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The Cheesecake Factory Incorporated (CAKE - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line increased from the prior-year quarter’s figure.
Earnings & Revenue Discussion
In the quarter under review, the company reported adjusted earnings per share (EPS) of 80 cents, beating the Zacks Consensus Estimate of 74 cents by 8.1%. In the year-ago period, the company reported adjusted EPS of 56 cents.
Quarterly revenues missed the consensus estimate of $877 million by 0.03%. The top line dropped 1.8% on a year-over-year basis.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
In the reported quarter, comps at Cheesecake Factory restaurants rose 2.5% year over year (lower than our expectation of 4% growth) compared with 4% in the prior-year quarter. Comps rose 14% from 2019 levels. The upside was driven by improved traffic and a favorable menu mix.
For the 52-week ended Jan 2, 2024, comps at Cheesecake Factory restaurants increased 3% year over year compared with 7% growth reported a year ago.
North Italia comps rose 7% year over year compared with 9% in the year-ago quarter. The metric increased 34% compared with 2019 levels. Our model suggested the metric to rise 8.3% year over year.
Costs in Detail
The cost of food and beverage, as a percentage of revenues, declined 170 basis points (bps) year over year to 23% in the fiscal fourth quarter.
Labor expenses, as a percentage of total revenues, amounted to 35.2%, down 50 bps from the year-ago quarter’s levels. We expected the metric to be 35.7% of revenues in the quarter.
Other operating costs, as a percentage of total revenues, were 26.8%, up 20 bps from the prior-year quarter’s level. In the quarter, we anticipated the metric to be 26.4% of revenues.
General and administrative expenses accounted for 6.2% of revenues, down 10 bps year over year. Our model predicted the metric to be 6.1% of revenues in the fiscal fourth quarter.
In the fiscal fourth quarter, pre-opening expenses accounted for 1.1% of revenues, up 30 bps year over year.
Balance Sheet
As of Jan 2, 2024, Cheesecake Factory’s cash and cash equivalents totaled $56.3 million compared with $114.8 million at the end of the fiscal 2022. Long-term debt (net of issuance costs) was $470 million compared with $468 million as of fiscal 2022-end. As of Jan 2, the company had a total available liquidity of $292.8 million.
Management declared a quarterly cash dividend of 27 cents per share. The dividend will be payable on Mar 19 to shareholders of record as of Mar 6, 2024. In the fiscal fourth quarter, CAKE repurchased 318,400 shares for $9.8 million.
Store Developments
In the quarter under review, Cheesecake Factory opened nine new restaurants and registered solid demand. The openings included three Cheesecake Factory restaurants, three North Italia restaurants and three FRC restaurants. Internationally, the company opened two Cheesecake Factory restaurants under licensing agreements in China and Thailand. Subsequent to quarter-end, the company opened one North Italia restaurant, one Flower Child, one Culinary Dropout and one Cheesecake Factory restaurant (internationally under a licensing agreement in Mexico).
In fiscal 2024, the management expects to open 22 new restaurants. This includes three to four Cheesecake factories, six to seven North Italia's, six to seven Flower Child and six FRC restaurants.
Fiscal 2023 Highlights
Total revenues in fiscal 2023 amounted to $3.4 billion compared with $3.3 billion reported in fiscal 2022.
Adjusted net income in fiscal 2023 came in at $131.8 million compared with $76.2 million in fiscal 2022.
In fiscal 2023, adjusted EPS came in at $2.69 per share compared with $1.51 reported in the previous year.
Zacks Rank
Cheesecake Factory currently carries a Zacks Rank #3 (Hold).
McDonald's Corporation (MCD - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the quarter, MCD reported adjusted EPS of $2.95, outpacing the Zacks Consensus Estimate of $2.81. Adjusted earnings increased 11% from the prior-year quarter’s figure. Quarterly net revenues of $6.4 billion missed the consensus mark of $6.5 billion. The top line rose 8% year over year. The upside was backed by menu price increases, effective marketing campaigns and continued digital and delivery growth.
Yum China Holdings, Inc. (YUMC - Free Report) reported impressive fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
During the quarter, YUMC reported adjusted EPS of 25 cents, beating the Zacks Consensus Estimate of 13 cents. The bottom line surged 92.3% from 13 cents reported a year ago. Quarterly revenues of $2.5 billion outpaced the consensus mark of $2.4 billion. The top line rose 19.4% on a year-over-year basis. Excluding foreign currency translation, revenues increased 21% year over year. The upside can be attributed to net new unit contribution (12%) and same-store sales growth (4%).
Brinker International, Inc. (EAT - Free Report) reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. Effective marketing and pricing strategies backed the upside. Sequential improvements in guest traffic bode well.
During the quarter, EAT reported adjusted EPS of 99 cents, surpassing the Zacks Consensus Estimate of a loss of $1.47. The company reported an adjusted EPS of 76 cents per share in the prior-year quarter. Quarterly revenues of $1.07 billion missed the Zacks Consensus Estimate of $1.08 billion. The top line increased 5.4% on a year-over-year basis. EAT gained from Chili's solid performance.
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Cheesecake Factory (CAKE) Q4 Earnings Beat Estimates, Rise Y/Y
The Cheesecake Factory Incorporated (CAKE - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line increased from the prior-year quarter’s figure.
Earnings & Revenue Discussion
In the quarter under review, the company reported adjusted earnings per share (EPS) of 80 cents, beating the Zacks Consensus Estimate of 74 cents by 8.1%. In the year-ago period, the company reported adjusted EPS of 56 cents.
Quarterly revenues missed the consensus estimate of $877 million by 0.03%. The top line dropped 1.8% on a year-over-year basis.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
The Cheesecake Factory Incorporated price-consensus-eps-surprise-chart | The Cheesecake Factory Incorporated Quote
Solid Comps Growth Drives Q4 Results
In the reported quarter, comps at Cheesecake Factory restaurants rose 2.5% year over year (lower than our expectation of 4% growth) compared with 4% in the prior-year quarter. Comps rose 14% from 2019 levels. The upside was driven by improved traffic and a favorable menu mix.
For the 52-week ended Jan 2, 2024, comps at Cheesecake Factory restaurants increased 3% year over year compared with 7% growth reported a year ago.
North Italia comps rose 7% year over year compared with 9% in the year-ago quarter. The metric increased 34% compared with 2019 levels. Our model suggested the metric to rise 8.3% year over year.
Costs in Detail
The cost of food and beverage, as a percentage of revenues, declined 170 basis points (bps) year over year to 23% in the fiscal fourth quarter.
Labor expenses, as a percentage of total revenues, amounted to 35.2%, down 50 bps from the year-ago quarter’s levels. We expected the metric to be 35.7% of revenues in the quarter.
Other operating costs, as a percentage of total revenues, were 26.8%, up 20 bps from the prior-year quarter’s level. In the quarter, we anticipated the metric to be 26.4% of revenues.
General and administrative expenses accounted for 6.2% of revenues, down 10 bps year over year. Our model predicted the metric to be 6.1% of revenues in the fiscal fourth quarter.
In the fiscal fourth quarter, pre-opening expenses accounted for 1.1% of revenues, up 30 bps year over year.
Balance Sheet
As of Jan 2, 2024, Cheesecake Factory’s cash and cash equivalents totaled $56.3 million compared with $114.8 million at the end of the fiscal 2022. Long-term debt (net of issuance costs) was $470 million compared with $468 million as of fiscal 2022-end. As of Jan 2, the company had a total available liquidity of $292.8 million.
Management declared a quarterly cash dividend of 27 cents per share. The dividend will be payable on Mar 19 to shareholders of record as of Mar 6, 2024. In the fiscal fourth quarter, CAKE repurchased 318,400 shares for $9.8 million.
Store Developments
In the quarter under review, Cheesecake Factory opened nine new restaurants and registered solid demand. The openings included three Cheesecake Factory restaurants, three North Italia restaurants and three FRC restaurants. Internationally, the company opened two Cheesecake Factory restaurants under licensing agreements in China and Thailand. Subsequent to quarter-end, the company opened one North Italia restaurant, one Flower Child, one Culinary Dropout and one Cheesecake Factory restaurant (internationally under a licensing agreement in Mexico).
In fiscal 2024, the management expects to open 22 new restaurants. This includes three to four Cheesecake factories, six to seven North Italia's, six to seven Flower Child and six FRC restaurants.
Fiscal 2023 Highlights
Total revenues in fiscal 2023 amounted to $3.4 billion compared with $3.3 billion reported in fiscal 2022.
Adjusted net income in fiscal 2023 came in at $131.8 million compared with $76.2 million in fiscal 2022.
In fiscal 2023, adjusted EPS came in at $2.69 per share compared with $1.51 reported in the previous year.
Zacks Rank
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.
Recent Retail-Wholesale Releases
McDonald's Corporation (MCD - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the quarter, MCD reported adjusted EPS of $2.95, outpacing the Zacks Consensus Estimate of $2.81. Adjusted earnings increased 11% from the prior-year quarter’s figure. Quarterly net revenues of $6.4 billion missed the consensus mark of $6.5 billion. The top line rose 8% year over year. The upside was backed by menu price increases, effective marketing campaigns and continued digital and delivery growth.
Yum China Holdings, Inc. (YUMC - Free Report) reported impressive fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
During the quarter, YUMC reported adjusted EPS of 25 cents, beating the Zacks Consensus Estimate of 13 cents. The bottom line surged 92.3% from 13 cents reported a year ago. Quarterly revenues of $2.5 billion outpaced the consensus mark of $2.4 billion. The top line rose 19.4% on a year-over-year basis. Excluding foreign currency translation, revenues increased 21% year over year. The upside can be attributed to net new unit contribution (12%) and same-store sales growth (4%).
Brinker International, Inc. (EAT - Free Report) reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. Effective marketing and pricing strategies backed the upside. Sequential improvements in guest traffic bode well.
During the quarter, EAT reported adjusted EPS of 99 cents, surpassing the Zacks Consensus Estimate of a loss of $1.47. The company reported an adjusted EPS of 76 cents per share in the prior-year quarter. Quarterly revenues of $1.07 billion missed the Zacks Consensus Estimate of $1.08 billion. The top line increased 5.4% on a year-over-year basis. EAT gained from Chili's solid performance.