The Cheesecake Factory Incorporated CAKE is scheduled to report fourth-quarter fiscal 2024 results on Feb. 19, 2025.

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In the last quarter, the company reported adjusted earnings per share (EPS) of 58 cents, which beat the Zacks Consensus Estimate of 47 cents by 23.4%. The bottom line increased 48.7% year over year.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 14.1%.

Trend in Estimate Revision of CAKE

The Zacks Consensus Estimate for fiscal fourth-quarter EPS has increased to 92 cents from 91 cents in the past seven days, indicating a rise of 15% from the year-ago quarter’s 80 cents.

The Cheesecake Factory Incorporated Price and EPS Surprise

The Cheesecake Factory Incorporated price-eps-surprise | The Cheesecake Factory Incorporated Quote

The consensus mark for revenues is pegged at $0.9 billion. The metric suggests growth of 4% from the year-ago quarter’s figure.

Factors Likely to Shape Cheesecake Factory’s Quarterly Results

Cheesecake Factory’s fiscal fourth-quarter revenues are likely to have increased year over year, driven by stable sales trends, strategic pricing actions and strong off-premise performance. The company’s ability to maintain high guest satisfaction and loyalty, supported by its rewards program and menu enhancements, is expected to have contributed to top-line growth. The company expects fiscal fourth-quarter total revenues to be in the range of $905 million to $915 million.

Strong contributions from North Italia Restaurants and Other FRC are likely to have aided the company’s performance in the fiscal fourth quarter. Our model predicts fiscal fourth quarter revenues from North Italia Restaurants and Other FRC to rise 21% and 14.1% year over year to $81.3 million and $80.9 million, respectively.

CAKE’s bottom line is anticipated to have improved year over year in the fourth quarter, aided by menu pricing, labor efficiency and commodity cost stabilization. With restaurant-level margins averaging 16.4% over the past four quarters, the company is within its long-term target range of 16%-18%.

Cost management strategies, such as optimizing labor productivity and reducing food waste, are expected to have contributed to margin expansion. In the fiscal fourth quarter, the company predicts an adjusted net income margin of 4.8% to 4.9%.

However, inflationary pressures on labor and continued wage rate adjustments might partially offset these gains. Additionally, pre-opening expenses associated with aggressive unit expansion could weigh on its fiscal fourth-quarter profitability. Our model predicts fiscal fourth quarter labor expenses to rise 4.5% year over year to $322.5 million.

What Our Model Says About CAKE Stock

Our proven model predicts an earnings beat for Cheesecake Factory this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

CAKE’s Earnings ESP: Brinker has an Earnings ESP of +2.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CAKE’s Zacks Rank: The company has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks With the Favorable Combination

Here are a few other stocks from the Zacks Retail-Wholesale sector, which, according to our model, also have the right combination of elements to post an earnings beat this reporting cycle.

Floor & Decor FND has an Earnings ESP of +5.28% and a Zacks Rank of 3 at present.

FND is expected to register a 26.5% year over year decrease in earnings for the to-be-reported quarter. It reported an earnings beat in each of the trailing four quarters, delivering an average surprise of 12.2%.

Home Depot HD currently has an Earnings ESP of +4.33% and a Zacks Rank of 3.

HD reported an earnings beat in each of the trailing four quarters, delivering an average surprise of 2.3%. Its earnings for the to-be-reported quarter are expected to grow 9.2% year over year.

Williams-Sonoma, Inc. WSM currently has an Earnings ESP of +1.36% and a Zacks Rank of 3.

WSM’s earnings for the to-be-reported quarter are expected to grow 5.5% year over year. It reported an earnings beat in each of the trailing four quarters, the average surprise being 17.8%.

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The Cheesecake Factory Incorporated (CAKE) : Free Stock Analysis Report

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