Cheesecake Factory Inc. shares dropped 7 percent Wednesday morning after the casual dining chain reported a better-than-expected fourth quarter but provided a disappointing earnings forecast for this year.
The Calabasas company late Tuesday reported net income of $29.9 million (54 cents a share), compared with $21.9 million (36 cents) in the same period a year earlier. Revenue rose 15 percent to nearly $478 million, with same-store sales at its Cheesecake Factory and Grand Lux Cafe restaurants up 2.7 percent.
Excluding one-time items, net income was 53 cents a share. Analysts surveyed by Thomson Reuters on average expected the company to report adjusted net income of 52 cent a share on revenue of less than $472 million.
The company said it now expects to open seven or eight restaurants in the United States this year. In addition, the company expects as many as three restaurants will open in the Middle East this year under a license agreement.
“This year marks the beginning of our global expansion, which will be an important component to our future earnings potential, adding to our confidence that mid-teens earnings per share growth is a realistic and achievable goal going forward,” said Chief Executive David Overton in a statement.
However, the company expects to report first-quarter net income of only 34 cents to 36 cents a share, and full-year net income of $1.80 to $1.90 a share. That’s well below the Wall Street consensus of 46 cents a share for the current quarter and $2.12 a share for the full year. The company cited continued higher food, labor and tax costs.
Shares closed down $2.20, or 7 percent, to $29.37 on the Nasdaq.