Cheesecake Factory (CAKE) Q4 Earnings Lag Estimates, Fall Y/Y
Zacks Investment Research | Feb 19, 2020 10:36PM ET
The Cheesecake Factory Incorporated (NASDAQ:CAKE) 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
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.
Get The News You Want
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 Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.