MW Cheesecake Factory says 'distinct, high-quality' dining is still in demand amid discounts elsewhere

By Bill Peters

Oppenheimer analysts say that two chains that Cheesecake Factory runs - North Italia and Flower Child - are 'crown-jewel-like growth assets'

Cheesecake Factory Inc. on Wednesday reported fourth-quarter profit and revenue that were above expectations, amid demand for what executives called "distinct, high-quality dining experiences."

Shares $(CAKE)$ of the restaurant chain were up 0.7% after hours on Wednesday.

The company - known for its decadent interiors and vast menus - reported fourth-quarter net income of $41.2 million, or 83 cents a share, compared with $12.7 million, or 26 cents a share, in the same period last year.

Adjusted for impairments and lease-termination costs, Cheesecake Factory earned $1.04 a share. Revenue was $921 million, up from $877 million in the prior-year quarter, with same-store sales at its namesake restaurants up 1.7%.

Analysts polled by FactSet expected adjusted earnings of 92 cents a share, on revenue of $912.9 million and a 2% same-store sales gain.

"Consumer demand for the distinct, high-quality dining experiences we provide our guests across our experiential concepts reinforces our confidence in the long-term growth potential of our portfolio," Chief Executive David Overton said in a statement.

"We continued to capture market share, as demonstrated by the ongoing outperformance in comparable sales and traffic at the Cheesecake Factory restaurants versus the broader casual-dining industry," he continued.

As of Wednesday's close, shares of the chain were up 58.6% over the past 12 months.

The company reported the results after price hikes in restaurants - partly due to higher labor and food costs - turned off many inflation-weary diners last year.

Those increases drove the fast-food industry into a discount war, as chains tried to win back consumers, and led to gains last year for fast-casual chains like Chipotle Mexican Grill Inc. $(CMG)$ and Cava Group Inc. $(CAVA)$, where people found they could get higher-quality food for only a slightly higher price comparatively.

Full-service restaurants, including the casual-dining segment that Cheesecake Factory does business in, "were less likely to report success with value offerings in 2024," according to a recent report from the National Restaurant Association.

Still, Oppenheimer analysts, in a research note last week, said that two chains that Cheesecake Factory runs - North Italia and Flower Child - were "crown-jewel-like growth assets."

-Bill Peters

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 19, 2025 17:19 ET (22:19 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.