Cheesecake Factory Reports Third-Quarter Earnings Drop
Cheesecake Factory on Thursday reported lower third-quarter earnings due to disappointing sales at its casual restaurants and costs for stock-based compensation.
The company also said sales at restaurants open at least 18 months were flat to slightly positive so far in the fourth quarter and its shares rose 5.8% in extended trade.
Like many in the restaurant industry, Cheesecake Factory has struggled this year with weak customer traffic that led to a drop in same-store sales in the first three quarters.
Third-quarter net income was $18.1 million, or 23 cents a share, compared with $21.7 million, or 28 cents a share, a year ago. Analysts were expecting earnings of 25 cents a share,
on average, according to Reuters Estimates.
Same-store sales fell 1.6 percent in the quarter, while total revenue rose 11% to $325.3 million.
Cheesecake Factory also said second-quarter earnings rose slightly to $23.4 million, or 30 cents a share, from $23.2 million, or 29 cents a share, last year. Wall Street analysts'
average estimate for the quarter was 28 cents a share.
Same-store sales fell 0.8 percent in the second quarter, and revenue rose 12 percent to $322.6 million.
Cheesecake Factory had delayed reporting its results for both the second and third quarters until it completed a review of its stock options practices.
The company's shares have been hard-hit this year by the investigation into whether the dates of its stock options were manipulated. Earlier this month, the chain said it completed the review and will restate some of its financials to record $5.5 million in additional compensation expense.
Cheesecake Factory shares rose to $29.30 in after hours trade after closing at $27.70 on Nasdaq.