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What Awaits Cheesecake Factory's (CAKE) This Earnings Season?

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The Cheesecake Factory Incorporated (CAKE - Free Report) is scheduled to report fourth-quarter fiscal 2019 results on Feb 19. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by 9.3%. Its earnings beat estimates in three out of the trailing four quarters.

How Are Estimates Faring?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 61 cents, which suggests an increase from 60 cents registered in the year-ago quarter. Notably, the company’s earnings estimate for the quarter has been stable in the past 30 days. For quarterly revenues, the consensus mark is pegged at nearly $704 million. The figure suggests 20.3% increase from the prior-year quarter’s reported figure.

Let’s delve to find out how the company’s top and the bottom line will shape up in the upcoming quarterly release.

The Cheesecake Factory Incorporated Price and EPS Surprise

 

The Cheesecake Factory Incorporated Price and EPS Surprise

The Cheesecake Factory Incorporated price-eps-surprise | The Cheesecake Factory Incorporated Quote

 

Factors at Play

Cheesecake Factory’s fourth-quarter results are likely to have been impacted by surge in restaurant revenues, menu innovation, expansion strategy and digitalization. The Zacks Consensus Estimate for restaurant revenues is pegged at $545 million, which indicates 2.6% growth from the year-ago quarter’s reported figure.

In order to boost comps, the company is focusing on improving the speed of service and training its servers so that they render a higher level of service. Meanwhile, Cheesecake Factory’s technology-enabled initiatives have been successful with positive feedback on its mobile payment app — CakePay. Also, the company’s collaboration with DoorDash is reaping benefits owing to the incremental sales from its delivery service, nationwide. The company also continues to improve its to-go business including online ordering capability. This is a major contributor to the company’s strong off-premise sales channels.

Cheesecake Factory has been expanding in domestic as well as international markets. Of late, it is foraying into lucrative markets like the Middle East, North Africa, Central and Eastern Europe, Russia, Turkey, Mexico, Kuwait, Lebanon and Chile.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Pool this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. This is not the case here, as you will see below.

Earnings ESP: Cheesecake Factory has an Earnings ESP of 3.59%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

Stock With Favorable Combinations

Here are some companies in the Zacks Retail And Wholesale sector that investors may consider as our model shows that these have the right combination of elements to post earnings beat in the fourth quarter:

Rite Aid Corporation has an Earnings ESP of +33.33% and a Zacks Rank #1.

Papa John's International, Inc. (PZZA - Free Report) has an Earnings ESP of +0.79% and a Zacks Rank #2.

BJ's Restaurants, Inc. (BJRI - Free Report) has an Earnings ESP of +3.93% and a Zacks Rank #3.

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