Shares of Cheesecake Factory Inc. lost nearly 10 percent of their value Tuesday after the restaurateur announced an updated outlook for its second-quarter comparable sales.
The Calabasas company said it expects sales at its restaurants to decline 1 percent in the quarter, which will impact earnings per share.
“We have continued to outperform the casual dining industry quarter to date, with over half of our regions posting positive comparable sales for the period, including key markets of California, Texas and Florida,” Chief Executive David Overton said in a statement. “More broadly, however, we have seen heightened volatility in week-to-week sales trends, indicative of uncertainty on the part of many consumers. Specifically, we have seen pockets of softness as we moved through the quarter, notably in the East and Midwest where we also faced unfavorable weather that reduced patio usage.”
Overton also stated that the company is managing for the long term and he believes the Cheesecake brand is “as strong as ever.”
The company released the updated financial outlook before the market opened Tuesday. Cheesecake (CAKE) shares closed down $5.75, or 9.9 percent, to $52.58 on the Nasdaq.