Sour Quarter at Cheesecake Factory

The stock drops 9% the day after a flat first quarter report.
Author:
Publish date:

Casual dining restaurants operator

Cheesecake Factory

(CAKE) - Get Report

sank 9% after a flat first quarter earnings report.

The Calabasas Hills, Calif.-based company earned $19.3 million, or 24 cents a share, in the first quarter, compared with $19 million, or 24 cents a share, a year ago. Adjusted for stock option expenses, earnings were $22.1 million, or 27 cents a share in the most recent quarter. On that basis, analysts surveyed by Thomson First Call were expecting earnings of 25 cents a share in the most recent quarter.

First-quarter revenue rose 14.2% from a year ago period to $306.4 million as against analysts' expectation of $316.4 million.

"In addition to the timing of the two holidays, our revenues in the first quarter were impacted, like many in the restaurant industry, by a general softness in traffic in several geographic areas," the company said.

The company's comparable restaurant sales decreased 1.3% in the first quarter, driven by a shift in the New Year's and Easter holidays. The holidays were not included in comparable periods. Same-store sales would have risen 0.8% without the shift, Cheesecake said.

First-quarter operating income fell 8.5% from a year-ago period to $25.7 million and operating margin declined 209 basis points to 8.4%.

The company expects to open 21 new restaurants in this year, including two to three Grand Lux cafes. The company expects the opening of the majority of the new restaurants in the second half of the year. It expects the opening to lower the operating growth to about 17% in this year.

The stock dropped $3.09 to $31.97.

This story was created through a joint venture between TheStreet.com and IRIS.