Cheesecake Factory Earnings Rise; Revenue Growth Misses Expectations

(RTTNews) - Casual dining chain The Cheesecake Factory (CAKE) reported a quarterly profit that rose from last year. However, the company's revenue growth was slower than analysts had expected.

The company reported net income for the third quarter of $26.2 million, or $0.52 per share. This was up from $24.2 million, or $0.48 per share, in the same period last year.

Results included a one-time impairment charge of $6 million related to RockSugar Pan Asian Kitchen. Leaving out this item, the company's profit came in at $29.8 million, or $0.59 per share.

Analysts had expected the company to earn $0.56 per share, according to figures compiled by Thomson Reuters.

Revenue climbed to $526.7 million, compared to $499.1 million in last year's third quarter. However, analysts were looking for the top-line to rise to $535 million.

Comparable restaurant sales rose 2.2 percent in the quarter. The figure strips out revenue from newly opened restaurants in order to give a look at how established locations are doing. Comparable sales are considered an important metric for retailers and chain restaurants.

Comparable sales growth has been drifting lower throughout the year.

In the second quarter, Cheesecake Factory reported 2.8 percent growth in comparable sales. The first quarter saw 4.2 percent growth.

The comparable sales figure was slightly better than in last year's third quarter, when the figure was up 2.1 percent.

Cheesecake Factory said that it was helped out by low costs, which acted to offset some wage inflation that is affecting the entire sector. Commenting on the results, Chairman and Chief Executive Officer Chairman and Chief Executive Officer David Overton said the quarter's results exceeded the performance of the casual dining sector as a whole.

In terms of guidance Cheesecake Factory said it is looking to open 5 additional company-owned restaurants during the rest of the fourth quarter, including one next week.