Cheesecake Factory Posts Hearty Gains
Strong sales and an insurance settlement helped Cheesecake Factory Inc. report a 32% increase in fourth-quarter profit Tuesday.
The Calabasas-based chain of 87 casual dining spots posted net income for the period ended Dec. 28 of $20.5 million, or 26 cents a share, compared with $15.6 million, or 20 cents, a year earlier.
Excluding a $2-million property insurance settlement related to bakery product losses, the company would have earned 24 cents a share. On that basis, analysts had forecast a per-share profit of 24 cents, according to Thomson First Call.
Revenue rose 24% to $266.1 million in the fourth quarter, and comparable-restaurant sales, or sales at restaurants open at least a year, grew 3% from a year ago.
Shares of the company, which released its results after the stock market closed, rose 25 cents to $32.12 during the day on Nasdaq, but climbed 3.2% to $33.15 in after-hours trading.
Cheesecake executives also reported a 3.9% increase in comparable-restaurant sales for the first five weeks of fiscal 2005 despite wet weather in California and winter storms in the Midwest and Northeast, which resulted in about 20 lost operating days.
Hil Davis, an analyst at SunTrust Robinson Humphrey, who recently upgraded Cheesecake Factory shares to a “buy,” noted that the early 2005 sales increase builds on a 6.1% growth in comparable-restaurant sales the company reported for the first quarter of 2004.
“All that traffic they generated last year they’re holding on to,” Davis said.
Added Dean Haskell, an analyst at JMP Securities: Cheesecake Factory’s “comp-store sales continue to improve and new units continue to open at good volumes.”
The company opened 16 new restaurants in 2004, including four in the fourth quarter. Plans call for 18 additional eateries to open in 2005, with new locations scheduled to open during the first quarter in Rancho Cucamonga and at the Grove shopping center in Los Angeles.
For the full year 2004, the company posted net income of $67.8 million, or 85 cents a share, up from $57.8 million, or 74 cents, a year earlier.
Revenue rose 25% to $969.2 million, while comparable-restaurant sales grew 3.9%.
