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The Cheesecake Factory Incorporated (CAKE - Free Report) reported second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased from the prior-year quarter’s figure.
During the quarter, CAKE stated benefits from strong demand and sales performance of new restaurant openings. Also, improvements in food efficiencies, labor productivity, overtime and wage management enhanced restaurant-level profitability. The company emphasizes strengthening its operational service to drive long-term growth.
Earnings & Revenue Discussion
In the quarter under review, the company reported adjusted earnings per share (EPS) of $1.09, beating the Zacks Consensus Estimate of $1 by 9%. In the year-ago period, the company reported adjusted EPS of 88 cents.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
Quarterly revenues of $904 million missed the consensus estimate of $907 million by 0.4%. The top line increased 4.4% on a year-over-year basis.
Q2 Comps
In the reported quarter, comps at Cheesecake Factory restaurants inched up 1.4% year over year compared with 1.5% rise reported in the prior-year quarter. We projected comps to decline 0.4% year over year.
North Italia comps rose 2% year over year compared with 8% growth reported in the year-ago quarter. Our model suggested the metric to rise 4% year over year.
Costs in Detail
The cost of food and beverage, as a percentage of revenues, contracted 90 basis points (bps) year over year to 22.3% in the fiscal first quarter. We expected the metric to be 22.6% of revenues in the quarter.
Labor expenses, as a percentage of total revenues, amounted to 35.1%, down 20 bps year over year. We expected the metric to be 35.4% of revenues in the quarter.
Other operating costs, as a percentage of total revenues, were 26.4%, up 20 bps from the prior-year quarter’s level. In the quarter, we anticipated the metric to be 26% of revenues.
General and administrative expenses accounted for 6% of revenues, down 40 bps year over year. Our model predicted the metric to be 6.4% of revenues in the fiscal second quarter.
In the fiscal second quarter, pre-opening expenses accounted for 0.8% of revenues, up 10 bps year over year.
Balance Sheet
As of Jul 2, 2024, Cheesecake Factory’s cash and cash equivalents totaled $40.7 million compared with $56.3 million as of Jan 2, 2024. Long-term debt (net of issuance costs) was $471.1 million compared with $470 million as of Jan 2, 2024. As of Jul 2, the company had a total available liquidity of $277.2 million compared with $296.7 million reported in the previous quarter.
Management declared a quarterly cash dividend of 27 cents per share. The dividend will be payable on Aug 27 to shareholders of record as of Aug 14, 2024. In the fiscal second quarter, CAKE repurchased approximately 111,400 shares for $3.9 million.
Store Developments
In the quarter under review, the company opened five new restaurants. The openings included one Cheesecake Factory, one North Italia restaurant, two Flower Child locations and one Culinary Dropout.
Internationally, the company opened a Cheesecake Factory restaurant under licensing agreements in China. Subsequent to the quarter-end, the company opened a Blanco location in Southern California.
In the fiscal 2024, the management expects to open 22 new restaurants. This includes three Cheesecake factories, six to seven North Italia's, six to seven Flower Child and seven to eight FRC restaurants.
Starbucks Corporation (SBUX - Free Report) reported mixed third-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate, but revenues missing the same. The top and the bottom line declined on a year-over-year basis. The downside can be attributed to the competitive market dynamics in China, macro challenges, and price wars.
In the fiscal third quarter, the company reported adjusted EPS of 93 cents, in line with the Zacks Consensus Estimate. The bottom line declined 7% year over year from $1.00. Quarterly revenues of $9,113.9 million missed the Zacks Consensus Estimate of $9,224 million. The top line dropped 0.6% on a year-over-year basis due to dismal international revenues. Global comparable store sales declined 3% year over year. The downside was backed by a decline of 5% in comparable transactions, partially overshadowed by a 2% increase in average tickets.
Chipotle Mexican Grill, Inc. (CMG - Free Report) released impressive second-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. During the quarter, the company benefited from successful promotions regarding Chicken Al Pastor driving significant engagement and sales. Also, the emphasis on throughput and staff training proved effective in meeting heightened demand and supported transaction growth.
During the second quarter, CMG reported adjusted EPS of 34 cents, outpacing the Zacks Consensus Estimate of 31 cents. The bottom line increased 36% from 25 cents reported in the year-ago quarter. Quarterly revenues of $2.97 billion surpassed the consensus mark of $2.94 billion by 1.3%. The top line rose 18.2% on a year-over-year basis. The upside was driven by strong comparable restaurant sales growth backed by increased transactions (8.7%) and average checks (2.4%).
McDonald's Corporation (MCD - Free Report) reported drab second-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The top and bottom lines decreased on a year-over-year basis. The dismal performance was caused by a pressured industry landscape and the war in the Middle East.
During the second quarter, McDonald's reported adjusted EPS of $2.97, missing the Zacks Consensus Estimate of $3.08. Moreover, adjusted earnings decreased 6% year over year. Quarterly net revenues of $6,490 million lagged the consensus mark of $6,651 million. The top line declined 0.1% year over year. Global comps declined 1% against 11.7% growth in the prior-year quarter.
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Cheesecake Factory (CAKE) Q2 Earnings Beat Estimates, Rise Y/Y
The Cheesecake Factory Incorporated (CAKE - Free Report) reported second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased from the prior-year quarter’s figure.
During the quarter, CAKE stated benefits from strong demand and sales performance of new restaurant openings. Also, improvements in food efficiencies, labor productivity, overtime and wage management enhanced restaurant-level profitability. The company emphasizes strengthening its operational service to drive long-term growth.
Earnings & Revenue Discussion
In the quarter under review, the company reported adjusted earnings per share (EPS) of $1.09, beating the Zacks Consensus Estimate of $1 by 9%. In the year-ago period, the company reported adjusted EPS of 88 cents.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
The Cheesecake Factory Incorporated price-consensus-eps-surprise-chart | The Cheesecake Factory Incorporated Quote
Quarterly revenues of $904 million missed the consensus estimate of $907 million by 0.4%. The top line increased 4.4% on a year-over-year basis.
Q2 Comps
In the reported quarter, comps at Cheesecake Factory restaurants inched up 1.4% year over year compared with 1.5% rise reported in the prior-year quarter. We projected comps to decline 0.4% year over year.
North Italia comps rose 2% year over year compared with 8% growth reported in the year-ago quarter. Our model suggested the metric to rise 4% year over year.
Costs in Detail
The cost of food and beverage, as a percentage of revenues, contracted 90 basis points (bps) year over year to 22.3% in the fiscal first quarter. We expected the metric to be 22.6% of revenues in the quarter.
Labor expenses, as a percentage of total revenues, amounted to 35.1%, down 20 bps year over year. We expected the metric to be 35.4% of revenues in the quarter.
Other operating costs, as a percentage of total revenues, were 26.4%, up 20 bps from the prior-year quarter’s level. In the quarter, we anticipated the metric to be 26% of revenues.
General and administrative expenses accounted for 6% of revenues, down 40 bps year over year. Our model predicted the metric to be 6.4% of revenues in the fiscal second quarter.
In the fiscal second quarter, pre-opening expenses accounted for 0.8% of revenues, up 10 bps year over year.
Balance Sheet
As of Jul 2, 2024, Cheesecake Factory’s cash and cash equivalents totaled $40.7 million compared with $56.3 million as of Jan 2, 2024. Long-term debt (net of issuance costs) was $471.1 million compared with $470 million as of Jan 2, 2024. As of Jul 2, the company had a total available liquidity of $277.2 million compared with $296.7 million reported in the previous quarter.
Management declared a quarterly cash dividend of 27 cents per share. The dividend will be payable on Aug 27 to shareholders of record as of Aug 14, 2024. In the fiscal second quarter, CAKE repurchased approximately 111,400 shares for $3.9 million.
Store Developments
In the quarter under review, the company opened five new restaurants. The openings included one Cheesecake Factory, one North Italia restaurant, two Flower Child locations and one Culinary Dropout.
Internationally, the company opened a Cheesecake Factory restaurant under licensing agreements in China. Subsequent to the quarter-end, the company opened a Blanco location in Southern California.
In the fiscal 2024, the management expects to open 22 new restaurants. This includes three Cheesecake factories, six to seven North Italia's, six to seven Flower Child and seven to eight FRC restaurants.
Zacks Rank
Cheesecake Factory currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
Starbucks Corporation (SBUX - Free Report) reported mixed third-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate, but revenues missing the same. The top and the bottom line declined on a year-over-year basis. The downside can be attributed to the competitive market dynamics in China, macro challenges, and price wars.
In the fiscal third quarter, the company reported adjusted EPS of 93 cents, in line with the Zacks Consensus Estimate. The bottom line declined 7% year over year from $1.00. Quarterly revenues of $9,113.9 million missed the Zacks Consensus Estimate of $9,224 million. The top line dropped 0.6% on a year-over-year basis due to dismal international revenues. Global comparable store sales declined 3% year over year. The downside was backed by a decline of 5% in comparable transactions, partially overshadowed by a 2% increase in average tickets.
Chipotle Mexican Grill, Inc. (CMG - Free Report) released impressive second-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. During the quarter, the company benefited from successful promotions regarding Chicken Al Pastor driving significant engagement and sales. Also, the emphasis on throughput and staff training proved effective in meeting heightened demand and supported transaction growth.
During the second quarter, CMG reported adjusted EPS of 34 cents, outpacing the Zacks Consensus Estimate of 31 cents. The bottom line increased 36% from 25 cents reported in the year-ago quarter. Quarterly revenues of $2.97 billion surpassed the consensus mark of $2.94 billion by 1.3%. The top line rose 18.2% on a year-over-year basis. The upside was driven by strong comparable restaurant sales growth backed by increased transactions (8.7%) and average checks (2.4%).
McDonald's Corporation (MCD - Free Report) reported drab second-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The top and bottom lines decreased on a year-over-year basis. The dismal performance was caused by a pressured industry landscape and the war in the Middle East.
During the second quarter, McDonald's reported adjusted EPS of $2.97, missing the Zacks Consensus Estimate of $3.08. Moreover, adjusted earnings decreased 6% year over year. Quarterly net revenues of $6,490 million lagged the consensus mark of $6,651 million. The top line declined 0.1% year over year. Global comps declined 1% against 11.7% growth in the prior-year quarter.