Cheesecake Factory Inc (CAKE), a leading upscale dining operator in the U.S., announced its preliminary sales results for the fourth quarter and fiscal 2010. The company expects to report its full results on February 10, 2011.
The California-based company’s total revenue rose 4.0% year over year to $417 million for the reported quarter, in line with the Zacks Consensus Estimate. The upside in revenue was perked up by higher comparable sales growth. Comparable restaurant sales inched up 0.9% in the quarter and were positive for the fourth consecutive quarter due to a reviving economy that resulted in an increased consumer demand.
However, the bad weather condition and holiday shift adversely impacted same restaurant sales growth by 120 basis points. By concept, comparable restaurant sales inched up 1.0% at the Cheesecake Factory and slipped 0.4% at Grand Lux Cafe.
The comparable restaurant sales for fiscal 2010 increased 2.0% as the company continues to focus on sales driven initiatives like new menu offerings, value-added service and improved food quality to attract customers.
Cheesecake operating 163 full-service restaurants also remains positive about fiscal 2011 and remains focused on accelerating its growth and enhancing shareholder value next year.
During the third quarter, Cheesecake reported sales of $418.4 million, up 4.4% from the prior-year quarter and comparable restaurant sales spiked 2.8% with 2.9% and 1.4% growth at the Cheesecake Factory and Grand Lux Cafe, respectively.
The Zacks Consensus Sales estimates for fiscal 2010 and 2011 are $1.7 billion and $1.8 billion, respectively. The Zacks Consensus EPS estimate for the fourth quarter of 2010 is 36 cents (reflecting a year-over-year growth of 29.3%) and for fiscal 2010 is $1.42 (reflecting a year-over-year growth of 35.6%). The estimates have remained unchanged over the last 60 days. Hence, we do not foresee any earnings surprises and expect the company to report in line results.
Cheesecake currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We also maintain our long-term Outperform recommendation on the stock.
One of Its competitors. Ruth’s Hospitality Group Inc (RUTH), also recently reported preliminary sales results for the fourth quarter of 2010. The company-owned restaurants sales surged 8.0% year over year to $90.4 million, up 9.2% at Ruth’s Chris Steak and down 2.2% at Mitchell’s Fish Market.
CHEESECAKE FACT (CAKE): Free Stock Analysis Report
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