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Cheesecake Factory (CAKE) Q3 Earnings Lag Estimates, Stock Down
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The Cheesecake Factory Incorporated (CAKE - Free Report) reported third-quarter fiscal 2021 results, with earnings and revenues missing the Zacks Consensus Estimate. However, the top and the bottom line increased on a year-over-year basis. Following the announcement, shares of the company fell 3.2% during the afterhours trading session on Nov 3.
Earnings & Revenue Discussion
In the quarter under review, adjusted earnings per share (EPS) came in at 65 cents missing the Zacks Consensus Estimate of 70 cents. In the prior-year quarter, the company had reported an adjusted loss of 33 cents per share. The upside was primarily driven by improvements in labor and other operating expenses.
During the fiscal third quarter, total revenues of $754.5 million missed the Zacks Consensus Estimate of $760 million by 0.8%. The top line surged 45.7% on a year-over-year basis. The upside can be primarily attributed to solid off-premise sales growth. Quarter-to-date (through Nov 2), the off-premise model contributed 28% to total sales. Off-premise average weekly sales have doubled compared with fiscal 2019 levels.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
During the reported quarter, comps at Cheesecake Factory restaurants increased 41.1% year over year. In the prior-year quarter, comps had fallen 23.3% year over year. Nevertheless, the metric is up 8.3% compared with 2019 levels.
Costs in Detail
Cost of sales, as a percentage of revenues, declined 30 basis points (bps) year over year to 22.5% in the fiscal third quarter. Labor expenses, as a percentage of total revenues, was 37.1%, down 160 bps from the year-ago quarter’s levels. Other operating costs (as a percentage of total revenues) came in at 26.7%, down 400 bps from the prior-year quarter’s levels.
General and administrative (G&A) expenses accounted for 6.1% of revenues compared with 7.3% in the prior-year quarter. In the fiscal third quarter, pre-opening expenses accounted for 0.4% of revenues, down 10 bps year over year.
Balance Sheet
As of Sep 28, 2021, Cheesecake Factory’s cash and cash equivalents totaled $131 million compared with $154.1 million as of Dec 29, 2020. During the fiscal third quarter, long-term debt (net of issuance costs) came in at $465.5 million compared with $280 million as of Dec 29, 2020.
Developmental Details
During the fiscal third quarter, the company opened four new restaurants including North Italia and Flower Child in Phoenix, North Italia in Nashville and Blanco in Chicago. It also opened a Cheesecake Factory restaurant in Shanghai under a licensing agreement. Subsequent to quarter-end, the company opened the North Italia store in the Orlando area, Blanco and Culinary Dropout in Denver and one Cheesecake Factory restaurant in Huntsville, AL. During the quarter, the company achieved its development objective of opening 14 new restaurants (across its concepts) in fiscal 2021.
Other Business Updates
Since the start of fiscal fourth quarter to Nov 2, 2021, comps at Cheesecake Factory (across all operating models) increased approximately 20% year over year. Comps also increased 10.5% from 2019 levels. Solid off-premise sales were a primary contributor to the company’s performance.
Zacks Rank & Peer Releases
Cheesecake Factory currently carries a Zacks Rank #4 (Sell).
YUM! Brands, Inc. (YUM - Free Report) reported strong third-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company’s adjusted EPS of $1.22 beat the Zacks Consensus Estimate of $1.06. In the prior-year quarter, the company had reported adjusted earnings of $1.01. Quarterly revenues of $1,606 million surpassed the consensus estimate of $1,584 million. The top line increased 11% year over year. The company’s results in the quarter benefited from strong digital sales, robust unit development and a diversified global business model.
McDonald’s Corporation (MCD - Free Report) reported third-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company reported adjusted EPS of $2.76, which surpassed the Zacks Consensus Estimate of $2.46. The bottom line rose 24% year over year. Quarterly revenues of $6,201.3 million beat the Zacks Consensus Estimate of $6,024 million. The figure rose 14% year over year. The top line benefited from an increase in global comparable sales.
Starbucks Corporation (SBUX - Free Report) reported mixed fourth-quarter fiscal 2021 results, with earnings meeting the Zacks Consensus Estimate and revenues missing the same. However, the top and bottom line improved on a year over year basis. The company reported adjusted EPS of $, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company had reported adjusted earnings per share of 51 cents. Quarterly revenues of $8,146.7 million missed the Zacks Consensus Estimate of $8,263 million by 1.4%. The top line increased 31.3% from the year-ago quarter’s levels. The uptick was driven by growth in comparable store sales.
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Cheesecake Factory (CAKE) Q3 Earnings Lag Estimates, Stock Down
The Cheesecake Factory Incorporated (CAKE - Free Report) reported third-quarter fiscal 2021 results, with earnings and revenues missing the Zacks Consensus Estimate. However, the top and the bottom line increased on a year-over-year basis. Following the announcement, shares of the company fell 3.2% during the afterhours trading session on Nov 3.
Earnings & Revenue Discussion
In the quarter under review, adjusted earnings per share (EPS) came in at 65 cents missing the Zacks Consensus Estimate of 70 cents. In the prior-year quarter, the company had reported an adjusted loss of 33 cents per share. The upside was primarily driven by improvements in labor and other operating expenses.
During the fiscal third quarter, total revenues of $754.5 million missed the Zacks Consensus Estimate of $760 million by 0.8%. The top line surged 45.7% on a year-over-year basis. The upside can be primarily attributed to solid off-premise sales growth. Quarter-to-date (through Nov 2), the off-premise model contributed 28% to total sales. Off-premise average weekly sales have doubled compared with fiscal 2019 levels.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
The Cheesecake Factory Incorporated price-consensus-eps-surprise-chart | The Cheesecake Factory Incorporated Quote
During the reported quarter, comps at Cheesecake Factory restaurants increased 41.1% year over year. In the prior-year quarter, comps had fallen 23.3% year over year. Nevertheless, the metric is up 8.3% compared with 2019 levels.
Costs in Detail
Cost of sales, as a percentage of revenues, declined 30 basis points (bps) year over year to 22.5% in the fiscal third quarter. Labor expenses, as a percentage of total revenues, was 37.1%, down 160 bps from the year-ago quarter’s levels. Other operating costs (as a percentage of total revenues) came in at 26.7%, down 400 bps from the prior-year quarter’s levels.
General and administrative (G&A) expenses accounted for 6.1% of revenues compared with 7.3% in the prior-year quarter. In the fiscal third quarter, pre-opening expenses accounted for 0.4% of revenues, down 10 bps year over year.
Balance Sheet
As of Sep 28, 2021, Cheesecake Factory’s cash and cash equivalents totaled $131 million compared with $154.1 million as of Dec 29, 2020. During the fiscal third quarter, long-term debt (net of issuance costs) came in at $465.5 million compared with $280 million as of Dec 29, 2020.
Developmental Details
During the fiscal third quarter, the company opened four new restaurants including North Italia and Flower Child in Phoenix, North Italia in Nashville and Blanco in Chicago. It also opened a Cheesecake Factory restaurant in Shanghai under a licensing agreement. Subsequent to quarter-end, the company opened the North Italia store in the Orlando area, Blanco and Culinary Dropout in Denver and one Cheesecake Factory restaurant in Huntsville, AL. During the quarter, the company achieved its development objective of opening 14 new restaurants (across its concepts) in fiscal 2021.
Other Business Updates
Since the start of fiscal fourth quarter to Nov 2, 2021, comps at Cheesecake Factory (across all operating models) increased approximately 20% year over year. Comps also increased 10.5% from 2019 levels. Solid off-premise sales were a primary contributor to the company’s performance.
Zacks Rank & Peer Releases
Cheesecake Factory currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
YUM! Brands, Inc. (YUM - Free Report) reported strong third-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company’s adjusted EPS of $1.22 beat the Zacks Consensus Estimate of $1.06. In the prior-year quarter, the company had reported adjusted earnings of $1.01. Quarterly revenues of $1,606 million surpassed the consensus estimate of $1,584 million. The top line increased 11% year over year. The company’s results in the quarter benefited from strong digital sales, robust unit development and a diversified global business model.
McDonald’s Corporation (MCD - Free Report) reported third-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both the metrics increased year over year. The company reported adjusted EPS of $2.76, which surpassed the Zacks Consensus Estimate of $2.46. The bottom line rose 24% year over year. Quarterly revenues of $6,201.3 million beat the Zacks Consensus Estimate of $6,024 million. The figure rose 14% year over year. The top line benefited from an increase in global comparable sales.
Starbucks Corporation (SBUX - Free Report) reported mixed fourth-quarter fiscal 2021 results, with earnings meeting the Zacks Consensus Estimate and revenues missing the same. However, the top and bottom line improved on a year over year basis. The company reported adjusted EPS of $, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company had reported adjusted earnings per share of 51 cents. Quarterly revenues of $8,146.7 million missed the Zacks Consensus Estimate of $8,263 million by 1.4%. The top line increased 31.3% from the year-ago quarter’s levels. The uptick was driven by growth in comparable store sales.