San Fernando Valley Business Journal

Restaurant Closures Hurt Cheesecake Earnings

By Elliot Golan Wednesday, February 20, 2013

Cheesecake Factory Inc. reported lower profits in its fiscal fourth quarter, largely due to three restaurant closures, as it narrowly missed Wall Street projections.

The Calabasas operator of casual dining restaurants reported net income of $22.1 million (40 cents a share) in the quarter ended Jan. 1, compared to $29.9 million (55 cents) in the same period a year earlier. Revenue fell 2.7 percent to $465 million.

The company recorded a pre-tax charge of $9.5 million due to the closing of three Grand Lux Cafe restaurants and the poor performance of a Cheesecake outlet. The charge lowered per share net income by 11 cents.

Excluding the charge, the company missed analyst profit forecasts of 52 cents a share by a penny, according to Thomson Financial.

Overall, comparable restaurant sales at Cheesecake Factory and Grand Lux Cafe outlets rose 0.9 percent, despite lower foot traffic on the East Coast due to Hurricane Sandy, the company said.

“The fourth quarter marks the twelfth consecutive quarter in which we delivered positive comparable restaurant sales,” said Chief Executive David Overton, in a statement.

Earlier this week, the company announced the promotion of two top executives following the resignation of its president. David M. Gordon was named president of the Calabasas-based casual dining chain replacing Michael Jannini.

For the full year, the company reported net income of $98.4 million ($1.85 a share) on revenue of $1.81 billion. The company operates 177 restaurants.

Shares lost 22 cents, or less than 1 percent, to close at $33.10 on the Nasdaq.