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Cheesecake Factory (CAKE) Q4 Earnings in Line, Revenues Top
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The Cheesecake Factory Inc. (CAKE - Free Report) reported fourth-quarter 2016 earnings per share (EPS) of 67 cents, in line with the Zacks Consensus Estimate. Meanwhile, the figure increased 24.1% from the prior-year quarter earnings of 54 cents on higher revenues and a lower share count.
Sales of $603.1 million surpassed the Zacks Consensus Estimate of $594.3 million by 1.5% and were up 14.5% on a year-over-year basis.
Investors should note that the fourth-quarter 2016 had 14 weeks compared with 13 weeks in the fourth-quarter 2015. The additional week contributed roughly $54.7 million in sales and about 7 cents in adjusted earnings per share.
Inside the Headlines
Comps at Cheesecake Factory restaurants increased 1.1%, same as the year-ago quarter growth, which is lower than the last-quarter growth of 1.7%. Menu price increase of 2.5% and positive mix of 0.4% drove comps, partly offset by a 1.8% decline in traffic.
Cost of sales ratio decreased 60 basis points (bps) year over year to 23.2%. This was primarily attributable to lower seafood, groceries, dairy and meat costs, partially offset by an unfavourable comparison for poultry. Moreover, labor expense ratio was 33.6%, 80 bps higher year over year owing to high hourly wages.
General and administrative expenses accounted for 6.4% of revenues in the fourth quarter as compared to the prior-year quarter level of 6.8%. Also, pre-opening expenses were roughly $7 million, down 1.5% year over year.
2016 Results
Cheesecake Factory’s full-year adjusted earnings of $2.83 came in line with the Zacks Consensus Estimate. Meanwhile, it increased 19.4% from the year-ago quarter figure of $2.37 on the back of higher revenues.
Full-year revenues of $2.28 billion topped the Zacks Consensus Estimate of $2.27 billion and increased 8.3% year over year.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
For the first quarter, adjusted earnings per share are guided in the range of 71 cents to 74 cents. Meanwhile, comps are anticipated to be flat to up 1% at Cheesecake Factory restaurants. Notably, this comps sales range guidance assumes a roughly 50 bps negative impact from the shift of Easter and the allied spring break vacations into the second quarter of this year in comparison with that of the first quarter in 2016.
Meanwhile, the company expects total sales of roughly $565 million as the midpoint of the range for the first quarter.
Fiscal 2017 Guidance
Cheesecake Factory has cut down the upper end of the earnings guidance for fiscal 2017. The company now expects adjusted earnings per share in the range of $2.95 to $3.07 (earlier $2.95 to $3.11).
Meanwhile, comps are still anticipated to grow in the band of 1–2%.
Meanwhile, capital expenditures for the year are still anticipated in the range of $125–$140 million, including eight planned domestic openings and a few potential openings for early 2018.
The Zacks Consensus Estimate for Potbelly’s 2017 earnings climbed 2.2% over the past 30 days. The company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 39.82%.
Dave & Buster's earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 37.81%. Meanwhile, for fiscal 2017, EPS is expected to improve 35.1%.
Darden’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 2.57%. Further, for fiscal 2017, EPS is expected to grow 11.1%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
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Cheesecake Factory (CAKE) Q4 Earnings in Line, Revenues Top
The Cheesecake Factory Inc. (CAKE - Free Report) reported fourth-quarter 2016 earnings per share (EPS) of 67 cents, in line with the Zacks Consensus Estimate. Meanwhile, the figure increased 24.1% from the prior-year quarter earnings of 54 cents on higher revenues and a lower share count.
Sales of $603.1 million surpassed the Zacks Consensus Estimate of $594.3 million by 1.5% and were up 14.5% on a year-over-year basis.
Investors should note that the fourth-quarter 2016 had 14 weeks compared with 13 weeks in the fourth-quarter 2015. The additional week contributed roughly $54.7 million in sales and about 7 cents in adjusted earnings per share.
Inside the Headlines
Comps at Cheesecake Factory restaurants increased 1.1%, same as the year-ago quarter growth, which is lower than the last-quarter growth of 1.7%. Menu price increase of 2.5% and positive mix of 0.4% drove comps, partly offset by a 1.8% decline in traffic.
Cost of sales ratio decreased 60 basis points (bps) year over year to 23.2%. This was primarily attributable to lower seafood, groceries, dairy and meat costs, partially offset by an unfavourable comparison for poultry. Moreover, labor expense ratio was 33.6%, 80 bps higher year over year owing to high hourly wages.
General and administrative expenses accounted for 6.4% of revenues in the fourth quarter as compared to the prior-year quarter level of 6.8%. Also, pre-opening expenses were roughly $7 million, down 1.5% year over year.
2016 Results
Cheesecake Factory’s full-year adjusted earnings of $2.83 came in line with the Zacks Consensus Estimate. Meanwhile, it increased 19.4% from the year-ago quarter figure of $2.37 on the back of higher revenues.
Full-year revenues of $2.28 billion topped the Zacks Consensus Estimate of $2.27 billion and increased 8.3% year over year.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise | The Cheesecake Factory Incorporated Quote
First-Quarter 2017 Outlook
For the first quarter, adjusted earnings per share are guided in the range of 71 cents to 74 cents. Meanwhile, comps are anticipated to be flat to up 1% at Cheesecake Factory restaurants. Notably, this comps sales range guidance assumes a roughly 50 bps negative impact from the shift of Easter and the allied spring break vacations into the second quarter of this year in comparison with that of the first quarter in 2016.
Meanwhile, the company expects total sales of roughly $565 million as the midpoint of the range for the first quarter.
Fiscal 2017 Guidance
Cheesecake Factory has cut down the upper end of the earnings guidance for fiscal 2017. The company now expects adjusted earnings per share in the range of $2.95 to $3.07 (earlier $2.95 to $3.11).
Meanwhile, comps are still anticipated to grow in the band of 1–2%.
Meanwhile, capital expenditures for the year are still anticipated in the range of $125–$140 million, including eight planned domestic openings and a few potential openings for early 2018.
Zacks Rank & Stocks to Consider
Cheesecake Factory has a Zacks Rank #4 (Sell). Better-ranked stocks in this sector include Potbelly Corporation (PBPB - Free Report) , Dave & Buster's Entertainment, Inc. (PLAY - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) . While Potbelly sports a Zacks Rank #1 (Strong Buy), Dave & Buster's and Darden carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Potbelly’s 2017 earnings climbed 2.2% over the past 30 days. The company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 39.82%.
Dave & Buster's earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 37.81%. Meanwhile, for fiscal 2017, EPS is expected to improve 35.1%.
Darden’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 2.57%. Further, for fiscal 2017, EPS is expected to grow 11.1%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>