Cheesecake Factory Profit Falls Short; Shares Slide

Wednesday, 24 Jul 2013 07:55 PM

 

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Cheesecake Factory Inc on Wednesday reported second-quarter profit that missed Wall Street's expectations because of softer-than-expected sales at established restaurants, and its shares fell almost 6 percent.

The California-based chain, known for its cheesecakes, said second-quarter net income was $28.6 million, or 52 cents per share, compared with $28.4 million, or 52 cents per share, a year ago.

Some of the biggest U.S. restaurant chains have been struggling with lackluster demand because of the tepid U.S. economic recovery. For example, McDonald's Corp, the world's biggest restaurant chain by sales, on Monday reported lower-than-expected profit for the quarter and forecast weakness for the rest of the year.

Excluding relocation charges, Cheesecake Factory earned 54 cents per share in the latest quarter, 3 cents short of analysts' average estimate, as compiled by Thomson Reuters I/B/E/S.

Revenue rose more than 3 percent to $470.1 million in the second quarter, bolstered by an overall gain in same-restaurant sales of 0.8 percent.

Sales at restaurants open at least 18 months rose 0.9 percent at the Cheesecake Factory and crept up 0.1 percent at Grand Lux Cafe, its smaller chain.

Analysts polled by Consensus Metrix had expected a 1.8 percent sales gain at Cheesecake Factory and a 0.7 percent rise at Grand Lux Cafe.

The company forecast third-quarter earnings per share of between 51 cents and 53 cents, on same-restaurant sales that are expected to be flat to up 1 percent.

The company now expects 2013 earnings of $2.10 and $2.15 per share. That assumes same-restaurant sales growth of between 1 percent and 1.5 percent.

Cheesecake Factory shares fell 5.7 percent, or $2.40, to $39.50 in after-market trading.

© 2014 Thomson/Reuters. All rights reserved.

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