Hungrier-than-expected consumers buoy Cheesecake

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Some Americans’ answer to the recession blues: Eat more cheesecake -- or at least, don’t eat a lot less.

Shares of Cheesecake Factory Inc. have rocketed 19% today after the Calabasas Hills-based restaurant chain late Thursday reported better-than-expected first-quarter sales and earnings.

Same-store sales were down 3.4% compared with a year ago, but that was far better than the 6% decline that analysts, on average, had expected.

The first-quarter drop also was about half the fourth-quarter’s pace -- another sign that many consumers have opened their wallets a bit wider in recent months. The company said it saw improvement in its suburban stores, which had suffered worse than its urban locations in last year’s sales slump.

And although customers continue to reduce alcoholic beverage orders, dessert orders are up compared with a year ago, Cheesecake said.

Net income last quarter was $10 million, or 17 cents a share, down 30% from a year earlier. But analysts had expected earnings of just 10 cents a share. Total sales were $393 million, basically flat with a year earlier.

The company raised its earnings projection for 2009 to a range of 67 cents to 75 cents a share, from the 57-cents-to-67-cents range it gave in February.

The stock was up $2.84 to $17.76 about 12:10 p.m. PDT, the highest since June. The shares fell as low as $5.32 in late November, when it looked to some investors as if economic Armageddon was imminent.

Ironically for a restaurant chain known for its huge portions, Cheesecake got a boost last quarter from its new ‘Small Plates & Snacks’ menu. CEO David Overton said on a conference call with analysts on Thursday that guests are using the small-plates menu ‘as an add-on when they might not have otherwise ordered an appetizer, and also for shared dining.’

Overall, customers who ordered from the small-plates menu had higher check averages than customers who didn’t, Overton said.

That impressed Jeff Farmer, an analyst at Jefferies & Co. But with the stock already up 76% this year, and trading for 24 times the high end of the company’s 2009 per-share earnings forecast, Farmer maintained his ‘hold’ rating on the shares.

-- Tom Petruno