The Cheesecake Factory Q4 2008 Earnings Call Transcript

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2009-02-12 19:40:19.0

Tags: Call Transcript, Earnings, Morgan Stanley, Recruitment & Selection, Real Estate, Human Resources, Workforce Management, Business Operations, Seeking Alpha, Cheesecake Factory Inc.

Question-and-Answer Session

Operator

(Operator Instructions). And our first question comes from the line of John Glass with Morgan Stanley. Go ahead.

John Glass - Morgan Stanley

Thanks. Thanks very much. My question has to do with the growth infrastructure in the company, and related to that Doug, what's your view is on the company going forward as you look at with fresh eyes.

So in 2008, I presume you have cut some of the growth infrastructure, real estate, some of the extra managers you had in training, but over what period in other words when are we going start to lap some of those reductions is it you assume there maybe year-over-year benefit in the first half of the year, I presume.

And then like as you look at the company from a fresh or other opportunities you immediately see to change the way things that have been done that would also maybe cut costs or preserve margins in some way?

Doug Benn

Yes. This is my fourth week on the job, and I've had lots of opportunities to look at things, and this company has done a pretty good job so far, I think in both controlling their costs, and in focusing on things that they can be controlled. With respect to infrastructure, we, for instance, recently we just streamlined our cost structure a little bit more to remove another $4 million to $5 million in costs on an annualized basis, which we reflected in our guidance.

For example, part one of these types of costs is because of the reduced opening schedule that we have planned. We have reduced the number of managers in our pipeline, or our bench, if you will, to run new restaurants. So, I think that I have not had the full opportunity to go through all of the cost structure changes that could be made, but the company has been very proactive with that already.

John Glass - Morgan Stanley

Thank you.

Doug Benn

You're welcome.

Operator

Our next question comes from the line of Steven Kron with Goldman Sachs. Go ahead.

Steven Kron - Goldman Sachs

Great. Thanks. Good afternoon. A question on the three stores where you took a non-cash write down. Can you just give us a little bit more color as to maybe commonalities within those stores? Where they may be located? You mentioned in the release that you are going to keep them open and work on productivity measures. Can you maybe drill down specifically what you are planning on doing?

 

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