The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks. Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe ar ...

Company Performance - Cheesecake Factory shares have increased by 24.9% over the past month, reaching a new 52-week high of $50.75, and have gained 41.1% since the start of the year [1] - The company reported EPS of $0.58 in its last earnings report, exceeding the consensus estimate of $0.47, although it missed the revenue estimate by 0.06% [2] - For the current fiscal year, Cheesecake Factory is expected to post earnings of $3.30 per share on revenues of $3.57 billion, reflecting a 22.68% change in EPS and a 3.88% change in revenues [3] Valuation Metrics - Cheesecake Factory has a Value Score of A, a Growth Score of C, and a Momentum Score of B, resulting in a VGM Score of B [6] - The stock trades at 15X current fiscal year EPS estimates, below the peer industry average of 24.3X, and at 11.2X trailing cash flow compared to the peer group's average of 12.4X [7] - The stock has a PEG ratio of 1.36, indicating it is not among the top echelon of stocks from a value perspective [7] Zacks Rank - Cheesecake Factory holds a Zacks Rank of 2 (Buy) due to rising earnings estimates, which suggests potential for further price appreciation [8][9] Industry Comparison - The Retail - Restaurants industry is positioned in the top 29% of all industries, indicating favorable conditions for companies like Cheesecake Factory and Yum China [12]

Revenue Growth and Financial Performance - Revenues increased 4.3% to $865.5 million for the fiscal quarter ended October 1, 2024 compared to $830.2 million for the comparable prior year period[85] - Net income increased to 3.5% of revenues in Q3 2024 from 2.2% in Q3 2023[84] - Adjusted net income for the thirteen weeks ended October 1, 2024, was $28.18 million, compared to $19.03 million for the same period in 2023[117] - The company anticipates total revenue for fiscal 2024 to be approximately $3.57 billion, with a net income margin of approximately 4.5%[112][113] - Total revenues for Q4 fiscal 2024 are expected to be between $905 million and $915 million, with a net income margin of 4.8% to 4.9%[115] - Fiscal 2025 total revenue is anticipated to be approximately $3.75 billion, with a net income margin of around 4.75% at the mid-point of the estimated revenue[116] Restaurant Operations and Expansion - The company operates 344 restaurants in the US and Canada, including 215 The Cheesecake Factory locations, 40 North Italia locations, and 35 Flower Child locations[73] - The company plans to continue expanding The Cheesecake Factory, North Italia, and Flower Child concepts, with a focus on premier locations[75] - The company targets annual unit growth of 7% across its concepts, combined with comparable sales growth[81] - The company plans to open up to 22 new restaurants in fiscal 2024, including 3 The Cheesecake Factory, 6 North Italia, 6-7 Flower Child, and 8 Other FRC locations, with anticipated cash capital expenditures of $180 to $200 million[114] - The company expects to open up to 24 new restaurants in 2025, with cash capital expenditures of $190 to $210 million[118] - Preopening costs were $7.0 million in Q3 2024, with one Flower Child and three Other FRC locations opened during the quarter[98] Cost Management and Margins - Food and beverage costs decreased to 22.6% of revenues in Q3 2024 from 23.5% in Q3 2023[84] - Labor expenses decreased to 35.9% of revenues in Q3 2024 from 36.3% in Q3 2023[84] - Food and beverage costs as a percentage of revenues decreased to 22.6% in Q3 2024 from 23.5% in Q3 2023, primarily due to menu price increases exceeding inflation[92] - Labor expenses as a percentage of revenues decreased to 35.9% in Q3 2024 from 36.3% in Q3 2023, driven by menu price increases exceeding wage rate inflation[93] - The company has implemented menu price increases above historical levels to offset inflationary cost pressures, with future pricing actions potentially remaining above historical norms[78] Sales Performance by Concept - The Cheesecake Factory sales increased 3.1% to $647.8 million in Q3 2024 compared to $628.1 million in Q3 2023, with comparable sales up 1.6% driven by a 2.4% increase in average check[86] - North Italia sales increased 15.2% to $71.9 million in Q3 2024, with comparable sales up 2% driven by a 4% increase in average check, despite a 2% decline in customer traffic[87] - Flower Child sales increased 13.7% to $36.6 million in Q3 2024, with sales per restaurant operating week up 6.5% to $85,225[89] - Other FRC sales increased 14.3% to $67.0 million in Q3 2024, despite a 4.4% decline in average sales per restaurant operating week to $116,493[90] Financial Position and Liquidity - Cash flows from operations increased by $23.8 million in the first nine months of fiscal 2024 compared to the same period in 2023, primarily due to higher net income and increased accounts payables[121] - Capital expenditures for new restaurants in the first nine months of fiscal 2024 were $76.1 million, compared to $61.6 million in the same period in 2023[122] - The company repurchased 0.5 million shares at a cost of $17.5 million in the first nine months of fiscal 2024, compared to 1.1 million shares at a cost of $36.3 million in the same period in 2023[129] - The company had net availability for borrowings of $236.5 million under the Revolver Facility as of October 1, 2024[126] - The company believes its cash and cash equivalents, combined with expected cash flows from operations and available borrowings, will provide adequate liquidity for the next 12 months and the foreseeable future[131] Commodity and Supply Chain Risks - The company is negotiating short-term and long-term agreements for principal commodities like dairy and poultry, but these efforts may not yield intended benefits for fiscal 2025[138] - A hypothetical 1% increase in food costs would negatively impact cost of sales by $2.0 million in Q3 2024 and $1.9 million in Q3 2023[139] - Commodities not under contract are subject to significant supply and cost fluctuations, especially those regulated by governments like dairy and corn[139] - International market purchases are susceptible to cost and availability fluctuations due to currency values, trade disputes, tariffs, and geopolitical unrest[139] - The company may lack the ability to adjust menu prices or items in response to food commodity price increases[139] - Operating results in fiscal 2024 continue to be impacted by supply chain challenges and increased commodity and wage inflation[137] - Climate change may exacerbate factors like labor availability, weather, and natural disasters, further impacting product and service costs[137] Financial Risks and Hedging - A hypothetical 1% rise in interest rates would increase annual interest expense by $1.3 million based on outstanding borrowings as of October 1, 2024, and January 2, 2024[140] - A hypothetical 10% decline in the market value of deferred compensation assets would reduce net income by $2.8 million as of October 1, 2024, and $2.4 million as of January 2, 2024[140] - The company has no hedging contracts in place as of October 1, 2024[138] Tax and Impairment - The effective income tax rate increased to 5.8% in Q3 2024 from -5.5% in Q3 2023, primarily due to higher forecasted income before taxes[99] - The company recorded impairment of assets and lease terminations income of $3.5 million in Q3 2024, compared to an expense of $48,000 in Q3 2023[96]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, with the aim of buying high and selling higher, capitalizing on established price movements [1] Company Summary: Cheesecake Factory (CAKE) - CAKE currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance in the market [3] - Over the past week, CAKE shares increased by 8.99%, significantly outperforming the Zacks Retail - Restaurants industry, which rose by only 0.49% [5] - In a longer time frame, CAKE shares have increased by 28.2% over the past quarter and 47.38% over the last year, while the S&P 500 only moved 5.48% and 36.89% respectively [6] - The average 20-day trading volume for CAKE is 1,245,898 shares, indicating a bullish sign with rising stock prices [7] - Earnings estimates for CAKE have shown positive revisions, with 9 estimates moving higher in the past two months, raising the consensus estimate from $3.21 to $3.29 [9]

Momentum investing is essentially the opposite of the tried-and-tested Wall Street adage -- "buy low and sell high." Investors following this investing style typically avoid betting on cheap stocks and waiting long for them to recover. They believe instead that one could make far more money in lesser time by "buying high and selling higher." Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth p ...

Group 1 - The Cheesecake Factory Incorporated (NASDAQ: CAKE) had two successful public trades last year, with the second trade outlined in Fall 2023 yielding over 20% returns [1] - The company promotes a blended trading and investing approach to help clients significantly grow their wealth [1] - A promotional sale is currently available, allowing new members to save 75% compared to the regular price of $1,668, with the sale ending when three more members sign up [1] Group 2 - The company offers a money-back guarantee for new clients who are not satisfied, emphasizing a commitment to client success [2] - The messaging encourages potential clients to take action and start winning in their investment endeavors [2]

The Cheesecake Factory Incorporated (NASDAQ:CAKE) Q3 2024 Earnings Call October 29, 2024 5:00 PM ET Company Participants Etienne Marcus - Vice President, Investor Relations David Overton - Chairman and Chief Executive Officer David Gordon - President Matt Clark - Executive Vice President and Chief Financial Officer Conference Call Participants Jim Salera - Stephens Drew North - Baird Catherine Griffin - Bank of America Jeff Farmer - Gordon Haskett Karen Holthouse - Citi Jim Sanderson - Northcoast Research A ...

Cheesecake Factory (CAKE) reported $865.47 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 4.3%. EPS of $0.58 for the same period compares to $0.39 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $866.02 million, representing a surprise of -0.06%. The company delivered an EPS surprise of +23.40%, with the consensus EPS estimate being $0.47. While investors scrutinize revenue and earnings changes year-over-year and how they compa ...

Cheesecake Factory (CAKE) came out with quarterly earnings of $0.58 per share, beating the Zacks Consensus Estimate of $0.47 per share. This compares to earnings of $0.39 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 23.40%. A quarter ago, it was expected that this restaurant chain would post earnings of $1 per share when it actually produced earnings of $1.09, delivering a surprise of 9%. Over the last four quarters, the c ...

[Financial Highlights and Business Overview](index=1&type=section&id=Financial%20Highlights%20and%20Business%20Overview) [Third Quarter 2024 Financial Performance](index=1&type=section&id=Third%20Quarter%202024%20Financial%20Performance) The Cheesecake Factory achieved its fourth consecutive quarter of year-over-year growth in Q3 2024, with revenues and net income increasing Q3 Fiscal 2024 Key Financial Results | Financial Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total Revenues | $865.5 million | $830.2 million | | Net Income (GAAP) | $30.0 million | $17.9 million | | Diluted EPS (GAAP) | $0.61 | $0.37 | | Adjusted Net Income | $28.2 million | $19.0 million | | Adjusted Diluted EPS | $0.58 | $0.39 | - Comparable restaurant sales at The Cheesecake Factory restaurants increased by **1.6%** year-over-year in the third quarter of fiscal 2024[4](index=4&type=chunk) - The company recorded a pre-tax net income of **$2.5 million** from impairment of assets, lease termination income, and FRC acquisition-related expenses, resulting in an adjusted net income of **$28.2 million**[3](index=3&type=chunk) [Operational Highlights and Management Commentary](index=1&type=section&id=Operational%20Highlights%20and%20Management%20Commentary) Management highlighted strong operational execution and market share gains, driven by improved productivity, retention, and successful new restaurant openings - The company is capturing market share, evidenced by strong outperformance in comparable sales and traffic at The Cheesecake Factory restaurants compared to the broader casual dining industry[5](index=5&type=chunk) - Restaurant operations showed exceptional execution with significant improvements in labor productivity, hourly staff and manager retention, and guest satisfaction scores[5](index=5&type=chunk) - A total of **17** new restaurants have opened year-to-date, reinforcing confidence in achieving near-term and long-term development objectives[5](index=5&type=chunk) [Operational and Corporate Updates](index=2&type=section&id=Operational%20and%20Corporate%20Updates) [Restaurant Development](index=2&type=section&id=Development) The company continued its expansion, opening four new restaurants in Q3 and three post-quarter, targeting up to 22 new locations in fiscal 2024 - In Q3 2024, the company opened **four** new restaurants: one Flower Child and three other FRC locations[6](index=6&type=chunk) - Subsequent to the quarter-end, **three** additional restaurants were opened: one North Italia, one Flower Child, and one Blanco[6](index=6&type=chunk) - The company expects to open as many as **22** new restaurants in fiscal 2024, including up to **three** The Cheesecake Factory, **six** North Italia, and **six to seven** Flower Child locations[7](index=7&type=chunk) [Liquidity and Capital Allocation](index=2&type=section&id=Liquidity%20and%20Capital%20Allocation) As of October 1, 2024, the company maintained strong liquidity with $288.7 million available, alongside stock repurchases and dividend declarations Liquidity and Debt as of October 1, 2024 | Metric | Amount | | :--- | :--- | | Total Available Liquidity | $288.7 million | | Cash Balance | $52.2 million | | Revolving Credit Facility Availability | $236.5 million | | Total Principal Debt Outstanding | $475 million | - Repurchased approximately **29,450 shares** of stock for **$1.1 million** in Q3 2024[9](index=9&type=chunk) - The Board of Directors declared a quarterly dividend of **$0.27 per share**, payable on November 26, 2024[9](index=9&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated income statement for Q3 2024 shows significant year-over-year increases in revenues, income from operations, and net income Consolidated Income Statement Highlights (Q3 2024 vs Q3 2023, in millions) | Metric (13 Weeks Ended) | Oct 1, 2024 | Oct 3, 2023 | | :--- | :--- | :--- | | Revenues | $865.5 M | $830.2 M | | Income from Operations | $33.7 M | $19.0 M | | Net Income | $30.0 M | $17.9 M | | Diluted Net Income per Share | $0.61 | $0.37 | Consolidated Income Statement Highlights (39 Weeks Ended, in millions) | Metric (39 Weeks Ended) | Oct 1, 2024 | Oct 3, 2023 | | :--- | :--- | :--- | | Revenues | $2,660.7 M | $2,562.5 M | | Income from Operations | $131.7 M | $100.4 M | | Net Income | $115.6 M | $88.7 M | | Diluted Net Income per Share | $2.37 | $1.80 | [Selected Segment Information](index=5&type=section&id=Selected%20Segment%20Information) Segment data for Q3 2024 highlights The Cheesecake Factory as the primary revenue and profit driver, with North Italia also showing strong growth Segment Revenues (13 Weeks Ended Oct 1, 2024 vs Oct 3, 2023, in millions) | Segment | Q3 2024 Revenue | Q3 2023 Revenue | | :--- | :--- | :--- | | The Cheesecake Factory | $647.8 M | $628.1 M | | North Italia | $71.9 M | $62.4 M | | Other FRC | $67.0 M | $58.6 M | | Other | $78.9 M | $81.0 M | Segment Income from Operations (13 Weeks Ended Oct 1, 2024 vs Oct 3, 2023, in millions) | Segment | Q3 2024 Income | Q3 2023 Income | | :--- | :--- | :--- | | The Cheesecake Factory | $87.8 M | $67.6 M | | North Italia | $4.4 M | $4.1 M | | Other FRC | ($1.4 M) | $1.0 M | - At the end of the period, the company had **215** The Cheesecake Factory restaurants, **39** North Italia restaurants, and a total of **341** company-owned restaurants[17](index=17&type=chunk)[18](index=18&type=chunk) [Reconciliation of Non-GAAP Results to GAAP Results](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Results%20to%20GAAP%20Results) The company reconciled GAAP to non-GAAP results for Q3 2024, adjusting net income and diluted EPS to exclude non-recurring items Q3 2024 Reconciliation of GAAP to Non-GAAP Net Income | Description | Amount (in thousands) | | :--- | :--- | | Net income (GAAP) | $29,994 | | Impairment/lease termination (income) | ($3,472) | | Acquisition-related expenses | $1,020 | | Tax effect of adjustments | $638 | | **Adjusted net income (non-GAAP)** | **$28,180** | Q3 2024 Reconciliation of GAAP to Non-GAAP Diluted EPS | Description | Amount per Share | | :--- | :--- | | Diluted net income per share (GAAP) | $0.61 | | Impairment/lease termination (income) | ($0.07) | | Acquisition-related expenses | $0.02 | | Tax effect of adjustments | $0.01 | | **Adjusted net income per share (non-GAAP)** | **$0.58** |