The Cheesecake Factory Inc Earnings: Here’s Why the Stock is Falling Now

The Cheesecake Factory Incorporated (NASDAQ:CAKE) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 5.73%.

The Cheesecake Factory Incorporated Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 5.88% to $0.54 in the quarter versus EPS of $0.51 in the year-earlier quarter.

Revenue: Rose 3.38% to $470.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: The Cheesecake Factory Incorporated reported adjusted EPS income of $0.54 per share. By that measure, the company missed the mean analyst estimate of $0.57. It missed the average revenue estimate of $473.36 million.

Quoting Management: “We delivered our 14th consecutive quarter of positive comparable sales in the second quarter, and we continued to outperform the industry. Our strategy is to leverage the strength of our brand to drive sales at full margins. We can accomplish this because our concept is highly differentiated, relevant to consumer tastes and preferences, and we execute very well on food and service,” said David Overton, Chairman and Chief Executive Officer. “We increased our operating margins, as we make ongoing progress toward recapturing our peak margin levels. Our improvement in profitability was accomplished while maintaining excellent guest satisfaction scores, delivering the high quality, consistent dining experience that we are known for,” continued Overton.

Key Stats (on next page)…

Revenue increased 1.53% from $463.02 million in the previous quarter. EPS increased 14.89% from $0.47 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.54 and has not changed. For the current year, the average estimate has moved up from a profit of $2.15 to a profit of $2.16 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)