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The Cheesecake Factory Incorporated

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Cheesecake Factory restaurants have posted positive comps in 25 consequent quarters. Notably, the company’s differentiated menu, operational distinction and unique ambiance appeals to customers. Going forward, various initiatives to boost sales and traffic volumes like roll out of an improved server training program and its mobile payment app coupled with menu innovation should aid in keeping up the trend of positive comps. In fact, due to the positive comps trend, the company raised its earnings guidance for 2016 at its first-quarter conference call. Further, the company’s focus on improving margins and its cash deployment policy also bode well. However, as the company strives to expand its presence worldwide, pre-opening expenses would raise costs and hurt margins. Moreover, soft consumer spending and continued sluggish performance in Grand Lux Cafe raise concern. 


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