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Cheesecake Factory (CAKE) Q4 Earnings Miss Estimates, Fall Y/Y
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The Cheesecake Factory Incorporated (CAKE - Free Report) reported fourth-quarter fiscal 2020 results, with earnings and revenues missing the Zacks Consensus Estimate as well as declining on a year-over-year basis.
Nonetheless, management is bullish regarding its off-premise business model as it helped the company stay afloat amid the pandemic. Notably, sales at off premise business model have exceeded the pre-pandemic levels and continued to sustain growth.
In this regard, David Overton, chairman and chief executive officer of Cheesecake Factory, stated, “We had a good start to the fourth quarter with comparable sales at The Cheesecake Factory restaurants down just high single digits in October despite mandated capacity restrictions.”
Earnings & Revenue Discussion
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
In the quarter under review, adjusted loss per share came in at 32 cents, wider than the Zacks Consensus Estimate of a loss of 9 cents. In the prior-year quarter, the company had reported adjusted earnings of 58 cents per share. The downside was primarily caused by rise in labor and other operating expenses.
During the fiscal fourth quarter, total revenues of $554.6 million missed the Zacks Consensus Estimate of $604 million by 8.2%. Also, the top line declined 20.1% on a year-over-year basis. The decline was primarily attributed to additional dining room closures and capacity restrictions stemming from a rise in COVID-19 cases. During the reported quarter, comps at Cheesecake Factory restaurants declined 19.5% year over year.
Costs in Detail
Cost of sales, as a percentage of revenues, increased 10 basis points (bps) year over year to 22.9% in the fiscal fourth quarter. Labor expenses, as a percentage of total revenues, was 39.3%, up 310 bps from the year-ago quarter’s levels.
Other operating costs represented 30.2% of revenues compared with 26% in the prior-year quarter. General and administrative (G&A) expenses accounted for 7.3% of revenues, up 50 bps from the prior-year quarter’s levels. In the fiscal fourth quarter, pre-opening expenses accounted for 0.5% of revenues, down 40 bps year over year.
Balance Sheet
As of Dec 29, 2020, Cheesecake Factory’s cash and cash equivalents totaled $154.1 million compared with $58.4 million as of Dec 31, 2019.
During the fiscal fourth quarter, the company made payment-in-kind dividend worth $5 million to its convertible preferred stockholders.
Long-term debt totaled $280 million in the fiscal fourth quarter compared with $290 million as on Dec 31, 2019.
Developmental Details
As of Feb 17, the company reopened indoor dining rooms with limited capacity across 80% of its restaurants (which includes 166 Cheesecake Factory locations). Notably, the restaurants are operating at 50% capacity.
Approximately 17% of the company’s restaurants (which includes 39 Cheesecake Factory locations) are operating with reopened patios and social-distancing protocols. While one Cheesecake Factory location is operating in an off-premise only model, three locations have been closed owing to the pandemic.
During the fiscal fourth quarter, the company opened a restaurant in Clearwater, FL. It also opened a culinary dropout and Blanco at additional locations in Arizona. Internationally, the company opened a restaurant in Mexico under a licensing agreement.
Other Business Updates
Since the start of the fiscal first quarter to Feb 16, 2021, comps at Cheesecake Factory (across all operating models) declined approximately 18%. However, for restaurants with reopened indoor dining rooms, comps are down 9% year over year.
2020 Highlights
Total revenues in 2020 came in at $1,983.2 million compared with $2,482.7 million in 2019.
General and administrative expenses in 2020 came in at $157.6 million compared with $160.2 million in 2019.
In 2020, adjusted loss per share came in at $1.49 against earnings of $2.61 in the previous year.
Zacks Rank & Peer Releases
Cheesecake Factory carries a Zacks Rank #4 (Sell).
Yum! Brands, Inc. (YUM - Free Report) reported strong fourth-quarter 2020 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company’s adjusted earnings of $1.15 beat the Zacks Consensus Estimate of 99 cents. In the prior-year quarter, the company had reported adjusted earnings of $1.00. Quarterly revenues of $1,743 million surpassed the consensus estimate of $1,731 million. The top line also increased 3% year over year. The upside can be attributed to increase in company sales.
McDonald's Corporation (MCD - Free Report) reported fourth-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate. The company reported adjusted earnings of $1.70 per share, which missed the Zacks Consensus Estimate of $1.75. Moreover, the bottom line declined 14% year over year. Quarterly revenues of $5,313.8 million missed the Zacks Consensus Estimate of $5,320 million. Moreover, the top line declined 2% year over year. The downtick was caused by the coronavirus pandemic.
Starbucks Corporation (SBUX - Free Report) reported mixed first-quarter fiscal 2021 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The company reported adjusted earnings per share (EPS) of 61 cents, which beat the Zacks Consensus Estimate of 55 cents. In the prior-year quarter, the company had reported adjusted EPS of 79 cents. Meanwhile, quarterly revenues of $6,749.4 million missed the Zacks Consensus Estimate of $6,873 million. Moreover, the top line fell 4.9% from the year-ago quarter’s levels. The downside was due to dismal global retail and comparable sales as well as decline in store traffic.
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You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Cheesecake Factory (CAKE) Q4 Earnings Miss Estimates, Fall Y/Y
The Cheesecake Factory Incorporated (CAKE - Free Report) reported fourth-quarter fiscal 2020 results, with earnings and revenues missing the Zacks Consensus Estimate as well as declining on a year-over-year basis.
Nonetheless, management is bullish regarding its off-premise business model as it helped the company stay afloat amid the pandemic. Notably, sales at off premise business model have exceeded the pre-pandemic levels and continued to sustain growth.
In this regard, David Overton, chairman and chief executive officer of Cheesecake Factory, stated, “We had a good start to the fourth quarter with comparable sales at The Cheesecake Factory restaurants down just high single digits in October despite mandated capacity restrictions.”
Earnings & Revenue Discussion
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
The Cheesecake Factory Incorporated price-consensus-eps-surprise-chart | The Cheesecake Factory Incorporated Quote
In the quarter under review, adjusted loss per share came in at 32 cents, wider than the Zacks Consensus Estimate of a loss of 9 cents. In the prior-year quarter, the company had reported adjusted earnings of 58 cents per share. The downside was primarily caused by rise in labor and other operating expenses.
During the fiscal fourth quarter, total revenues of $554.6 million missed the Zacks Consensus Estimate of $604 million by 8.2%. Also, the top line declined 20.1% on a year-over-year basis. The decline was primarily attributed to additional dining room closures and capacity restrictions stemming from a rise in COVID-19 cases. During the reported quarter, comps at Cheesecake Factory restaurants declined 19.5% year over year.
Costs in Detail
Cost of sales, as a percentage of revenues, increased 10 basis points (bps) year over year to 22.9% in the fiscal fourth quarter. Labor expenses, as a percentage of total revenues, was 39.3%, up 310 bps from the year-ago quarter’s levels.
Other operating costs represented 30.2% of revenues compared with 26% in the prior-year quarter. General and administrative (G&A) expenses accounted for 7.3% of revenues, up 50 bps from the prior-year quarter’s levels. In the fiscal fourth quarter, pre-opening expenses accounted for 0.5% of revenues, down 40 bps year over year.
Balance Sheet
As of Dec 29, 2020, Cheesecake Factory’s cash and cash equivalents totaled $154.1 million compared with $58.4 million as of Dec 31, 2019.
During the fiscal fourth quarter, the company made payment-in-kind dividend worth $5 million to its convertible preferred stockholders.
Long-term debt totaled $280 million in the fiscal fourth quarter compared with $290 million as on Dec 31, 2019.
Developmental Details
As of Feb 17, the company reopened indoor dining rooms with limited capacity across 80% of its restaurants (which includes 166 Cheesecake Factory locations). Notably, the restaurants are operating at 50% capacity.
Approximately 17% of the company’s restaurants (which includes 39 Cheesecake Factory locations) are operating with reopened patios and social-distancing protocols. While one Cheesecake Factory location is operating in an off-premise only model, three locations have been closed owing to the pandemic.
During the fiscal fourth quarter, the company opened a restaurant in Clearwater, FL. It also opened a culinary dropout and Blanco at additional locations in Arizona. Internationally, the company opened a restaurant in Mexico under a licensing agreement.
Other Business Updates
Since the start of the fiscal first quarter to Feb 16, 2021, comps at Cheesecake Factory (across all operating models) declined approximately 18%. However, for restaurants with reopened indoor dining rooms, comps are down 9% year over year.
2020 Highlights
Total revenues in 2020 came in at $1,983.2 million compared with $2,482.7 million in 2019.
General and administrative expenses in 2020 came in at $157.6 million compared with $160.2 million in 2019.
In 2020, adjusted loss per share came in at $1.49 against earnings of $2.61 in the previous year.
Zacks Rank & Peer Releases
Cheesecake Factory carries a Zacks Rank #4 (Sell).
Yum! Brands, Inc. (YUM - Free Report) reported strong fourth-quarter 2020 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company’s adjusted earnings of $1.15 beat the Zacks Consensus Estimate of 99 cents. In the prior-year quarter, the company had reported adjusted earnings of $1.00. Quarterly revenues of $1,743 million surpassed the consensus estimate of $1,731 million. The top line also increased 3% year over year. The upside can be attributed to increase in company sales.
McDonald's Corporation (MCD - Free Report) reported fourth-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate. The company reported adjusted earnings of $1.70 per share, which missed the Zacks Consensus Estimate of $1.75. Moreover, the bottom line declined 14% year over year. Quarterly revenues of $5,313.8 million missed the Zacks Consensus Estimate of $5,320 million. Moreover, the top line declined 2% year over year. The downtick was caused by the coronavirus pandemic.
Starbucks Corporation (SBUX - Free Report) reported mixed first-quarter fiscal 2021 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The company reported adjusted earnings per share (EPS) of 61 cents, which beat the Zacks Consensus Estimate of 55 cents. In the prior-year quarter, the company had reported adjusted EPS of 79 cents. Meanwhile, quarterly revenues of $6,749.4 million missed the Zacks Consensus Estimate of $6,873 million. Moreover, the top line fell 4.9% from the year-ago quarter’s levels. The downside was due to dismal global retail and comparable sales as well as decline in store traffic.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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