We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Cheesecake Factory (CAKE) Up 6.6% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Cheesecake Factory (CAKE - Free Report) . Shares have added about 6.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cheesecake Factory due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cheesecake Factory 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.
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 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Cheesecake Factory has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Cheesecake Factory has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Cheesecake Factory belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, McDonald's (MCD - Free Report) , has gained 7.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
McDonald's reported revenues of $6.49 billion in the last reported quarter, representing a year-over-year change of -0.1%. EPS of $2.97 for the same period compares with $3.17 a year ago.
For the current quarter, McDonald's is expected to post earnings of $3.15 per share, indicating a change of -1.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.9% over the last 30 days.
McDonald's has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Cheesecake Factory (CAKE) Up 6.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Cheesecake Factory (CAKE - Free Report) . Shares have added about 6.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cheesecake Factory due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cheesecake Factory Q2 Earnings Beat Estimates, Rise Y/Y
Cheesecake Factory 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.
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 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Cheesecake Factory has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Cheesecake Factory has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Cheesecake Factory belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, McDonald's (MCD - Free Report) , has gained 7.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
McDonald's reported revenues of $6.49 billion in the last reported quarter, representing a year-over-year change of -0.1%. EPS of $2.97 for the same period compares with $3.17 a year ago.
For the current quarter, McDonald's is expected to post earnings of $3.15 per share, indicating a change of -1.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.9% over the last 30 days.
McDonald's has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.