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Cheesecake Factory (CAKE) Q1 Earnings Top, Revenues Lag
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The Cheesecake Factory Incorporated (CAKE - Free Report) reported first-quarter fiscal 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed. The top and bottom lines rose year over year. Incremental pricing and cost-saving efforts resulted in the uptick despite continued inflation, volatility and a dynamic operating environment.
David Overton, chairman and CEO of Cheesecake Factory, stated, “We were pleased with our first quarter performance highlighted by comparable sales growth across our portfolio of concepts. We delivered a solid start to the year with revenue finishing in-line with our expectations and adjusted net income margin at the high end of our guidance range.”
Earnings & Revenue Discussion
In the quarter under review, the company reported adjusted earnings per share (EPS) of 61 cents, beating the Zacks Consensus Estimate of 59 cents. The reported figure represented a 29.8% year-over-year increase.
Total revenues of $866.1 million missed the Zacks Consensus Estimate by 0.3%. However, the top line increased 9.1% on a year-over-year basis.
In the reported quarter, comps at Cheesecake Factory restaurants increased 5.7% year over year compared with a rise of 20.7% in the prior-year quarter. Comps grew 14.9% from the 2019 level.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
Cost of food and beverage, as a percentage of revenues, increased 10 basis points (bps) year over year to 23.8% in the fiscal first quarter. Labor expenses, as a percentage of total revenues, amounted to 36%, down 130 bps from the year-ago quarter’s levels. Other operating costs, as a percentage of total revenues, were 26.7%, up 50 bps from the prior-year quarter’s level.
General and administrative expenses, accounted for 6.2% of revenues, remained flat year over year. In the fiscal first quarter, pre-opening expenses accounted for 0.3% of revenues, up 10 bps year over year.
Balance Sheet
As of Apr 4, Cheesecake Factory’s cash and cash equivalents totaled $116.2 million compared with $114.8 million in the previous quarter. Long-term debt (net of issuance costs) was $468.5 million compared with $468 million in the previous quarter. As of Apr 4, the company had total available liquidity of $355 million.
Management declared a quarterly cash dividend of 27 cents per share. The dividend will be payable on Jun 6, to shareholders of record as of May 24. In the fiscal first quarter, CAKE also repurchased 341,500 shares for $12.4 million.
Store Developments
In the quarter under review, Cheesecake Factory opened two restaurants. Management expects to open 20-22 restaurants in fiscal 2023.
Zacks Rank & Key Picks
Cheesecake Factory currently carries a Zacks Rank #3 (Hold).
Arcos Dorados has a long-term earnings growth rate of 7.8%. The stock has gained 27.9% in the past year.
The Zacks Consensus Estimate for ARCO’s 2023 sales suggests growth of 13.4% from the year-ago period’s levels.
Chipotle has a long-term earnings growth rate of 31.8%. The stock has improved 60.4% in the past year.
The Zacks Consensus Estimate for CMG’s 2024 sales and EPS suggests growth of 12.4% and 20%, respectively, from the year-ago period’s levels.
Chuy’s Holdings has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have increased 55.8% in the past year. The Zacks Consensus Estimate for CHUY’s 2023 sales and EPS suggests growth of 10.1% and 23.4%, respectively, from the year-ago period’s levels.
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Cheesecake Factory (CAKE) Q1 Earnings Top, Revenues Lag
The Cheesecake Factory Incorporated (CAKE - Free Report) reported first-quarter fiscal 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed. The top and bottom lines rose year over year. Incremental pricing and cost-saving efforts resulted in the uptick despite continued inflation, volatility and a dynamic operating environment.
David Overton, chairman and CEO of Cheesecake Factory, stated, “We were pleased with our first quarter performance highlighted by comparable sales growth across our portfolio of concepts. We delivered a solid start to the year with revenue finishing in-line with our expectations and adjusted net income margin at the high end of our guidance range.”
Earnings & Revenue Discussion
In the quarter under review, the company reported adjusted earnings per share (EPS) of 61 cents, beating the Zacks Consensus Estimate of 59 cents. The reported figure represented a 29.8% year-over-year increase.
Total revenues of $866.1 million missed the Zacks Consensus Estimate by 0.3%. However, the top line increased 9.1% on a year-over-year basis.
In the reported quarter, comps at Cheesecake Factory restaurants increased 5.7% year over year compared with a rise of 20.7% in the prior-year quarter. Comps grew 14.9% from the 2019 level.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
The Cheesecake Factory Incorporated price-consensus-eps-surprise-chart | The Cheesecake Factory Incorporated Quote
Costs in Detail
Cost of food and beverage, as a percentage of revenues, increased 10 basis points (bps) year over year to 23.8% in the fiscal first quarter. Labor expenses, as a percentage of total revenues, amounted to 36%, down 130 bps from the year-ago quarter’s levels. Other operating costs, as a percentage of total revenues, were 26.7%, up 50 bps from the prior-year quarter’s level.
General and administrative expenses, accounted for 6.2% of revenues, remained flat year over year. In the fiscal first quarter, pre-opening expenses accounted for 0.3% of revenues, up 10 bps year over year.
Balance Sheet
As of Apr 4, Cheesecake Factory’s cash and cash equivalents totaled $116.2 million compared with $114.8 million in the previous quarter. Long-term debt (net of issuance costs) was $468.5 million compared with $468 million in the previous quarter. As of Apr 4, the company had total available liquidity of $355 million.
Management declared a quarterly cash dividend of 27 cents per share. The dividend will be payable on Jun 6, to shareholders of record as of May 24. In the fiscal first quarter, CAKE also repurchased 341,500 shares for $12.4 million.
Store Developments
In the quarter under review, Cheesecake Factory opened two restaurants. Management expects to open 20-22 restaurants in fiscal 2023.
Zacks Rank & Key Picks
Cheesecake Factory currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Arcos Dorados Holdings Inc. (ARCO - Free Report) , Chipotle Mexican Grill, Inc. (CMG - Free Report) and Chuy's Holdings, Inc. (CHUY - Free Report) . While ARCO and CMG flaunt a Zacks Rank #1 (Strong Buy) CHUY carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today's Zacks #1 Rank stocks here.
Arcos Dorados has a long-term earnings growth rate of 7.8%. The stock has gained 27.9% in the past year.
The Zacks Consensus Estimate for ARCO’s 2023 sales suggests growth of 13.4% from the year-ago period’s levels.
Chipotle has a long-term earnings growth rate of 31.8%. The stock has improved 60.4% in the past year.
The Zacks Consensus Estimate for CMG’s 2024 sales and EPS suggests growth of 12.4% and 20%, respectively, from the year-ago period’s levels.
Chuy’s Holdings has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have increased 55.8% in the past year. The Zacks Consensus Estimate for CHUY’s 2023 sales and EPS suggests growth of 10.1% and 23.4%, respectively, from the year-ago period’s levels.