NEW YORK (AP) â¿¿ The Cheesecake Factory Inc.'s stock slid more than 5 percent on Monday as an analyst cut her rating on the shares as consumers again pull back on dining out.
THE SPARK: As they worried about the economy and high unemployment during the recession, consumers ate out less frequently. As economic conditions have improved, they have been patronizing restaurants again.
But Sharon Zackfia of William Blair & Co. said in a client note on Monday that her checks on restaurant operators showed uneven performances in May following weakness in April.
Not helping matters are government reports showing that U.S. employers added only 69,000 jobs in May, the fewest in a year, and the unemployment rate rose a percentage point to to 8.2 percent.THE ANALYSIS: Zackfia reduced her rating on The Cheesecake Factory to "Market Perform" from "Outperform." She believes the company can still meet its own forecast for full-year earnings of $1.83 to $1.91 per share. But she said she is worried the results will come in below her estimate for $1.88 per share. SHARE ACTION: Shares of The Cheesecake Factory fell $1.42, or 4.5 percent, to $29.93 by mid-afternoon. The stock has traded between $23.65 and $34.07 over the past year.