Cheesecake lowers forecasts

From Times Wire Services

Cheesecake Factory Inc. posted quarterly earnings that fell more than Wall Street had expected and shares shed 6.6% after a soft U.S. economy prompted it to lower full-year forecasts.

Sit-down restaurants such as Cheesecake Factory have seen their margins under pressure as their customers grapple with a downturn in the U.S. economy as well as higher food and energy costs.

For 2008, the restaurant chain said it now expected revenue growth of 10% to 12% and earnings per share growth of 10% to 15%.

In October, it forecast 2008 revenue growth of 14% to 15% and earnings per share growth of 22% to 24%.

The company also cut its plan for restaurant openings in a bid to lower costs and improve results at existing outlets.

It now plans to open seven to nine restaurants in 2008, versus an earlier plan to open as many as 17.

The Calabasas Hills-based company known for its generous portions and exhaustive menu said fourth-quarter net income fell 34.8% to $13.3 million, or 19 cents a share, compared with $20.4 million, or 26 cents, a year earlier.

Excluding one-time, pretax legal-related charges totaling $2.6 million, the company had a profit of 22 cents a share.

Revenue was up 12.6% to $406.3 million from $360.7 million. Earnings and sales missed Wall Street targets.

Shares in Cheesecake Factory fell to $19.50 in extended trade from their close of $20.87, down 51 cents.

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