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Cheesecake Factory (CAKE) Q4 Earnings Lag Estimates, Fall Y/Y
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The Cheesecake Factory Incorporated (CAKE - Free Report) reported fourth-quarter fiscal 2019 results wherein both earnings and revenues missed the Zacks Consensus Estimate. Following lower-than-expected results, shares of the company declined 3.4% in after-hours trading on Feb 19.
In the quarter under review, adjusted earnings came in at 58 cents per share, lagging the Zacks Consensus Estimate of 61 cents. Moreover, the bottom line dipped 7.9% from the prior-year number. This downside was primarily attributed to higher operating and acquisition-related costs.
Let’s take a closer look at the numbers.
Detailed Revenue Discussion
Total revenues of $694 million in the reported quarter missed the Zacks Consensus Estimate of $704 million. However, the top line improved 18.6% year over year on the back of increased comparable sales.
Comps at Cheesecake Factory restaurants slipped to 0.6% growth from the 1.9% rise in the year-ago quarter.
The Cheesecake Factory Incorporated Price, Consensus and EPS Surprise
Cost of sales ratio decreased 20 bps year over year to 22.8% in the fourth quarter. Meanwhile, the labor expense ratio was 36.2%, up 40 bps from the year-ago quarter.
Other operating costs represented 26% of revenues, up 200 bps from the year-ago quarter. General and administrative (G&A) expenses accounted for 6.8% of revenues, up 50 bps from the prior-year quarter. However, in the fourth quarter, pre-opening expenses were flat at 0.9% year over year.
Balance Sheet
As of Dec 31, 2019, Cheesecake Factory’s cash and cash equivalents totaled $65.4 million compared with $26.6 million as of Jan 1, 2019.
In the fiscal fourth quarter, the company repurchased approximately 10,000 shares of its common stock for $0.4 million. In 2019, Cheesecake Factory bought back 1.1 million shares of common stock for $51 million.
The company’s board of directors declared a quarterly cash dividend of 36 cents per share of the common stock. The new dividend is payable Mar 20, 2020 to its shareholders of record at the close of business on Mar 9, 2020.
Developmental Details
In fiscal 2020, Cheesecake Factory anticipates opening 20 new restaurants including six Cheesecake Factory locations, six North Italia restaurants and eight restaurants within the FRC subsidiary. It also expects to launch four Cheesecake Factory restaurants internationally under licensing agreements
2019 Highlights
Total revenues of $ 2,482.7 million were up 6.4% year over year.
Adjusted earnings per share (EPS) for the year ended Dec 31, 2019 was reported at $2.61 compared with $2.51 as on Jan 1, 2019.
In fiscal 2019, Comps at Cheesecake Factory restaurants slid to 0.8% rise from growth of 1.7% a year ago.
Q1 Outlook
For the first quarter, adjusted EPS is estimated to be 69-74 cents based on anticipated comps growth of 1-2% at Cheesecake Factory restaurants. Total revenues for The Cheesecake Factory restaurants are estimated in the range of $715-$720 million.
Fiscal 2020 Guidance
For the fiscal 2020, Cheesecake Factory expects earnings of $2.70-$2.86 per share. Its mid-point of $2.78 is above the current Zacks Consensus Estimate of $2.73. Meanwhile, the company expects comps to grow in the range of 1-2%. Total revenues for fiscal 2020 are estimated at $2.9 billion.
Some better-ranked stocks in the same space are Brinker International, Inc. (EAT - Free Report) , Good Times Restaurants Inc. (GTIM - Free Report) and Chipotle Mexican Grill, Inc. (CMG - Free Report) , all carrying a Zacks Rank #2 (Buy).
Current-year earnings for Brinker International and Good Times Restaurants are expected to rise 10.2% and 10.5%, respectively.
Chipotle Mexican Grill has an expected three-five year EPS growth rate of 19.3%.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Cheesecake Factory (CAKE) Q4 Earnings Lag Estimates, Fall Y/Y
The Cheesecake Factory Incorporated (CAKE - Free Report) reported fourth-quarter fiscal 2019 results wherein both earnings and revenues missed the Zacks Consensus Estimate. Following lower-than-expected results, shares of the company declined 3.4% in after-hours trading on Feb 19.
In the quarter under review, adjusted earnings came in at 58 cents per share, lagging the Zacks Consensus Estimate of 61 cents. Moreover, the bottom line dipped 7.9% from the prior-year number. This downside was primarily attributed to higher operating and acquisition-related costs.
Let’s take a closer look at the numbers.
Detailed Revenue Discussion
Total revenues of $694 million in the reported quarter missed the Zacks Consensus Estimate of $704 million. However, the top line improved 18.6% year over year on the back of increased comparable sales.
Comps at Cheesecake Factory restaurants slipped to 0.6% growth from the 1.9% rise in the year-ago quarter.
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 sales ratio decreased 20 bps year over year to 22.8% in the fourth quarter. Meanwhile, the labor expense ratio was 36.2%, up 40 bps from the year-ago quarter.
Other operating costs represented 26% of revenues, up 200 bps from the year-ago quarter. General and administrative (G&A) expenses accounted for 6.8% of revenues, up 50 bps from the prior-year quarter. However, in the fourth quarter, pre-opening expenses were flat at 0.9% year over year.
Balance Sheet
As of Dec 31, 2019, Cheesecake Factory’s cash and cash equivalents totaled $65.4 million compared with $26.6 million as of Jan 1, 2019.
In the fiscal fourth quarter, the company repurchased approximately 10,000 shares of its common stock for $0.4 million. In 2019, Cheesecake Factory bought back 1.1 million shares of common stock for $51 million.
The company’s board of directors declared a quarterly cash dividend of 36 cents per share of the common stock. The new dividend is payable Mar 20, 2020 to its shareholders of record at the close of business on Mar 9, 2020.
Developmental Details
In fiscal 2020, Cheesecake Factory anticipates opening 20 new restaurants including six Cheesecake Factory locations, six North Italia restaurants and eight restaurants within the FRC subsidiary. It also expects to launch four Cheesecake Factory restaurants internationally under licensing agreements
2019 Highlights
Total revenues of $ 2,482.7 million were up 6.4% year over year.
Adjusted earnings per share (EPS) for the year ended Dec 31, 2019 was reported at $2.61 compared with $2.51 as on Jan 1, 2019.
In fiscal 2019, Comps at Cheesecake Factory restaurants slid to 0.8% rise from growth of 1.7% a year ago.
Q1 Outlook
For the first quarter, adjusted EPS is estimated to be 69-74 cents based on anticipated comps growth of 1-2% at Cheesecake Factory restaurants. Total revenues for The Cheesecake Factory restaurants are estimated in the range of $715-$720 million.
Fiscal 2020 Guidance
For the fiscal 2020, Cheesecake Factory expects earnings of $2.70-$2.86 per share. Its mid-point of $2.78 is above the current Zacks Consensus Estimate of $2.73. Meanwhile, the company expects comps to grow in the range of 1-2%. Total revenues for fiscal 2020 are estimated at $2.9 billion.
Zacks Rank & Stocks to Consider
Cheesecake Factory carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the same space are Brinker International, Inc. (EAT - Free Report) , Good Times Restaurants Inc. (GTIM - Free Report) and Chipotle Mexican Grill, Inc. (CMG - Free Report) , all carrying a Zacks Rank #2 (Buy).
Current-year earnings for Brinker International and Good Times Restaurants are expected to rise 10.2% and 10.5%, respectively.
Chipotle Mexican Grill has an expected three-five year EPS growth rate of 19.3%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>