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Saturday, Sep 23, 2023

Profit Dips at Cheesecake

Cheesecake Factory Inc. said Wednesday that same-store sales rose at most of its outlets during the fiscal first quarter but poor weather cut into profits, which did not meet Wall Street forecasts. The Calabasas operator of casual dining restaurants reported net income of $22.5 million (43 cents a share) in the quarter ended April 1, compared to $25.3 million (48 cents) in the same period a year earlier. Revenue rose about 4 percent to $481 million. Analysts on average expected net income of 49 cents on revenue of about $478 million, according to Thomson Financial Network. The company said comparable restaurant sales at its 169 Cheesecake Factory outlets rose 1.2 percent, while they declined by 2.9 percent at 11 Grand Lux Cafés, which were particularly affected by severe winter storms. It also reported higher operating costs that reduced profit. Chief Executive David Overton said he was pleased by the overall performance. “The strength of our sales performance was broad-based, with positive comparable sales in each of our markets, outside of the areas impacted by the harsh winter storms,” he said in a statement. The company also recorded a pre-tax charge of $186,000 due to a planned relocation of one of the chain’s restaurants. In its earnings, the company also declared a quarterly cash dividend of 14 cents a share, payable on May 20 to shareholders of record as of May 7. In addition, the company repurchased 2.1 million shares of its common stock at a cost of $99 million. The company opened one new Cheesecake restaurant in the quarter and expects to open as many as 10 company-owned restaurants in the year, in addition to as many as three to four restaurants in the Middle East and Mexico under licensing agreements. Shares lost $1.20, or 2.5 percent, to close at $46.80 on the Nasdaq.

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