Cheesecake Factory Inc. said that its first quarter profit beat Wall Street's expectations as more patrons came to its upscale casual restaurants and spent more money at each visit. But shares fell as revenue growth was just shy of forecasts.
After the Wednesday markets closed, the Calabasas restaurant chain reported net income of $20.5 million (34 cents per share), up from $18.7 million (31 cents) a year earlier. Revenue rose 3.3 percent to less than $419 million.
Analysts surveyed by Thomson Reuters on average expected the company to report per-share profit of 33 cents, but expected roughly $100,000 more in revenue than the company reported.
Overall sales at restaurants open at least 18 months were up 1.6 percent due to increased sales at its flagship restaurants. Sales at Cheesecake Factory restaurants open at least one year rose 2.1 percent, but were down 3.8 percent at Grand Lux Cafe restaurant. This was the fifth consecutive quarter of positive sales and rising traffic at established locations overall.
The company said during a conference call with analysts that it was able to keep operating margins at 7.1 percent, flat with the prior year in spite of 70 basis points of food cost pressure.
“Overall, we're pleased with the broad-based direction and trends we're seeing in our business,” Chief Executive David Overton said. “In spite of the pressure from rising food cost during the quarter, we achieved operating margins that were constant with last year and delivered earnings growth that exceeded our plan.”
Shares closed down $1.18, or 3.8 percent, to $29.42 on the Nasdaq.
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