Core Insights - Zacks Premium offers tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Style Scores [1][4] - The Zacks Style Scores categorize stocks into Value, Growth, Momentum, and VGM Scores, helping investors identify stocks with the potential to outperform the market [2][3] Zacks Style Scores - **Value Score**: Focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [2] - **Growth Score**: Analyzes projected earnings and sales to find stocks with sustainable growth potential [2] - **Momentum Score**: Utilizes price trends and earnings estimate changes to identify high-momentum stocks [2] - **VGM Score**: Combines Value, Growth, and Momentum Scores to highlight stocks with the best overall potential [3] Zacks Rank - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investment decisions, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988 [4] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [5] Company Spotlight: Cheesecake Factory (CAKE) - As of October 3, 2023, Cheesecake Factory operates 325 restaurants in the U.S. and Canada, including various brands [6] - CAKE holds a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating solid performance potential [6] - The company is projected to achieve year-over-year earnings growth of 13.4% for the current fiscal year, with upward revisions from six analysts [6]

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The Cheesecake Factory Incorporated (CAKE) reported mixed fourth-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line increased from the prior-year quarter’s figure.Earnings & Revenue DiscussionIn the quarter under review, the company reported adjusted earnings per share (EPS) of 80 cents, beating the Zacks Consensus Estimate of 74 cents by 8.1%. In the year-ago period, the company reported adju ...

Financial Data and Key Metrics Changes - The company reported fourth quarter revenues of $877 million, with comparable sales at Cheesecake Factory restaurants up 2.5% year-over-year and 14% compared to 2019, outperforming the casual dining industry [7][10] - Adjusted net income margin for the fourth quarter was 4.5%, exceeding the guidance of 4.25% [10] - Total revenues for the fiscal year reached $3.44 billion, a 6.7% increase over 2022 after excluding the impact of an additional week in fiscal 2022 [10][11] - Fourth quarter GAAP diluted net income per share was $0.26, while adjusted diluted net income per share was $0.80 [14] Business Line Data and Key Metrics Changes - Total sales at Cheesecake Factory restaurants were $658 million, with comparable sales increasing 2.5% year-over-year and 14% compared to 2019 [11] - North Italia reported total sales of $67.2 million, with fourth quarter comparable sales increasing 7% from the prior year and 34% versus 2019 [12] - Other FRC sales totaled $70.9 million, while Flower Child sales were $30.4 million [12] Market Data and Key Metrics Changes - Off-premise sales accounted for 22% of total sales in the fourth quarter, consistent with the full year percentage [12] - The company experienced stability in on-premise incident rates, remaining above 2019 levels [11] Company Strategy and Development Direction - The company plans to open as many as 22 new restaurants in 2024, including 3 to 4 Cheesecake Factory locations and 6 to 7 each of North Italia, Flower Child, and FRC restaurants [9][19] - The focus remains on leveraging competitive strengths, differentiated brands, and best-in-class operators to drive shareholder value and market share gains [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's health, citing stabilizing top-line trends, improving profit margins, and normalizing input costs [20] - For Q1 2024, total revenues are anticipated to be between $875 million and $895 million, assuming no material operating or consumer disruptions [16] - The company expects full year revenues for fiscal 2024 to be approximately $3.6 billion, with a net income margin of about 4.25% [19] Other Important Information - The company ended the quarter with total available liquidity of approximately $293 million, including a cash balance of about $56 million [14] - The Cheesecake rewards program is seeing early demand exceeding internal expectations, with a focus on member engagement and acquisition tactics [15] Q&A Session Summary Question: Can you comment on the updated annual guidance compared to last quarter? - Management indicated that nothing has changed fundamentally, and the guidance reflects a prudent approach considering recent weather trends [22][23] Question: Can you elaborate on labor productivity and potential improvements for 2024? - Management noted improvements in labor productivity due to better retention and stability in the labor environment, which is expected to continue into 2024 [25][26] Question: How is the Cheesecake Factory business performing in terms of check and traffic components? - Traffic was flat in Q4, representing a 1% improvement over Q3, with pricing coming down as the company exited one-time pricing from the previous year [30] Question: What are the expectations for restaurant margins in 2024? - Management expects to expand restaurant level margins by 50 to 75 basis points in 2024, driven by productivity and efficiency gains [39] Question: How is the company addressing the impact of the California FAST Act legislation? - Management stated that the impact is still uncertain, but they believe they have sufficient pricing power to defend margins in California [44][45] Question: Can you provide insights on the unit growth plan for 2024? - The company plans to open 22 new restaurants, with some relocations factored into the growth plan [58][59]

For the quarter ended December 2023, Cheesecake Factory (CAKE) reported revenue of $877.01 million, down 1.8% over the same period last year. EPS came in at $0.80, compared to $0.56 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $877.31 million, representing a surprise of -0.03%. The company delivered an EPS surprise of +8.11%, with the consensus EPS estimate being $0.74.While investors scrutinize revenue and earnings changes year-over-year and how they compare with ...

Cheesecake Factory (CAKE) came out with quarterly earnings of $0.80 per share, beating the Zacks Consensus Estimate of $0.74 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 8.11%. A quarter ago, it was expected that this restaurant chain would post earnings of $0.42 per share when it actually produced earnings of $0.39, delivering a surprise of -7.14%.Over the last four quarters, t ...

Core Insights - The Cheesecake Factory reported total revenues of $877.0 million for Q4 fiscal 2023, a decrease from $892.8 million in Q4 fiscal 2022, but a 7.7% increase when adjusted for the additional week in the prior year [1][2] - The company achieved a net income of $12.7 million, translating to a diluted net income per share of $0.26 for the fourth quarter [1][2] - Comparable restaurant sales increased by 2.5% year-over-year and 14.0% compared to Q4 fiscal 2019 [2][3] Financial Performance - Total revenues for the fiscal year reached $3.44 billion, up from $3.30 billion in the previous year [1][11] - Adjusted net income for Q4 fiscal 2023 was $39.0 million, with an adjusted net income per share of $0.80 [2][15] - The company recorded a pre-tax net expense of $35.6 million related to asset impairment and lease termination [2][15] Operational Highlights - The Cheesecake Factory opened nine new restaurants in Q4, including three under the North Italia and Fox Restaurant Concepts brands, and two internationally in Thailand and China [3][4] - The company demonstrated strong operational execution, improving labor productivity and food efficiency, which contributed to profitability [3][4] - The company had total available liquidity of $292.8 million as of January 2, 2024, with a cash balance of $56.3 million [5][14] Market Position - The Cheesecake Factory's comparable sales growth outperformed the broader casual dining industry, indicating strong brand resilience [3][4] - The company plans to leverage its competitive strengths to drive profitable growth and shareholder value [3][4] - The Cheesecake Factory was recognized in the FORTUNE Magazine "100 Best Companies to Work For" list for the tenth consecutive year [7]

The Cheesecake Factory Incorporated (CAKE) is scheduled to report fourth-quarter fiscal 2023 results on Feb 21, after market close. In the previous quarter, the company’s earnings and revenues missed the Zacks Consensus Estimate by 7.1% and 1.4%, respectively. However, the metrics improved on a year-over-year basis.How are Estimates Placed?For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained unchanged at 74 cents in the past 60 days. The estimated figure indicates ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) The company reported a strong Q4 fiscal 2023, achieving record annual revenue and solid earnings growth driven by comparable sales and operational improvements [Q4 2023 Financial Highlights](index=1&type=section&id=Q4%202023%20Financial%20Highlights) The company reported strong Q4 fiscal 2023 results with $877.0 million in revenues, 7.7% growth excluding an extra week, and adjusted EPS of $0.80 Q4 Fiscal 2023 Financial Performance | Metric | Q4 Fiscal 2023 (13 Weeks) | Q4 Fiscal 2022 (14 Weeks) | | :-------------------------------------- | :------------------------ | :------------------------ | | Total Revenues | $877.0 million | $892.8 million | | Net Income (GAAP) | $12.7 million | | | Diluted Net Income per Share (GAAP) | $0.26 | | | Pre-tax Net Expense (Adjustments) | $35.6 million | | | Adjusted Net Income (Non-GAAP) | $39.0 million | | | Adjusted Diluted Net Income per Share (Non-GAAP) | $0.80 | | - Excluding the impact of an additional week in fiscal 2022 (approximately $78.4 million in sales), total revenues for Q4 fiscal 2023 increased **7.7%** over the prior year period[1](index=1&type=chunk) - Comparable restaurant sales at The Cheesecake Factory restaurants increased **2.5%** year-over-year in Q4 fiscal 2023 and increased **14.0%** relative to Q4 fiscal 2019, on an operating week basis[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO David Overton highlighted strong Q4 performance, record annual revenue, and market outperformance driven by operational execution and unit growth - Q4 results marked a strong finish to the year, with positive comparable sales growth and margin expansion contributing to **record annual revenue** and **solid earnings growth**[3](index=3&type=chunk) - Comparable sales and traffic at The Cheesecake Factory restaurants **outperformed** the broader casual dining industry in Q4, demonstrating brand strength and market share capture[3](index=3&type=chunk) - **Operational execution improvements** were seen in labor productivity, food efficiency, wage management, and hourly staff and manager retention, driving profitability[3](index=3&type=chunk) - **Nine new restaurants** opened during the quarter, along with two international Cheesecake Factory locations under licensing agreements, including the first in Thailand[3](index=3&type=chunk) [Operational Highlights](index=2&type=section&id=Operational%20Highlights) The company significantly expanded its restaurant footprint and detailed its diverse brand portfolio and operational excellence [Restaurant Development](index=2&type=section&id=Restaurant%20Development) The company expanded its footprint in Q4 fiscal 2023 with nine new company-owned and two international licensed restaurant openings - During Q4 fiscal 2023, the Company opened **nine new restaurants**: 3 Cheesecake Factory, 3 North Italia, and 3 FRC restaurants[4](index=4&type=chunk) - **Two Cheesecake Factory restaurants** opened internationally under licensing agreements in China and Thailand during Q4 fiscal 2023[4](index=4&type=chunk) - Subsequent to quarter-end, one North Italia, one Flower Child, one Culinary Dropout, and one international Cheesecake Factory (Mexico) opened[4](index=4&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) The Cheesecake Factory operates 334 restaurants across multiple brands in the US and Canada, with 33 international licensed locations and a bakery division - The Company owns and operates **334 restaurants** in the U.S. and Canada under brands including The Cheesecake Factory, North Italia, Flower Child, and FRC brands[7](index=7&type=chunk) - **33** The Cheesecake Factory restaurants operate internationally under licensing agreements[7](index=7&type=chunk) - The bakery division produces cheesecakes and other baked products for restaurants, international licensees, and third-party customers[7](index=7&type=chunk) - Named to the FORTUNE Magazine '100 Best Companies to Work For' list for the **tenth consecutive year** in 2023[7](index=7&type=chunk) [Liquidity and Capital Allocation](index=2&type=section&id=Liquidity%20and%20Capital%20Allocation) The company maintained strong liquidity and managed debt, while actively returning capital to shareholders through repurchases and dividends [Current Liquidity and Debt](index=2&type=section&id=Current%20Liquidity%20and%20Debt) As of January 2, 2024, the company had $292.8 million in liquidity and $475 million in total principal debt outstanding Liquidity and Debt Position | Metric | As of January 2, 2024 | | :-------------------------------------- | :-------------------- | | Total Available Liquidity | $292.8 million | | Cash Balance | $56.3 million | | Revolving Credit Facility Availability | $236.5 million | | Total Principal Amount of Debt Outstanding | $475 million | | 0.375% Convertible Senior Notes due 2026 | $345 million | | Revolving Credit Facility Drawn | $130 million | [Share Repurchases and Dividends](index=2&type=section&id=Share%20Repurchases%20and%20Dividends) In Q4 fiscal 2023, the company repurchased $9.8 million in shares and declared a quarterly dividend of $0.27 per share - Repurchased approximately **318,400 shares** of stock at a cost of **$9.8 million** in Q4 fiscal 2023[5](index=5&type=chunk) - Declared a quarterly dividend of **$0.27 per share**, payable on March 19, 2024[5](index=5&type=chunk) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) A conference call for Q4 fiscal 2023 results was held on February 21, 2024, with a webcast replay available until March 22, 2024 - Conference call to review Q4 fiscal 2023 results held on February 21, 2024, at 2:00 p.m. Pacific Time[6](index=6&type=chunk) - Webcast available live on investors.thecheesecakefactory.com, with a replay available through March 22, 2024[6](index=6&type=chunk) [Safe Harbor Statement](index=3&type=section&id=Safe%20Harbor%20Statement) The safe harbor statement cautions investors on forward-looking statements, highlighting risks from economic conditions, supply chain, and regulatory changes - The press release contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially[9](index=9&type=chunk) - Factors affecting results include economic, public health, and political conditions, supply chain disruptions, and changes in laws[9](index=9&type=chunk) - Investors are cautioned not to place undue reliance on forward-looking statements and are referred to SEC filings for detailed risk factors[9](index=9&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's consolidated income statements, segment performance, operating metrics, and key balance sheet information [Consolidated Statements of Income/(Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Income%2F%28Loss%29) This statement details revenues, costs, and profitability for Q4 and full fiscal year 2023, including operating expenses and net income Consolidated Income Statement Highlights | Metric | 13 Weeks Ended Jan 2, 2024 | % of Revenues | 14 Weeks Ended Jan 3, 2023 | % of Revenues | 52 Weeks Ended Jan 2, 2024 | % of Revenues | 53 Weeks Ended Jan 3, 2023 | % of Revenues | | :-------------------------------------- | :------------------------- | :------------ | :------------------------- | :------------ | :------------------------- | :------------ | :------------------------- | :------------ | | Revenues | $877,009 | 100.0% | $892,802 | 100.0% | $3,439,503 | 100.0% | $3,303,156 | 100.0% | | Food and beverage cost | $201,449 | 23.0% | $220,469 | 24.7% | $803,500 | 23.4% | $810,926 | 24.6% | | Labor expenses | $308,555 | 35.2% | $318,629 | 35.7% | $1,227,895 | 35.7% | $1,211,951 | 36.7% | | Income/(loss) from operations | $8,139 | 0.9% | $(15,123) | (1.7)% | $108,566 | 3.2% | $38,935 | 1.2% | | Net income/(loss) | $12,681 | 1.4% | $(3,298) | (0.4)% | $101,351 | 2.9% | $43,123 | 1.3% | | Diluted net income/(loss) per share | $0.26 | | $(0.07) | | $2.07 | | $0.86 | | [Selected Segment Information](index=5&type=section&id=Selected%20Segment%20Information) This section breaks down revenues, operating income, and other costs across The Cheesecake Factory, North Italia, Other FRC, and Other segments Segment Revenues and Operating Income | Segment | Q4 FY23 Revenues | Q4 FY22 Revenues | FY23 Revenues | FY22 Revenues | | :------------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | The Cheesecake Factory restaurants | $658,445 | $674,467 | $2,595,066 | $2,528,043 | | North Italia | $67,224 | $65,514 | $258,878 | $228,622 | | Other FRC | $70,913 | $66,507 | $263,923 | $237,552 | | Other | $80,427 | $86,314 | $321,636 | $308,939 | | **Total** | **$877,009** | **$892,802** | **$3,439,503** | **$3,303,156** | | Segment | Q4 FY23 Op. Income | Q4 FY22 Op. Income | FY23 Op. Income | FY22 Op. Income | | :------------------------------------- | :----------------- | :----------------- | :-------------- | :-------------- | | The Cheesecake Factory restaurants | $65,363 | $50,872 | $297,063 | $220,765 | | North Italia | $3,201 | $3,553 | $18,515 | $13,934 | | Other FRC | $3,596 | $5,346 | $19,422 | $23,577 | | Other | $(64,021) | $(74,894) | $(226,434) | $(219,341) | | **Total** | **$8,139** | **$(15,123)** | **$108,566** | **$38,935** | [Operating Information by Segment](index=6&type=section&id=Operating%20Information%20by%20Segment) This section details segment-specific operating metrics, including comparable sales growth, restaurant counts, and operating weeks Segment Operating Metrics | Metric | Q4 FY23 | Q4 FY22 | FY23 | FY22 | | :-------------------------------------- | :------ | :------ | :---- | :---- | | **The Cheesecake Factory restaurants:** | | | | | | Comparable restaurant sales vs. prior year | 2.5% | 4.0% | 3.0% | 7.0% | | Restaurants open at period-end | 216 | 211 | 216 | 211 | | **North Italia:** | | | | | | Comparable restaurant sales vs. prior year | 7% | 9% | 8% | 15% | | Restaurants open at period-end | 36 | 33 | 36 | 33 | | **Other Fox Restaurant Concepts (FRC):** | | | | | | Restaurants open at period-end | 40 | 34 | 40 | 34 | | **Total Company-Owned Restaurants:** | | | | | | The Cheesecake Factory | 216 | | | | | North Italia | 36 | | | | | Other FRC | 40 | | | | | Other | 39 | | | | | **Total Company-Owned** | **331** | | | | | **Total International-Licensed** | **32** | | | | [Selected Consolidated Balance Sheet Information](index=6&type=section&id=Selected%20Consolidated%20Balance%20Sheet%20Information) This section presents key balance sheet figures, including cash and long-term debt, as of January 2, 2024, and January 3, 2023 Key Balance Sheet Figures | Metric | January 2, 2024 | January 3, 2023 | | :-------------------------------------- | :-------------- | :-------------- | | Cash and cash equivalents | $56,290 | $114,777 | | Long-term debt, net of issuance costs | $470,047 | $468,032 | - Long-term debt includes **$340.0 million** net balance of 0.375% convertible senior notes due 2026 (principal amount of **$345 million**) and **$130 million** drawn on the Company's revolving credit facility[15](index=15&type=chunk) [Reconciliation of Non-GAAP Results to GAAP Results](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Results%20to%20GAAP%20Results) This section explains and reconciles non-GAAP financial measures to their GAAP equivalents, providing a clearer view of core operational performance [Explanation of Non-GAAP Measures](index=7&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Non-GAAP measures supplement GAAP results by excluding non-recurring items, aiding internal decision-making and period-to-period comparisons - Non-GAAP measurements supplement GAAP results by excluding the impact of certain items not considered indicative of ongoing operations[17](index=17&type=chunk) - These measures are used for financial and operational decision-making and to evaluate period-to-period comparisons[17](index=17&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This table reconciles GAAP net income and diluted EPS to adjusted non-GAAP figures, detailing adjustments for impairment, lease termination, and acquisition costs Non-GAAP Reconciliation Table | Metric | Q4 FY23 (13 Weeks) | Q4 FY22 (14 Weeks) | FY23 (52 Weeks) | FY22 (53 Weeks) | | :-------------------------------------- | :----------------- | :----------------- | :-------------- | :-------------- | | Net income/(loss) (GAAP) | $12,681 | $(3,298) | $101,351 | $43,123 | | Impairment of assets and lease termination expenses | $27,827 | $31,074 | $29,464 | $31,387 | | Acquisition-related contingent consideration, compensation and amortization expenses | $7,796 | $10,448 | $11,686 | $13,368 | | Tax effect of adjustments | $(9,262) | $(10,795) | $(10,699) | $(11,637) | | **Adjusted net income (non-GAAP)** | **$39,042** | **$27,429** | **$131,802** | **$76,241** | | Diluted net income/(loss) per share (GAAP) | $0.26 | $(0.07) | $2.07 | $0.86 | | Impairment of assets and lease termination expenses | $0.57 | $0.63 | $0.61 | $0.62 | | Acquisition-related contingent consideration, compensation and amortization expenses | $0.16 | $0.21 | $0.24 | $0.27 | | Tax effect of adjustments | $(0.19) | $(0.22) | $(0.22) | $(0.23) | | **Adjusted net income per share (non-GAAP)** | **$0.80** | **$0.56** | **$2.69** | **$1.51** |

Key PointsThe food service industry reached a staggering $997 billion in sales in 2023. As of January 2024, it provided over 12 million jobs in the United States. The restaurant industry is constantly evolving, with social media-driven trends and fickle consumer demands often shaping how we eat out.5 stocks we like better than AKSinking your teeth into a juicy burger from your favorite fast-food chain is comfort food at its finest. But as an investor, capitalizing on a flourishing restaurant empire may prov ...