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Tuesday, Oct 3, 2023

Extreme Weather Cuts Cheesecake Earnings

Cheesecake Factory Inc. posted rising fourth quarter profit on Wednesday but said extreme winter weather cut into its same-store sales. The Calabasas operator of casual dining restaurants reported net income of $33 million (62 cents a share) for the quarter ended Dec. 31, compared to $22 million (40 cents) in the same period a year earlier. Revenue rose 2 percent to $475 million. The company reported a net $3.8 million pre-tax credit primarily related to the relocation of two Cheesecake Factory restaurants. The credit boosted diluted per-share net income by about 4 cents. Excluding this item, net income was 57 cents a share. Analysts on average expected net income of 59 cents on revenue of about $484 million, according to Thomson Financial Network. Overall, comparable restaurant sales at the company’s 169 Cheesecake Factory outlets rose about 1 percent, while sales at its 11 Grand Lux Cafes fell about 1 percent. The company added that its overall same-store sales were reduced by 0.7 percent due to severe winter storms. Excluding this weather impact, comparable restaurant sales increased 1.6%. The company expects to open as many as a dozen company-owned restaurants this year, including five restaurants in the Middle East and Mexico under licensing agreements. “We continue to allocate capital effectively by investing in new restaurant development, maintaining our existing restaurants, and returning excess cash to shareholders,” said Chief Executive David Overton, in a prepared statement. For the year, Cheesecake reported net income of $114 million ($2.10), compared to $98 million ($1.78) in 2012. Revenue rose about 3.5 percent to $1.88 billion. Analysts on average expected earnings of $2.12 on revenue of $1.89 billion, according to Thomson Financial Network. Shares closed down 25 cents, or about half a percent, to $45.34 on the Nasdaq.

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