Calabasas restaurant operator Cheesecake Factory outperformed analysts’ earnings expectations for its second financial quarter despite posting a loss.
Cheesecake Factory reported an adjusted net loss of $46 million, or -87 cents a share, for the quarter ended June 30. Analysts expected a loss of $1.11 a share, according to Yahoo Finance.
Revenue was $296 million, down more than 50 percent from $602 million in the same quarter last year. Analysts expected revenue of $307 million.
The earnings report, released late Thursday, attributes the performance to the impact of COVID-19. Sales at its restaurants dropped nearly 57 percent in the second quarter, the company said.
In a statement, Chief Executive David Overton said locations that have reopened their dining rooms in any capacity are enjoying “strong pent-up demand.”
“Our large restaurant footprints and flexible seating layouts are enabling us to capture meaningful sales levels despite capacity restrictions,” he said.
About 71 percent of the company’s restaurants, including 146 Cheesecake Factory locations, have reopened indoor dining rooms in accordance with local mandates. Twenty-two are still operating an off-premise-only model, and 16 are temporarily closed.
The company said that its reopened indoor dining rooms have recaptured about 80 percent of prior year sales levels.
As for its balance sheet, Cheesecake Factory specified it has repaid a majority of its deferred rent payments through July. The company made headlines in March for publicly notifying its landlords it wouldn’t be able to make April rent payments.
“We have managed the business well in this dynamic environment, with strength across our restaurant-level key performance indicators, including food efficiency, labor productivity and controllable profit. This enabled us to exit the second quarter in a solid financial position, with a strong cash balance,” Overton added.
Shares of Cheesecake Factory (CAKE) fell $1.44 or about 5.7 percent to $24 on Friday, a day when the major stock exchanges were up.