Cheesecake profit increases slightly

Restaurant chain Cheesecake Factory Inc. reported a slight rise in quarterly earnings as a recent price increase helped boost sales at established outlets and offset higher labor and other costs.

The company also said it would open fewer restaurants next year and cut capital spending by 20% in fiscal 2008.

Third-quarter net income was $18.5 million, or 26 cents a share, compared with $18.1 million, or 23 cents, a year earlier.

Wall Street analysts, on average, had been expecting earnings of 27 cents a share, according to Reuters Estimates.

Revenue rose 15.4% to $375.5 million. Analysts had been expecting $382.82 million, according to Reuters Estimates.

Sales at restaurants open at least 18 months, a key measure known as same-store sales, rose 1.2%.

In fiscal 2008, the Calabasas Hills-based company expects to open about 17 restaurants, including 12 to 13 Cheesecake Factories, three to four Grand Luxe Cafes and one Rock Sugar Pan Asian Kitchen, a new brand.

Capital spending will drop about 20% from 2007 levels to a range of $160 million to $170 million, the company said, adding that it will use the money it saves to fund share buybacks.

Cheesecake Factory shares fell slightly to $23.20 in extended trade after closing at $23.30, down 44 cents.