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) Down 51.5% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Cheesecake Factory (CAKE - Free Report) . Shares have lost about 51.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cheesecake Factory due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cheesecake Factory Q4 Earnings Lag Estimates, Fall Y/Y
The Cheesecake Factory reported fourth-quarter fiscal 2019 results wherein both earnings and revenues missed the Zacks Consensus Estimate. Following lower-than-expected results, shares of the company declined 3.4% in after-hours trading on Feb 19.
In the quarter under review, adjusted earnings came in at 58 cents per share, lagging the Zacks Consensus Estimate of 61 cents. Moreover, the bottom line dipped 7.9% from the prior-year number. This downside was primarily attributed to higher operating and acquisition-related costs.
Let’s take a closer look at the numbers.
Detailed Revenue Discussion
Total revenues of $694 million in the reported quarter missed the Zacks Consensus Estimate of $704 million. However, the top line improved 18.6% year over year on the back of increased comparable sales.
Comps at Cheesecake Factory restaurants slipped to 0.6% growth from the 1.9% rise in the year-ago quarter.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
The Cheesecake Factory Incorporated Price, Consensus and EPS SurpriseThe Cheesecake Factory Incorporated price-consensus-eps-surprise-chart | The Cheesecake Factory Incorporated Quote
Costs in Detail
Cost of sales ratio decreased 20 bps year over year to 22.8% in the fourth quarter. Meanwhile, the labor expense ratio was 36.2%, up 40 bps from the year-ago quarter.
Other operating costs represented 26% of revenues, up 200 bps from the year-ago quarter. General and administrative (G&A) expenses accounted for 6.8% of revenues, up 50 bps from the prior-year quarter. However, in the fourth quarter, pre-opening expenses were flat at 0.9% year over year.
Balance Sheet
As of Dec 31, 2019, Cheesecake Factory’s cash and cash equivalents totaled $65.4 million compared with $26.6 million as of Jan 1, 2019. In the fiscal fourth quarter, the company repurchased approximately 10,000 shares of its common stock for $0.4 million. In 2019, Cheesecake Factory bought back 1.1 million shares of common stock for $51 million.
The company’s board of directors declared a quarterly cash dividend of 36 cents per share of the common stock. The new dividend is payable Mar 20, 2020 to its shareholders of record at the close of business on Mar 9, 2020.
Developmental Details
In fiscal 2020, Cheesecake Factory anticipates opening 20 new restaurants including six Cheesecake Factory locations, six North Italia restaurants and eight restaurants within the FRC subsidiary. It also expects to launch four Cheesecake Factory restaurants internationally under licensing agreements
2019 Highlights
Total revenues of $ 2,482.7 million were up 6.4% year over year. Adjusted earnings per share (EPS) for the year ended Dec 31, 2019 was reported at $2.61 compared with $2.51 as on Jan 1, 2019. In fiscal 2019, Comps at Cheesecake Factory restaurants slid to 0.8% rise from growth of 1.7% a year ago.
Q1 Outlook
For the first quarter, adjusted EPS is estimated to be 69-74 cents based on anticipated comps growth of 1-2% at Cheesecake Factory restaurants. Total revenues for The Cheesecake Factory restaurants are estimated in the range of $715-$720 million.
Fiscal 2020 Guidance
For the fiscal 2020, Cheesecake Factory expects earnings of $2.70-$2.86 per share. Its mid-point of $2.78 is above the current Zacks Consensus Estimate of $2.73. Meanwhile, the company expects comps to grow in the range of 1-2%. Total revenues for fiscal 2020 are estimated at $2.9 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 15.15% due to these changes.
VGM Scores
At this time, Cheesecake Factory has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Cheesecake Factory has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Cheesecake Factory (CAKE) Down 51.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Cheesecake Factory (CAKE - Free Report) . Shares have lost about 51.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cheesecake Factory due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cheesecake Factory Q4 Earnings Lag Estimates, Fall Y/Y
The Cheesecake Factory reported fourth-quarter fiscal 2019 results wherein both earnings and revenues missed the Zacks Consensus Estimate. Following lower-than-expected results, shares of the company declined 3.4% in after-hours trading on Feb 19.
In the quarter under review, adjusted earnings came in at 58 cents per share, lagging the Zacks Consensus Estimate of 61 cents. Moreover, the bottom line dipped 7.9% from the prior-year number. This downside was primarily attributed to higher operating and acquisition-related costs.
Let’s take a closer look at the numbers.
Detailed Revenue Discussion
Total revenues of $694 million in the reported quarter missed the Zacks Consensus Estimate of $704 million. However, the top line improved 18.6% year over year on the back of increased comparable sales.
Comps at Cheesecake Factory restaurants slipped to 0.6% growth from the 1.9% rise in the year-ago quarter.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
The Cheesecake Factory Incorporated Price, Consensus and EPS SurpriseThe Cheesecake Factory Incorporated price-consensus-eps-surprise-chart | The Cheesecake Factory Incorporated Quote
Costs in Detail
Cost of sales ratio decreased 20 bps year over year to 22.8% in the fourth quarter. Meanwhile, the labor expense ratio was 36.2%, up 40 bps from the year-ago quarter.
Other operating costs represented 26% of revenues, up 200 bps from the year-ago quarter. General and administrative (G&A) expenses accounted for 6.8% of revenues, up 50 bps from the prior-year quarter. However, in the fourth quarter, pre-opening expenses were flat at 0.9% year over year.
Balance Sheet
As of Dec 31, 2019, Cheesecake Factory’s cash and cash equivalents totaled $65.4 million compared with $26.6 million as of Jan 1, 2019. In the fiscal fourth quarter, the company repurchased approximately 10,000 shares of its common stock for $0.4 million. In 2019, Cheesecake Factory bought back 1.1 million shares of common stock for $51 million.
The company’s board of directors declared a quarterly cash dividend of 36 cents per share of the common stock. The new dividend is payable Mar 20, 2020 to its shareholders of record at the close of business on Mar 9, 2020.
Developmental Details
In fiscal 2020, Cheesecake Factory anticipates opening 20 new restaurants including six Cheesecake Factory locations, six North Italia restaurants and eight restaurants within the FRC subsidiary. It also expects to launch four Cheesecake Factory restaurants internationally under licensing agreements
2019 Highlights
Total revenues of $ 2,482.7 million were up 6.4% year over year. Adjusted earnings per share (EPS) for the year ended Dec 31, 2019 was reported at $2.61 compared with $2.51 as on Jan 1, 2019. In fiscal 2019, Comps at Cheesecake Factory restaurants slid to 0.8% rise from growth of 1.7% a year ago.
Q1 Outlook
For the first quarter, adjusted EPS is estimated to be 69-74 cents based on anticipated comps growth of 1-2% at Cheesecake Factory restaurants. Total revenues for The Cheesecake Factory restaurants are estimated in the range of $715-$720 million.
Fiscal 2020 Guidance
For the fiscal 2020, Cheesecake Factory expects earnings of $2.70-$2.86 per share. Its mid-point of $2.78 is above the current Zacks Consensus Estimate of $2.73. Meanwhile, the company expects comps to grow in the range of 1-2%. Total revenues for fiscal 2020 are estimated at $2.9 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 15.15% due to these changes.
VGM Scores
At this time, Cheesecake Factory has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Cheesecake Factory has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.