Cheesecake Factory Expands to Middle East
CALABASA HILLS, Calif. (TheStreet) -- Cheesecake Factory (CAKE) shares jumped Tuesday morning after the casual dining chain said it plans to open restaurants in the Middle East.
Cheesecake Factory said late Monday it entered into an exclusive licensing agreement with the Kuwait-based Alshaya group to build and operate 22 of its namesake restaurants over the next five years in the United Arab Emirates, Kuwait, Bahrain, Qatar and the Kingdom of Saudi Arabia.
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The agreement also includes the opportunity to expand to other emerging markets such as North Africa, Central and Eastern Europe, Russia and Turkey.
"Our agreement with Alshaya provides us with another avenue for growth and will enhance our ability to continue delivering shareholder value," said CEO David Overton. The news led analysts at Miller Tabak to upgrade Cheesecake shares to buy from hold, setting a $35 price target. Cheesecake Factory shares gained 3.9% Tuesday morning to trade at $31.18. A number of U.S.-based restaurant chains such as Yum! Brands (YUM), McDonald's (MCD) and Starbucks (SBUX) have recently made announcements about expansion in emerging markets. Last week Yum! said it plans to put restaurant chains Long John Silver's and A&W All-American Restaurants up for sale as it pushes to expand in international markets .McDonald's said in December it plans to grow its presence in China by 40% this year, opening 200 new stores in the country over the next three years.
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