Cheesecake Factory (CAKE) Stock Up On Q3 Earnings Beat
Zacks Investment Research | Oct 26, 2016 11:18PM ET
Shares of The Cheesecake Factory Inc. (NASDAQ:CAKE) rallied over 8% in after-hour trading on Oct 26, after the company reported better-than-expected third-quarter fiscal 2016 results.
Notably, the company also raised its earnings guidance for full-year fiscal 2016.
Earnings and Revenue Discussion
The company's adjusted earnings per share (EPS) of 70 cents beat the Zacks Consensus Estimate of 61 cents by 14.8% and increased 18.6% year over year on the back of a higher top line and lower share count.
Sales of $560.0 million surpassed the Zacks Consensus Estimate of $556 million by 0.7% and were up 6.3% on a year-over-year basis.
Inside the Headlines
Comps at Cheesecake Factory restaurants increased 1.7%, higher than 0.3% growth registered last quarter but lower than the year-ago quarter growth of 2.2%. Menu price increase of 2.6% and positive mix of 0.5% drove comps, partly offset by a 1.4% decline in traffic.
Cost of sales ratio decreased 90 basis points (bps) year over year to 23.0%. This was primarily attributable to lower seafood, groceries, dairy and poultry costs. Labor expense ratio was 33.3%, 60 bps higher year over year due to high hourly wages.
General and administrative expenses accounted for 6.4% of revenues in the third quarter as compared to the prior-year quarter level of 6.3%. Pre-opening expenses were roughly $2 million, down nearly 54% year over year.
CHEESECAKE FACT Price, Consensus and EPS Surprise
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