The Cheesecake Factory Incorporated (CAKE) Q4 2011 Earnings Call February 21, 2012 5:00 pm ET Executives Jill S. Peters - Vice President of Investor Relations W. Douglas Benn - Chief Financial Officer and Executive Vice President Analysts Joseph T. Buckley - BofA Merrill Lynch, Research Division John S. Glass - Morgan Stanley, Research Division Matthew J. DiFrisco - Oppenheimer & Co. Inc., Research Division Matthew J. DiFrisco - Lazard Capital Markets LLC, Research Division Alexandra Chan - Jefferies & Company, Inc., Research Division Nicole Miller Regan - Piper Jaffray Companies, Research Division Michael Kelter - Goldman Sachs Group Inc., Research Division Sharon Zackfia - William Blair & Company L.L.C., Research Division Will Slabaugh - Stephens Inc., Research Division Bryan C. Elliott - Raymond James & Associates, Inc., Research Division Mitchell J. Speiser - Buckingham Research Group Incorporated Jeffrey Andrew Bernstein - Barclays Capital, Research Division Karen Holthouse - Crédit Suisse AG, Research Division John W. Ivankoe - JP Morgan Chase & Co, Research Division Jonathan R. Komp - Robert W. Baird & Co. Incorporated, Research Division John Dravenstott - KeyBanc Capital Markets Inc., Research Division Greg Margolis Conrad Lyon - B. Riley & Co., LLC, Research Division Presentation Operator .
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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. We'll start of the call today with some opening remarks and then take you through our operating results in detail. Following that, we'll discuss our outlook for the first quarter of 2012 as well as the full year and then open the call to questions. Now I'll turn the call over to Doug.W. Douglas Benn Thank you, Jill. The fourth quarter marked our highest comparable sales and guest traffic levels of the year with The Cheesecake Factory and Grand Lux Café both solidly positive. We've now had 2 straight years of positive quarterly comparable sales. Each of our markets delivered positive comparable sales demonstrating the strength of our brand. Consumers have many choices when it comes to dining out. Our guest counts rose solidly during the fourth quarter, one more measure that tells us we're doing many things very well for our guests. Our operators continue to demonstrate their leadership in the industry, resulting in high guest satisfaction scores, and at the same time, a disciplined focus on margins. Over the past 3 years, our guest satisfaction scores increased by 20%, which is significant given that our base level score was already pretty high. This improvement in guest satisfaction is clearly a key driver of our growth in guest traffic over the last 8 quarters. We saw our highest profitability levels of the year in the fourth quarter with an 8.3% operating margin. Our long-standing goal is to recapture peak operating margins and deliver mid-teens earnings per share growth. And our performance this quarter illustrates our ability to effectively turn higher comparable sales into profit. The latest example of our continued leadership in menu innovation is our SkinnyLicious menu. Without getting into too many details, I will tell you that guests love the new menu and they love having more options. In Cheesecake Factory style, the flavors are big, the dishes are what people want to eat, the portions are generous and the items are priced to generate full margins.
As to development, we expect to open as many as 7 to 8 new restaurants in the United States this year, including a new Grand Lux Café. Our first opening of the year is scheduled for next month in Salt Lake City, Utah. We've tightened the range of our new unit openings as we know that some of our opening dates have shifted out a little bit. Our desire to expand and our capabilities to do so haven't changed. We continue to be selective about choosing sites and taking the appropriate business risks to ensure we can hit our required returns.In addition to our domestic expansion, we're also expecting that as many as 3 new restaurants will open in the Middle East this year under a license agreement. We're also continuing to explore other international opportunities. We're in active dialogue with potential partners to further assess the market for our concept outside the United States as well as build relationships with established multi-brand operators in other countries. Our performance continues to be in line with our longer-term objectives for growth. We are moving down the path to becoming a global brand and are confident in our ability to continue to expand The Cheesecake Factory and to deliver on our earnings growth targets. Read the rest of this transcript for free on seekingalpha.com