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.
Cheesecake Factory (CAKE) Q4 Earnings Meet, Revenues Lag
Read MoreHide Full Article
The Cheesecake Factory Incorporated (CAKE - Free Report) reported fourth-quarter fiscal 2022 results, wherein earnings met the Zacks Consensus Estimate but revenues missed the same. The top and bottom lines rose year over year, courtesy of incremental pricing and cost-saving efforts despite the continued inflation, volatility and a dynamic operating environment. Following the announcement, shares of the company declined 1.9% in the after-hours trading session on Feb 22.
David Overton, chairman and CEO of Cheesecake Factory, stated, “During the quarter, we opened eight new restaurants and successfully implemented incremental pricing to support our stated objective of recovering our operating margins. We believe the strong consumer demand we experienced at our new restaurant openings and continued positive sales trends following our pricing actions demonstrate the strength and resilience of our concepts.”
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
In the quarter under review, the company reported adjusted earnings per share (EPS) of 56 cents, meeting the Zacks Consensus Estimate. The reported adjusted EPS represented a 14.3% year-over-year increase.
In the fiscal fourth quarter, total revenues of $892.8 million missed the Zacks Consensus Estimate by 1.1%. The top line increased 14.9% on a year-over-year basis.
In the reported quarter, comps at Cheesecake Factory restaurants increased 4% year over year compared with a 33.8% rise reported in the prior-year quarter. Also, comps grew 11.4% from the 2019 level. From the start of the first quarter of fiscal 2023 till Feb 21, 2023, comps at Cheesecake Factory (across all operating models) increased 9.5% year over year and 17% from the fiscal 2019 level.
Costs in Detail
Cost of food and beverage, as a percentage of revenues, increased 170 basis points (bps) year over year to 24.7% in the fiscal fourth quarter. Labor expenses, as a percentage of total revenues, amounted to 35.7%, down 140 bps from the year-ago quarter’s levels. Other operating costs (as a percentage of total revenues) came in at 26.6%, down 40 bps from the prior-year quarter’s level.
General and administrative expenses accounted for 6.3% of revenues compared with 6.1% in the prior-year quarter. In the fiscal fourth quarter, pre-opening expenses accounted for 0.8% of revenues, up 30 bps year over year.
Balance Sheet
As of Jan 3, 2023, Cheesecake Factory’s cash and cash equivalents totaled $114.8 million compared with $133.2 million reported in the previous quarter. At the end of fiscal fourth quarter, long-term debt (net of issuance costs) was $468 million compared with $467.5 million in the previous quarter. As of Jan 3, 2023, the company had total available liquidity of $354 million.
The company declared a quarterly cash dividend of 27 cents per share. The dividend will be payable Mar 21, 2023, to its shareholders of record as of Mar 8, 2023. In the fiscal fourth quarter, the company also repurchased 663,700 shares for $21.6 million.
Store Developments
In the fiscal fourth quarter, the company opened eight restaurants in the domestic market and one Cheesecake Factory restaurant internationally in Mexico under a licensing agreement.
Fiscal 2022 Highlights
Adjusted earnings were $1.51 per share, down from $2.13 a year ago. Total revenues were $3.3 billion in fiscal 2022, up from $2.93 billion a year ago. In fiscal 2022, comps at Cheesecake Factory restaurants increased 7% year over year compared with a 44% rise reported in the prior-year quarter.
Chuy’s Holdings currently sports a Zacks Rank #1. CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have improved 25.3% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.1% and 16.1%, respectively, from the year-ago period’s reported levels.
Arcos Dorados currently carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 11.6%. Shares of the company have gained 11.1% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 8.1% and 4.2%, respectively, from the year-ago period’s reported levels.
Brinker carries a Zacks Rank #2. EAT has a long-term earnings growth rate of 7.1%. The stock has gained 0.4% in the past year.
The Zacks Consensus Estimate for Brinker’s 2024 sales and EPS suggests growth of 3.9% and 36.5%, respectively, from the year-ago period’s reported levels.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Cheesecake Factory (CAKE) Q4 Earnings Meet, Revenues Lag
The Cheesecake Factory Incorporated (CAKE - Free Report) reported fourth-quarter fiscal 2022 results, wherein earnings met the Zacks Consensus Estimate but revenues missed the same. The top and bottom lines rose year over year, courtesy of incremental pricing and cost-saving efforts despite the continued inflation, volatility and a dynamic operating environment. Following the announcement, shares of the company declined 1.9% in the after-hours trading session on Feb 22.
David Overton, chairman and CEO of Cheesecake Factory, stated, “During the quarter, we opened eight new restaurants and successfully implemented incremental pricing to support our stated objective of recovering our operating margins. We believe the strong consumer demand we experienced at our new restaurant openings and continued positive sales trends following our pricing actions demonstrate the strength and resilience of our concepts.”
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
The Cheesecake Factory Incorporated price-consensus-eps-surprise-chart | The Cheesecake Factory Incorporated Quote
Earnings & Revenue Discussion
In the quarter under review, the company reported adjusted earnings per share (EPS) of 56 cents, meeting the Zacks Consensus Estimate. The reported adjusted EPS represented a 14.3% year-over-year increase.
In the fiscal fourth quarter, total revenues of $892.8 million missed the Zacks Consensus Estimate by 1.1%. The top line increased 14.9% on a year-over-year basis.
In the reported quarter, comps at Cheesecake Factory restaurants increased 4% year over year compared with a 33.8% rise reported in the prior-year quarter. Also, comps grew 11.4% from the 2019 level. From the start of the first quarter of fiscal 2023 till Feb 21, 2023, comps at Cheesecake Factory (across all operating models) increased 9.5% year over year and 17% from the fiscal 2019 level.
Costs in Detail
Cost of food and beverage, as a percentage of revenues, increased 170 basis points (bps) year over year to 24.7% in the fiscal fourth quarter. Labor expenses, as a percentage of total revenues, amounted to 35.7%, down 140 bps from the year-ago quarter’s levels. Other operating costs (as a percentage of total revenues) came in at 26.6%, down 40 bps from the prior-year quarter’s level.
General and administrative expenses accounted for 6.3% of revenues compared with 6.1% in the prior-year quarter. In the fiscal fourth quarter, pre-opening expenses accounted for 0.8% of revenues, up 30 bps year over year.
Balance Sheet
As of Jan 3, 2023, Cheesecake Factory’s cash and cash equivalents totaled $114.8 million compared with $133.2 million reported in the previous quarter. At the end of fiscal fourth quarter, long-term debt (net of issuance costs) was $468 million compared with $467.5 million in the previous quarter. As of Jan 3, 2023, the company had total available liquidity of $354 million.
The company declared a quarterly cash dividend of 27 cents per share. The dividend will be payable Mar 21, 2023, to its shareholders of record as of Mar 8, 2023. In the fiscal fourth quarter, the company also repurchased 663,700 shares for $21.6 million.
Store Developments
In the fiscal fourth quarter, the company opened eight restaurants in the domestic market and one Cheesecake Factory restaurant internationally in Mexico under a licensing agreement.
Fiscal 2022 Highlights
Adjusted earnings were $1.51 per share, down from $2.13 a year ago. Total revenues were $3.3 billion in fiscal 2022, up from $2.93 billion a year ago. In fiscal 2022, comps at Cheesecake Factory restaurants increased 7% year over year compared with a 44% rise reported in the prior-year quarter.
Zacks Rank & Key Picks
Cheesecake Factory currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Retail – Restaurants industry are Chuy's Holdings, Inc. (CHUY - Free Report) , Arcos Dorados Holdings Inc. (ARCO - Free Report) and Brinker International, Inc. (EAT - Free Report) .
Chuy’s Holdings currently sports a Zacks Rank #1. CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have improved 25.3% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.1% and 16.1%, respectively, from the year-ago period’s reported levels.
Arcos Dorados currently carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 11.6%. Shares of the company have gained 11.1% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 8.1% and 4.2%, respectively, from the year-ago period’s reported levels.
Brinker carries a Zacks Rank #2. EAT has a long-term earnings growth rate of 7.1%. The stock has gained 0.4% in the past year.
The Zacks Consensus Estimate for Brinker’s 2024 sales and EPS suggests growth of 3.9% and 36.5%, respectively, from the year-ago period’s reported levels.