential dining. Execution within the restaurant's 4 walls was outstanding. With our operators driving solid flow-through to support profitability. This, combined with input costs consistent with our projections, resulted in adjusted net income margin of 3.5% for Q1 at the high end of our guidance. On the development front, we opened 2 FRC restaurants during Q1, including a Flower Child. While we continue to experience some delays in openings due to supply chain challenges and permit approval delays, at this time, we still expect to open as many as 20-22 new restaurants in fiscal year 2023, including 5-6 Cheesecake Factories, 5-6 North Italias, and 10 FRC restaurants, including 3-4 Flower Child locations. Additionally, we anticipate 2-3 Cheesecake Factory restaurants to open internationally under licensing agreements. As we look ahead, we remain intently focused on delivering exceptional food quality, service, and hospitality, the hallmarks of our success, to drive long-term profitable sales growth. At the center of our execution capability are our people, the driving force of our company, who enable us to deliver delicious, memorable experiences for our guests every day. To that end, we are honored to have been named to Fortune Magazine's 100 Best Companies to Work For list for the 10th consecutive year. This recognition is a testament to our strong culture, industry leading training, and commitment to our employees. We believe these attributes will continue to differentiate us as an employer of choice. With that, I'll now turn the call over to David Gordon to provide some additional details on our operations and marketing. Thank you, David. Our extensive and innovative menu and unwavering commitment to deliver excellent service and hospitality has made The Cheesecake Factory one of the most differentiated restaurant concepts in the casual dining industry for over 45 years. A key contributor to our success has been our distinct competitive advantage in staffing, our ability to attract, train, and retain highly dedicated staff members and best-in-class operators. We believe maintaining our industry leading position in staffing is foundational to achieving our longer term growth objectives. Our staffing levels remained healthy during the quarter. Applicant flow was robust, and our industry leading attrition rates further improved. In fact, in Q1, our hourly attrition declined by nearly 25% versus the prior year. We believe our retention trends were a key contributor to the sequential and year-over-year improvement in Net Promoter Score and service and food quality levels for The Cheesecake Factory restaurants. North Italia's attrition levels are nearing Cheesecake industry leading levels despite not having the national presence and brand recognition that Cheesecake Factory enjoys, which we believe affirms the effectiveness of the practices and programs we've implemented over the past few years. We think about further accelerating the growth of North Italia, the ability to leverage well-trained, tenured managers and staff will facilitate our efforts to scale into new and existing markets. You heard from David, our sales trends across our portfolio of concepts remain strong, we continue to see stable guest purchasing behaviors. To this point, the Cheesecake Factory off-premise sales for Q1 totaled 23% of sales for the third consecutive quarter. We do not see any material changes in on-premise incident rates over the past year, with incidence rates remaining above 2019 levels and daypart mix not changing materially. Fox Restaurant Concepts also continued to drive strong results with annualized AUVs of $7.9 million. We remain confident in the developing concepts in our portfolio and their ability to contribute to our growth. Turning to marketing. As I've previously shared, we've been developing a rewards program for The Cheesecake Factory. The overarching objective is to leverage data analytics and insights to more effectively engage with our guests on a one-on-one basis and drive incremental sales. We initially launched a pilot of the rewards program last June in Houston, followed by a second pilot launch in Chicago last November. We've had strong operational execution and as a result, have accomplished our pilot goals with our acquisition and member activity rates exceeding our expectations. We purposefully have taken a very measured and deliberate approach in designing Cheesecake Rewards to ensure it is consistent with our marketing strategy while targeting our desired financial objective of driving profitable sales growth. At this time, we're planning for a mid-year national launch of our new rewards program. With that, I will now turn the call over to Matt for our financial review. Thank you, David. Let me first provide a high-level recap of our Q1 results versus our expectations I outlined last quarter. Total revenues of $866.1 million were at the midpoint of the range. Adjusted net income margin of 3.5% was at the high end of the range. We continued to diligently manage G&A and depreciation, which combined as a% of sales were flat with prior year. We returned $25.6 million to our shareholders in the form of dividends and stock repurchases. Now turning to some more specific details around the quarter. Q1 sales at The Cheesecake Factory Restaurants were $656 million, an 8% increase over the prior year. Comparable sales increased 5.7% versus the prior year and 14.9% versus 2019. It is worth noting that as a result of fiscal 2022 having 53 weeks, the strong sales week between Christmas and New Year's Day shifted into the fourth quarter of 2022 from Q1 of 2023. Due to this calendar shift, that high volume sales week was replaced with an average sales week in Q1, negatively impacting our Q1 revenues by approximately $10 million in comparison to Q1 of fiscal 2022. Sales for North Italia were $63.3 million, a 20% increase over prior year, supported by comparable sales growth of 9% versus prior year. Comparable sales versus 2019 increased 30%. For FRC, excluding Flower Child, sales totaled $68.6 million, up 17% from the prior year. Sales per operating week were $152.2 thousand. FRC, including Flower Child, average weekly sales were $118.8 thousand. External bakery sales were $14.9 million during Q1 of fiscal 2023. Now moving to year-over-year expense variance commentary. Cost of sales increased 10 basis points, driven by slightly higher commodity inflation than menu pricing. Labor decreased 130 basis points, predominantly driven by pricing leverage and slightly lower medical insurance expenses. Other operating expenses increased 50 basis points, mostly driven by deleverage related to the revenue impact from the fiscal calendar shift. G&A remained flat as a percentage of sales. Pre-opening costs were $3.1 million in the quarter compared to $1.8 million in the prior year period. We opened 2 restaurants during Q1 versus no new openings in Q1 of 2022. In Q1, we reported a pre-tax charge of $3.4 million related to impairment of assets and lease termination expense and FRC acquisition related items. Q1 GAAP diluted net income per share was $0.56. Adjusted net income per share was $0.61. Now turning to our balance sheet and capital allocation. The company ended the quarter with total available liquidity of approximately $355 million, including a cash balance of about $116 million and approximately $239 million available on a revolving credit facility. Total debt outstanding was unchanged at $475 million in principal. CapEx totaled approximately $38 million during Q1 for new unit development and maintenance. During the quarter, we completed approximately $12.4 million in share repurchases and returned just under $13.2 million to shareholders via our dividend. While we will not be providing specific comparable sales and earnings guidance, given the operating environment continues to be very dynamic, we will provide our updated thoughts on our underlying assumptions for Q2 and full year 2023. For Q2, based on our quarter to date performance, most recent trends, and assuming no material operating or consumer disruptions, we anticipate total revenues to be between $870 million and $890 million. At this time, we expect effective commodity inflation of high single digits for Q2. We are modeling net total labor inflation of about mid-single digits when factoring in the latest trends in wage rates, channel mix, as well as other components of labor. Based on these assumptions, we anticipate net income margin of approximately 4.75% for Q2 of fiscal 2023 at the midpoint of the revenue range I previously outlined. This includes the elevated year-over-year commodities. Now for the full year. Based on our year-to-date performance, more recent trends, and assuming no material operating or consumer disruptions, we continue to anticipate total revenues for fiscal 2023 to be approximately $3.5 billion. We currently estimate total inflation across our commodity baskets, total labor, and other operating expenses to be in the mid-single digit range, moderating throughout the year. Given our unit growth expectations, we are estimating pre-opening expenses to be approximately $24 million. As we have said earlier, our goal is to effectively offset inflation with menu pricing to support our margin objectives. Assuming we do so and consumer trends remain consistent and there are no other material exogenous factors, we continue to expect full year net income margin of approximately 4% at the revenue level I provided. With regard to development, as David Overton highlighted earlier, we plan to open as many as 20-22 new restaurants this year across our portfolio of concepts, with approximately 80% of openings occurring in H2 of the year. We continue to anticipate approximately $165 million-$175 million in CapEx to support this year's and some of next year's unit development, as well as required maintenance on our restaurants. In closing, our Q1 operating performance was the most aligned with our pre-pandemic trends to date, both on the top and bottom line. Specifically, our total sales, most key business drivers, and overall profitability were all in line with our expectations. Importantly, our absolute sales trends remain solid and consistent with historical seasonality, despite the ongoing noise and volatility impacting year-over-year comparisons still related to the pandemic environment. Although the environment remains dynamic with our solid top-line performance, input costs gradually normalizing to more predictable levels, and the strategic steps we have taken, we believe we are well positioned to return to generating our historically consistent operational and financial results. We are working hard to build on this momentum despite the macroeconomic uncertainty, and believe the strength of our concepts and operating teams will continue to differentiate us through the balance of 2023 and beyond, as has been the case for over four and a half decades. With that said, we'll take your questions. Operator? Again, if you would like to ask a question, press star followed by 1 on your telephone keypad. We do ask today that you limit yourself to one question and one follow-up. Thank you. Your first question comes from the line of Sharon Zackfia with William Blair. Your line is open. Hi, good afternoon. I guess I'm curious, you did mention weather in the quarter. I don't know if it's possible to kind of quantify, excuse me, what you saw at Cheesecake Factory, because if I do the math correctly, it seems like comps might have been more in the low single-digit range H2 of the quarter, and I'm just curious if that's a weather-impacted dynamic, and if you think underlying trends are healthier than that. Hey, Sharon, it's Matt. You know, I would say just taking a step back maybe more 20,000 feet, just a year-over-year comp, what you said is factually true. We saw significant variability last year in sales. Sometimes, you know, with the reopening trends, they moved to levels that we, at that time, said were not sustainable given that, you know, there had been some pent-up demand and I think increased buying per capita in the restaurants. At other times, like in June and July, where the industry saw it really recede down because there was a significant case count. I think it is factually true, but it's a little bit of a, I think, narrow lens. When we look at performance versus historical seasonality, kind of pre-pandemic levels, 2018, 2019, the quarter was pretty consistent. On an absolute basis, we felt really good about the predictability. You know, we came in slightly above the midpoint of expectations for us. What I would say about the weather is that's probably what kept us maybe from being a little bit more towards the high end of our own expectations, right? Because a lot of that weather came in California, and it came in H2 of the quarter after our call, which obviously at that point in time had not been, you know, considered at all. I think we feel good about the stability and predictability that we did see. Thanks for that. On loyalty, when you launch that, is there going to be any kind of concerted marketing behind the launch of loyalty? You mentioned it exceeded expectations. I'm wondering, were the expectations sign-ups or was it also some sort of increased frequency or spend post-sign-up? Thanks. Hi, Sharon, this is David Gordon. To the second half of your question, it was increased our expectations around acquisitions and sales penetration, both. We're happy thus far, certainly with the acquisition side. As importantly, the actual use of the program, whether that was the use of the reservation component or some of the published offers that we had rolled out during the pilot time, both exceeded our expectations, which is why we feel good about a national launch coming up, hopefully here in June. As far as the marketing goes. Sorry. Marketing, yeah. Thank you. Yeah, as far as the marketing goes, we'll be doing some national, search engine optimization marketing and awareness marketing, along with some in-restaurant marketing as well for the launch. Okay, thank you. Your next question comes from the line of Joshua Long with Stephens. Your line is open. Great. Thank you for taking my question. Encouraged to hear the consistency in the model. You mentioned many times in your prepared comments about, you know, no real changes to consumer trends, consistent traffic, utilization across day part, all very, you know, encouraging given the challenging macro backdrop. Just curious, as you think about that and take into consideration, like, you know, your outlook for commodity inflation, labor inflation, how does that inform your outlook for pricing over the course of the year? You had started taking up prices in, you know, the back half of last year. I think you were running about 10% for this quarter. Just curious if your philosophy or outlook has changed as you've gotten a little bit more visibility into 2023. Josh, this is Matt. It's obviously, you know, a very pertinent question and area of focus and continues to be. You know, we'll be reading the tea leaves, so to speak, and all of the data, I think on a real-time basis. I think that was one of the big learnings actually from last year is that you need to be a little bit more nimble and agile and things happen. You know, so it depends, right? I guess is my point, if it stays the same or if it changes. It's not, I think, a static answer, it's more of a dynamic one. I think, you know, our perspective is that with the incremental pricing we took in December, we got close to the inflation over the sort of pandemic cycle, if you will. Still left us maybe 1% or 2% behind the industry, which is where we strive to be for competitive reasons. Certainly the cost environment, I think, has been a favorable outcome so far this year, and some of the underlying trends could continue to support improved performance in the back half of the year. You know, as always, we'd rather take less pricing. That would inform us if it continues to be that way. You know, our goal this year is to offset this year's inflation with this year's pricing. That, that math will continue to be, you know, a guiding factor as we go throughout the back half of the year. Very helpful. I appreciate that. One follow-up, if I can. In terms of the development outlook for the year, encouraged to see that. Can you talk about just the timing cadence and the ability to get stores opened up in the current environment? Within that, is the plan still to work towards bringing Flower Child into the fold? I think in prior calls, we've talked about just the kind of the progression of that relationship and probably bringing them and the brand into the fold from a infrastructure logistics development perspective and kind of what that could do for the brand going forward. Thank you. Thanks, Josh. This is David Gordon. We feel good, confident about those 20-22 openings throughout the year. The cadence will probably be that we'll open a few in Q2, a few more in Q3, and then the bulk of them will be in the fourth quarter. Sort of typical for the industry. Some of the supply chain challenges that were more pertinent last year, have subsided for the most part. We feel very prepared for that amount of openings. The permitting is getting a little bit easier over time, so we're pretty confident, in that number. Flower Child, we continue down the integration path this year. Our teams here at the office, along with all the FRC teams, are working through the plan that we constructed early on in the year, and we're on target to really be fully integrated by the end of the year, which was our goal at the onset. We would be then operating and opening all those restaurants, utilizing the power of Cheesecake Factory. Also all the supply chain components, IT components, all fully integrated along with most of the HR, which already has been. We did a lot of that work throughout the pandemic. Josh, this is Matt. Just one follow-up to the Flower Child point. I think it dovetails well with the financial performance. All along, our objective had been to prepare the brand for enhanced growth in conjunction with hitting the return hurdles on a consistent basis. The team at Flower Child has done an amazing job utilizing some of the scale benefits David was talking about, you know, improving some of the costs in the supply chain, making some investments to improve the efficiencies of the restaurants. You know, we look at that and it really marries well with the initiative that we have to enable that growth. Thank you. Your next question comes from the line of Brian Harbour with Morgan Stanley. Your line is open. Yeah, thank you. Good afternoon. Maybe just first, could you comment on the delivery business lately? You know, you're one of the few that, of course, still just has one delivery partner. Would it make sense at any point to consider adding other delivery partners? Hi, Brian. This is David Gordon. Thanks for the question. You know, our total off-premise still remains very stable and strong at 23%, as we stated earlier, for three quarters in a row now. Delivery has maintained 10% of that sales all throughout those quarters and remained incredibly consistent. We believe that we continue to execute incredibly well with DoorDash. They give us all the data analytics that we could possibly want. We have an ongoing relationship where we're meeting quarterly and going over performance metrics. Of course, we feel we have just a very strong deal structure when it comes to our commission and marketing support. We also would prefer to have, just for ease of execution and consistency of execution, one partner. The complexities of having two, three, four partners, in managing the incoming orders, which I know some others have moved to, is not somewhere that we need to go because of the consistent sales, and allows us to execute at a very high level, which I think allows us, again, to take market share, because the operators can do such a good job and part of the reason that we're still maintaining that 23% overall off-premise sales. Okay. Thank you. Maybe just a question on the cost side. you know, OpEx is something that's still kind of been higher, at least on a year-over-year basis. Matt, I know you kinda called out the calendar shift impact. Is there, you know, is there anything else you think that's kind of impacting that, whether it's repairs and maintenance, or, do you think that'll be kind of a greater source of leverage as we go through the rest of the year? Brian, this is Matt. That's a good question. Etienne and I have been talking about that line specifically, you know, because it does stand out as having a little bit more pressure for us. Really it comes down to two areas that I do think based on the absolute dollar trends we're seeing start to moderate. The first one is utilities. I know that we saw the nat gas market capitulate here, but the way that it rolls through, you know, all of the bills and the electric system, et cetera, does take a couple of months. Compared to last year, and even on a sort of quarter-to-quarter in Q1 did remain elevated, although we are starting to see that move and I do think that that will be a tailwind for us on a relative basis. As you said, R&M, is the other one. You know, it will be a sort of a dynamic year, as I said earlier, doing all of the comparisons because of the changes in the rate of inflation in different categories last year was so unprecedented. Really, that piece of it didn't start until Q2. I think again, on a comparable basis, we're gonna see some moderation of those expenses. Trailing into Q1 of the year definitely will be the highest inflationary component for us compared to the rest of the year. Okay, thank you. Your next question comes from the line of Brian Bittner with Oppenheimer. Your line is open. Thank you. Matt, question on the guidance. Is the same-store sales growth outlook still roughly 7% for the full year as kind of a building block within your 2023 revenue guidance? I ask that because it appears like you slightly tweaked the full year AUV targets. They were $13 million, now they're $12 and a half million to $13 million. Not sure if that implies a minor tweak to the same-store sales outlook as well. Hey, Brian, it's Matt. No, it's really the same. I mean, I think, I think we used the words nearly 13 before, so 12 and a half to 13, I mean, is, you know, I think it's more vernacular. It's just so on the outlook because at least in our perspective, and I think the facts speak to this, the comps are so funny on a year-over-year basis. I think a better way to think about our expectations is in taking Q1, looking at a little bit more of a long-term historical seasonal perspective and applying that going forward. Right? So we obviously model out a variety of different ways. We do the bottom up by restaurant, where we're looking at the individual restaurants and their local conditions. We do a top-down. In aggregate, it's really looking at the current conditions and saying, if things continue on a normalized basis, that gets us to the guide that we're providing. Okay. Thank you. Just my follow-up is on the margins. Last call, I think you pointed out that you anticipated second half commodity inflation to be in that roughly 4% range. I'm curious if that stays the same today. Have you seen any movements there? You also said that you anticipated restaurant margins to be somewhere in kind of the low 14% range to get you to that 4% net profit margin. Is that still a consistent way you're thinking about the margins? Brian. The second half, I think that's right. You know, it's kinda the mid-14s for the year. It will move a little bit up and down, right? If you did that same math, Q2 is gonna be a higher restaurant margin. It always is. Q3 lower and Q4, again, a little bit higher. On the commodities front, you know, our outlook really hasn't changed, right? If you think about we kept the net income at the same level. I mean, it does feel and look a little bit like things are getting better, but I think it's just too early to make a definitive call. You're seeing some progress in categories like eggs, obviously, you know, chicken remains decent, but you have some risk, I think, still in categories like ground beef, right? To us, I would just keep it there and if things get better, you know, that'll be good and maybe we'll take a little bit less pricing too, right? It kind of nets out against each other. I think the big picture message here is we executed to our plan in Q1, right? The environment has returned after really three black swan events in three years to where you can have a little bit more predictability. We have the best operators in the business. You know, we think that the environment, will enable us to execute in the back half of the year as well. Great. Thanks. Your next question comes from the line of Brian Vaccaro with Raymond James. Your line is open. Hi, thanks. Good evening. Matt, on The Cheesecake Factory comps, could you just run us through the traffic price and mix reflected in 1Q? I will, first I'll note that we just had three Brians in a row. It seems like a statistical anomaly. Anyway, Brian Vaccaro. Sure. For The Cheesecake Factory, pricing was a little bit over 10%. Traffic was a positive 1%. Mix was a negative 5.7%. Of the mix piece, just keep in mind, about half of that is just the way that we account, right, as everybody knows, for the to-go business. It was, you know, traffic was basically flattish year-over-year in an aggregate basis. That's, that's great. I was gonna ask you about mix specifically. Is it, is it possible to help parse that out between, like, set aside the channel mix dynamics and try to isolate dine-in mix, and if you're seeing any changes specifically within the dine-in mix? Sure. Of that, about half of it is the whole channel deal. The other piece I would say is attributable to the dine-in, predominantly because in last year's February and March consumer behaviors, we just saw some outsized purchasing behavior. This is right in line with our expectations. I think as David Gordon noted earlier, all of our incident rates and purchasing behaviors per person remain measurably above the 2019 levels. We do expect to see some bumpiness during the year, depending on what was happening in sort of the COVID trend. It's about 50/50 in Q1 with respect to those two components. All right. Thank you for that. I wanted to shift back to labor if we could. I think you said lower medical benefits. I think that's what you called out in Q1. Could you quantify that for us? I also maybe more importantly, I heard your comments about improved staffing and lower attrition. I know last year there was a lot of pressure from outside hiring, training, and overtime costs. Any way to ballpark how much lower those costs were here in Q1? Yeah. The group medical was better. I would tell you it wasn't a huge driver of the labor piece. I mean, it may be of $1 million, you know. I think that the biggest factors are around getting the attrition levels back to pre-pandemic or close to it. I mean, it was a significant move from the teams that did measurably help to lower training overtime and just general productivity. You know, I don't have a specific number, but really the entire difference I would attribute to sort of efficiency of labor, you know, net of that just that $1 million of group medical. Okay. Last one, if I could just squeeze it in. Just on The Cheesecake Factory segment margins, Matt. I ran the quick math on Q1, it looks like the segment was still down about 90 basis points maybe versus Q1 of 2019. I know you took more pricing in February, but has that allowed cheesecake margins to get back to pre-COVID levels, maybe more in more recent months? If not, maybe just remind us what's the bridge towards fully recovering those margins in 2023. Thank you. Yes. Your math is correct. You know, that's correct. We took a little bit higher than average pricing again in Q1. Keep in mind that as we noted, not just with the other OpEx, but the commodity inflation ran in the low double digits, right? We expect it to not quite be there in Q1. I think the where we're at now with all of these pieces will enable us to be in the ballpark of where we want to be. There are a lot of variables that can change during that, right? Sales levels, commodities can change, et cetera. I think we're enabled to at least to be within striking distance for the back 3 quarters of the year. Thanks very much. I'll pass it along. Your next question comes from the line of Drew North with Baird. Your line is open. Great. Thanks. A lot of my questions have been asked already, but I'll follow up on unit development. It seems as though construction and permitting continues to be a challenge. I guess my question is just your level of confidence of getting those 20-22 openings this year. While recognizing you may not be looking to give specific guidance, wondering if you could just speak directionally about how the development pipeline is shaping up for next year. If there's anything you're seeing from a build cost or real estate availability perspective that would make you look at the year differently than your longer term algorithm. Thanks. Hi, Drew. This is David Gordon. We feel very confident about that 20-22 number for this year. As we stated previously, 7% overall unit growth is still something that we have great confidence in. As we look towards next year, would still remain confident that that 7% unit growth number is attainable and a target that we'll be working towards. We, as I said a little bit earlier, have not seen the same type of pressures on the supply chain and the permitting side. Things seem to be continuing to get a little bit easier as every month goes by, which is why we have that confidence in this year. Drew, this is Matt. Just one on the financial piece. We as along with everybody else, have definitely seen CapEx inflation. For the most part, it's been kind of paralleled by the unit volume expansion with the pricing. I think that in aggregate, it really depends on the geography, but in aggregate, we are hitting the return levels that we need to keep pace with our long-term expectations of 7% unit growth. Thanks for the color. Your next question comes from the line of John Ivankoe with JP Morgan. Your line is open. Hi. Thank you. You know, I know there's obviously been a lot of comments around comps and the difficulty of kind of reading an accurate year-over-year, I was hoping, you know, in Q2 of 2023, it would be relatively normal versus Q2 of 2022. I just wanted to see exactly what comp guidance, you know, if I missed this, I really apologize. What comp guidance that you were inferring for Q2 of 2023. To us, it looks, you know, something like, you know, flat or maybe low single digit positive. On that basis, you know, to clarify that. On that basis, it looks like, you know, traffic year-over-year is still pretty meaningfully down, you know, Q2 2023 versus 2022. If that is the case, you know, where you are seeing pockets of customer weakness, who is the customer that is coming less to you year-over-year and, you know, is it, is it a geography type of store, type of customer, you know, is it in certain day parts? If you could just elaborate on that'd be helpful. Thank you. Sure, John, this is Matt. The first thing just to kind of, to clarify is, you know, we're not giving specific year-over-year comps, we're just providing an aggregate revenue. The framework is essentially looking at where we were in Q1, more particularly around historical seasonality and applying that to Q2 and the full year. The reason is when we actually look at the comps for Q2 last year, they were pretty distorted. In April specifically, I mean compared to, say, July, there was about a 10% delta in the comp, right? I mean that's a huge difference. I think you're gonna continue to see... I think that was reflected really if you look at Black Box and Knapp-Track, I mean, we tend to outperform, but we tend to follow the curve. I mean, our opinion is that, based on our specific performance, we're gonna continue to see some of that bumpiness, and it's not normal on a year-over-year basis. Really kind of looking at Q1, as I noted, our traffic was pretty close to flat. You know, in the aggregate, that feels good. I think mathematically, you're right, that what we're modeling out is probably a little bit of negative traffic in Q2. I think that's pretty consistent with all of the reports that I've heard. It's not really specific in general. I think that's really just a comparison issue more so than an absolute sales pattern. I think the one thing that, you know, we've said this before and it does continue to be true, the very urban locations are probably the areas with the most opportunity still. Generally, we see pretty consistent performance across our day parts and across our geographies. We used to talk about, you know, years ago of, you know, kind of, you know, when weakness would ever show up in a comp, it would be on the shoulders, middle of the afternoon, late at night, you know, Monday through Wednesday, you know, that type of thing. Are those type of historical patterns coming back and maybe that's what's making 2023 versus 2022 still look unusual? No, I don't think so. I mean, I, you know, I was just looking at our stat pack today and, I mean, all of the day parts line up pretty consistently, within 0.5% of the mix of the total for each category. I really think, you know, if we go back and we look at the percentage movements by month last year, there was just a lot of variability. It was just very big changes between February to March to April, and then, you know, through to July, it was just very big movement. I understand. Thanks for the time. Your next question comes from the line of Jeffrey Bernstein with Barclays. Your line is open. Great. Thank you very much. Two questions. The first one just on the outlook as we think about a potentially slowing macro. I'm just wondering where you'd say your confidence is greater, whether it be maintaining the sales momentum with the leverage you potentially have, or perhaps the margin gains that you've recaptured. I'm just wondering where you feel like you'd be better positioned to hold on to, if trends were to slow as we move through the year. I had one follow-up. Yeah, Jeff, that's a really good question. I think it's very pertinent. This is Matt. You know, I mean, ultimately, you know, our objective is always twofold, right? You wanna try to protect or in our case, recapture margins and you wanna protect traffic. I think big picture, if we can have a more normalized situation this year, you know, whether we are at $3.5 billion or $3.6 billion, if we accomplish the margin objective and then we grow off of that base, we're gonna be in a really good spot, right? I mean, it'll be a strong earnings and cash flow positions. To that end, based on what we're seeing today with the underlying labor market and the commodities piece, it certainly feels like the margin profile winds up a little bit better than what we saw kind of coming out of the financial crisis, you know, compared to the sales piece, right? The ability for strong operating companies like ourselves to execute on that and to produce the bottom line that we're targeting, feels like the environment is set up a little bit better for that side of the equation. Understood. Just following up on that margin comment, and I think earlier you said you guys are kind of keen to get back to a certain restaurant margin. I think you said the mid-14s, for the portfolio in 2023. It seems like your strategy would be to price to do so. Whatever would be necessary to get there, like you just said, I guess you're keen to get back to a certain margin. Is there any concern that around new pricing with the, you know, limitation being that food at home now falling below food away from home and maybe a slowing macro, that you'd be hesitant to take that incremental price and therefore let the margin be below to hopefully preserve some traffic? Is that really the bottom line that you are keen to price to hit a certain margin? Thank you. Well, I think again, this is Matt. It's always both, right? You know, and we try not to prioritize too much one over the other. I think at this point, we've taken the pricing that we needed to do that. Right. Now it's about providing absolute guest satisfaction and making sure that it's worth it. You know, Yeah, I think because of the unprecedented level of inflation and the curves that we saw, it gets a little bit tricky to think about year-over-year at any point in time, you know, versus kind of looking period to period or quarter-to-quarter. You know, now we may be lapping, I think, some of the rapid grocery store inflation, but those prices haven't come down, right? They're just less inflationary. If you stack it over time, we have priced less than the grocery stores have still to this day, right? I think we're in a good position. You know, I think we're poised to continue to strive to hit that margin target. If commodity is a little bit less, it will allow us to take a little bit less pricing. But I think we're balancing it pretty well right now. Understood. The pricing you've taken most recently allows you to hit what I think you previously projected, which would be 10% of the cheesecake in the first half, and then easing to 6% and 5% in Q3 and Q4, respectively. Is that what we should be modeling? I think that's close. I think it might be 7% and 6% or something like that, but you're within 1%. Yes, we've already taken that. Thank you. Your next question comes from the line of Jon Tower with Citi. Your line is open. Great. Thanks for taking the question. Curious if you could dig into the loyalty program a little bit. Curious if you could shed light on how we should think about it from the way it's structured. Is it gonna be a spend-based program, a frequency-based program? What sort of rewards can consumers expect? You know, aside from driving frequency and some incremental spend, what else are you looking to gain from this? Hi, John. This is David Gordon. Thanks for the question. I think there's really 3 components to the program. The first will be published offers, right? Which would be things like access to reservations, complimentary slice of cheesecake on a member's birthday, those type of activities to support, you know, acquisition and just ongoing engagement. We would be have unpublished offers that will be given throughout the year. Those are really designed to drive, as you mentioned, those incremental visits, and then some key marketable moments. That may be something around our what we used to be our traditional Trick or Treat promotion around Halloween or National Cheesecake Day. The program will be designed to be unique. It won't be a points-based program, it won't be a spend-based program, more of a surprise and delight. We do know that access to reservations is an important component for people at The Cheesecake Factory. We've historically been known for our long waits, and we think that's a benefit that will certainly drive acquisition. We've seen so far a very good usage of something that it doesn't cost us anything on the margin side to be offering reservations to folks. That's all along our goal is to not have this program impact restaurant-level margins. Thus far, that's what we're seeing. We'll be doing it in the unique Cheesecake Factory fashion and the way we do most things. Hopefully, we'll be gathering enough data to be able to market specifically to guests to drive, perhaps, different time periods. If you only come in for lunch, we can talk to you and make sure that we offer you something in one of those marketable moments around dinner, et cetera. We're excited to get started in June and use that data in a, in a way that we haven't been able to before, since we never had a traditional CRM program. Got it. To think about it from a high level in terms of spend, it doesn't sound like it'll be super costly, but would this be additive to the current marketing spend that you have, which is fairly low relative to the peer set? Our goal would be able to keep it within the marketing spend and continue to be relatively low to the peer set. Yes. Got it. Okay. Just shifting to development. Just thinking about this year, it seems pretty back half weighted. I think you said 80% of growth coming in the second half of the year. When looking beyond this year, and I'm not asking for guidance per se on numbers, but, you know, are we gonna get back to a more normalized cadence of openings in 2024 and 2025 to the extent you guys can shed some light on that? I think we can always hope that that's gonna be the case, but for the past 25 years, the pretty typical cadence has been the back half of the year. I wouldn't expect it to be that much different. Who knows? You know, our pipeline, I think, is strong. We'd love to be able to shift some forward, but as we have more color around that, we'll certainly share that with you. Got it. Thanks for taking the questions. Your next question comes from the line of Jim Sanderson with Northcoast Research. Your line is open. Hey, thanks for the question. Just wanted to review briefly, store count and unit growth goals. I think that, compared to fourth quarter, I didn't see a lot of real net unit growth. Wanted to make sure I understood how the 20-22 new stores will flow into actual net growth by quarter. Jim, this is Matt. It's a good question. We actually had 2 closures in Q1, that's why it would look like it didn't net. We obviously on an annual basis review the portfolio and base decisions like that on timing of leases and cash flow outlook. It was just a sort of a normal trimming, it usually happens at that time of year. We're targeting the 20-22 new openings, but we did have the two closures that would on a total basis net against that. I think as David Gordon noted, it's a couple in Q2, 2-3 in the third, something like that is what we're thinking, and then the balance would be in the fourth quarter. Okay. The bulk of that will still be incremental to. Yeah ... to disclosure. Yeah. Correct. Very good. second question if I could. just wanted to make sure I understood the commentary on the flattish% of sales for G&A. Is that expectation baked into your Q2 guidance? Meaning I think there was a dip down in G&A as a% of sales last year. Is that going to take place in Q2? Is that typical? Yeah. That's really more about the leverage of the sales. The Q2 tends to be a little bit of the peak of a average weekly sales. It's not so much that the dollar spend changes, but you get just a little bit of leverage. It should flow kind of similarly based on that. All right. Thank you very much. Your next question comes from the line of Lauren Silberman with Credit Suisse. Your line is open. Thank you for the question. I understand there's noise across channels, but with looking at on-premise traffic, can you talk about where you're running relative to 2019 and presumably on-premise traffic's not fully back to pre-COVID? Any color in terms of which day parts or days might be running below or are back to pre-COVID? Sure, Lauren. This is Matt. You know, it's been really consistent. That again, that is true. We've sort of been in that 85%-87% level of on premise traffic for a while. It's almost identical to where we were in the fourth quarter is where we were in Q1. It's really not differentiated much based on day of week or day part. It just seems to be kind of peanut buttered across that for lack of a more technical term. Okay, thanks. I just have another one on loyalty. It seems like the loyalty is targeted at dine-in occasions. Is that fair? Is there any component to drive and potentially reward both on-premise and off-premise? Sure, Lauren. This is David Gordon. It's actually both. We'd love to continue to drive dine-in traffic. Throughout the pilot period, we did test some marketing and promotions specifically around online ordering, and we've been working with DoorDash to be able to integrate rewards members into the DoorDash platform, which will allow us to make offers available to DoorDash members as well. Great. Just the final one, a follow-up on the mix trends you spoke about. Is there any sense of how we can think about when that starts to expect to normalize? I guess you guys have a better sense of the lapping of when attachment rates started to peak. Well, we've had three quarters in a row, Lauren, and this is Matt, of 23% off-premise. As a percentage, it, you know, it seems like it's kind of been consistently in that range, and the average weekly sales seem to be growing at the same pace as pricing. If, you know, I think plus or minus 1% based on seasonality, you know, we do tend to see that, you know, the middle of the year months are a little bit less as a percentage. I think that's just based on consumer behavior and something that the whole industry sees. Sort of in that ballpark seems to be the stride that we've been in for almost 1 year now. Great. Thank you very much. Your final question today comes from the line of Dennis Geiger with UBS. Your line is open. Thank you. I wanted to ask one more on underlying sales trends. I know you mentioned, Matt, some choppiness in the year ago period. Could you speak at all to sort of the recent months, to Q to date sales if you compared it versus 2019, presumably that could take out some of the 2022 noise if that's a fair way to think about it? Sure. Again, you know, I think for us, the way that we built up our forecast is based on looking at that, you know, sort of 2018 and 2019 seasonality perspective and applying that to the Q2 and balance of the year outlook. We've seen, you know, very steady sales in Q1 of the year. We feel good that the predictability of the business has enabled us to give, you know, good perspective on Q2. Great. Thanks, Matt. Thank you. This concludes today's conference call. Thank you very much for attending. You may now disconnect.