We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
Why Is Cheesecake Factory (CAKE) Down 6.9% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Cheesecake Factory (CAKE - Free Report) . Shares have lost about 6.9% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Cheesecake Factory due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for The Cheesecake Factory Incorporated before we dive into how investors and analysts have reacted as of late.
Cheesecake Factory reported second-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. Both top and bottom lines increased from the prior-year quarter’s figures.
The company attributed its strong second-quarter performance to strong consumer demand, operational excellence, and strategic innovation in its menu. This focus has directly supported improved guest satisfaction scores, which resulted in record-high revenue, increased margin, and profitability that exceeded the guidance.
While upholding the brand's dedication to quality and value in a highly competitive marketplace, management emphasized that operational strength and focused execution were crucial to margin improvement. On the marketing front, the company’s recent menu update — featuring over 14 new items across two innovative categories — generated significant traffic growth, resulting in sales momentum, strong financial and operational performance with record revenues, continued margin expansion, and earnings growth.
CAKE’s Q2 Earnings & Revenue Discussion
For the quarter under review, the company reported adjusted earnings per share (EPS) of $1.16, beating the Zacks Consensus Estimate of $1.06 by 9.4%. In the year-ago period, it reported adjusted EPS of $1.09 per share.
Quarterly revenues of $956 million beat the consensus estimate of $947 million by 0.9%. The top line increased 5.7% on a year-over-year basis.
CAKE’s Q2 Comps
In the reported quarter, comps at Cheesecake Factory restaurants inched up 1.2% year over year compared to a 1.4% rise reported in the prior-year quarter. North Italia comps declined 1% year over year against 2% growth reported in the year-ago quarter.
CAKE’s Costs in Detail
The cost of food and beverage, as a percentage of revenues, contracted 70 basis points (bps) year over year to 21.6% in the fiscal first quarter.
Labor expenses, as a percentage of total revenues, amounted to 34.9%, down 20 bps year over year.
Other operating costs, as a percentage of total revenues, were 26.8%, up 40 bps year over year. In the quarter
General and administrative expenses accounted for 6.1% of revenues, up 10 bps year over year.
In the fiscal second quarter, pre-opening expenses accounted for 0.9% of revenues, up 10 bps year over year.
Balance Sheet of CAKE
As of July 1, 2025, Cheesecake Factory’s cash and cash equivalents totaled $148.7 million compared with $84.1 million as of 2024-end. Long-term debt (net of issuance costs) was $628.2 million compared with $452.1 million as of Dec. 31, 2024. As of July 1, 2025, the company had a total available liquidity of $515.3 million.
Management declared a quarterly cash dividend of 27 cents per share. The dividend will be payable on Aug. 26 to its shareholders of record as of Aug. 12, 2025. In the fiscal second quarter, CAKE repurchased approximately 2.5 million shares for $0.1 million.
CAKE’s Store Developments
In the second quarter of fiscal 2025, the company expanded its footprint with eight new restaurant openings, including two Cheesecake Factory restaurants, one North Italia, three Flower Child, and two FRC restaurants. Toward the quarter’s end, it opened one FRC restaurant and one international Cheesecake Factory restaurant in Mexico.
In 2025, the company anticipates accelerating growth by adding up to 25 restaurants and two Cheesecake Factory restaurants to open internationally under a licensing agreement across its portfolio.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates revision.
VGM Scores
At this time, Cheesecake Factory has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cheesecake Factory has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Cheesecake Factory (CAKE) Down 6.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Cheesecake Factory (CAKE - Free Report) . Shares have lost about 6.9% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Cheesecake Factory due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for The Cheesecake Factory Incorporated before we dive into how investors and analysts have reacted as of late.
Cheesecake Factory Q2 Earnings & Revenues Beat Estimates
Cheesecake Factory reported second-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. Both top and bottom lines increased from the prior-year quarter’s figures.
The company attributed its strong second-quarter performance to strong consumer demand, operational excellence, and strategic innovation in its menu. This focus has directly supported improved guest satisfaction scores, which resulted in record-high revenue, increased margin, and profitability that exceeded the guidance.
While upholding the brand's dedication to quality and value in a highly competitive marketplace, management emphasized that operational strength and focused execution were crucial to margin improvement. On the marketing front, the company’s recent menu update — featuring over 14 new items across two innovative categories — generated significant traffic growth, resulting in sales momentum, strong financial and operational performance with record revenues, continued margin expansion, and earnings growth.
CAKE’s Q2 Earnings & Revenue Discussion
For the quarter under review, the company reported adjusted earnings per share (EPS) of $1.16, beating the Zacks Consensus Estimate of $1.06 by 9.4%. In the year-ago period, it reported adjusted EPS of $1.09 per share.
Quarterly revenues of $956 million beat the consensus estimate of $947 million by 0.9%. The top line increased 5.7% on a year-over-year basis.
CAKE’s Q2 Comps
In the reported quarter, comps at Cheesecake Factory restaurants inched up 1.2% year over year compared to a 1.4% rise reported in the prior-year quarter.
North Italia comps declined 1% year over year against 2% growth reported in the year-ago quarter.
CAKE’s Costs in Detail
The cost of food and beverage, as a percentage of revenues, contracted 70 basis points (bps) year over year to 21.6% in the fiscal first quarter.
Labor expenses, as a percentage of total revenues, amounted to 34.9%, down 20 bps year over year.
Other operating costs, as a percentage of total revenues, were 26.8%, up 40 bps year over year. In the quarter
General and administrative expenses accounted for 6.1% of revenues, up 10 bps year over year.
In the fiscal second quarter, pre-opening expenses accounted for 0.9% of revenues, up 10 bps year over year.
Balance Sheet of CAKE
As of July 1, 2025, Cheesecake Factory’s cash and cash equivalents totaled $148.7 million compared with $84.1 million as of 2024-end. Long-term debt (net of issuance costs) was $628.2 million compared with $452.1 million as of Dec. 31, 2024. As of July 1, 2025, the company had a total available liquidity of $515.3 million.
Management declared a quarterly cash dividend of 27 cents per share. The dividend will be payable on Aug. 26 to its shareholders of record as of Aug. 12, 2025. In the fiscal second quarter, CAKE repurchased approximately 2.5 million shares for $0.1 million.
CAKE’s Store Developments
In the second quarter of fiscal 2025, the company expanded its footprint with eight new restaurant openings, including two Cheesecake Factory restaurants, one North Italia, three Flower Child, and two FRC restaurants. Toward the quarter’s end, it opened one FRC restaurant and one international Cheesecake Factory restaurant in Mexico.
In 2025, the company anticipates accelerating growth by adding up to 25 restaurants and two Cheesecake Factory restaurants to open internationally under a licensing agreement across its portfolio.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates revision.
VGM Scores
At this time, Cheesecake Factory has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cheesecake Factory has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.