Is Cheesecake Factory getting stale?
The stock drops after a research note questions the company's projections.
The company's business may be slowing down. The stock dropped by as much as 5% Monday after an analyst at William Blair & Co. cut her rating to "market perform" from "outperform."
The stock's slide put the brakes on what had been a pretty nice year of growth. Shares fell below $25 last October, but climbed back to nearly $33 last week. Heading into the close Monday, the stock was down to $30.29.
The analysts at William Blair said their checks showed a choppy May for the casual dining sector, and that comes after a softer April. The Cheesecake Factory is not immune to these industry trends, writes analyst Sharon Zackfia.
As a result, the analysts are expecting Cheesecake Factory sales to slow. They think same-store sales will be at or below the low end of the company's forecast for the second quarter. Executives estimated that sales growth would be 1.5% to 2.5%, compared to 2.1% growth a year earlier.
The William Blair analysts are estimating quarterly revenue at $448 million, about $10 million below the consensus. They think the company has enough wiggle room to meet its full-year earnings guidance of $1.83 to $1.91 a share. But, Zackfia wrote, "we are increasingly worried about the potential for more downside than upside to our and the consensus estimates of $1.88."
The majority of analysts covering the stock have a "hold" rating, perhaps because the stock has just become too expensive. "The greater risk, however, could be a very range-bound stock absent some catalyst for sales both for The Cheesecake Factory and the broader casual dining space," Zackfia added.
Perhaps a better buy in this sector is Darden Restaurants (DRI), owner of Red Lobster and Olive Garden, notes Jonas Elmerraji of TheStreet. It's "the casual dining firm that's best been able to succeed in this challenging economic environment," he adds. Plus, Darden pays a 3.3% dividend yield and may increase its dividend in the next quarter.
I'm sure no one's heart attack was caused by The Cheesecake Factory alone. If they suffer a heart attack, its from CONSISTENTLY eating high fatty foods. Which would mean, what??? .....IT'S THEIR OWN FAULT! *gasp* Oh, my....
Lesson for today: TAKE RESPONSIBILITY FOR YOUR OWN HEALTH, PEOPLE!
I love The Cheesecake Factory. And of course sales are off. Almost all restaurant sales are off. Who has the money to eat out, when they can barely manage to buy groceries?
"Hope and Change." And Obama kept his promise. Yes, there's always Hope. And Change? Yeah, I've got a little bit of "change" rattling around in my purse.
Kind of perplexed by some of these comments...
When the name of a restaurant is "CHEESECAKE FACTORY" I don't know whether or not comments about the health value of their food is relevant. What where you expecting? I don't think their major aim was to be considered the healthiest place in America, it's not named "The All Natural Locally Grown Organic Lettuce Farm" it's "The Cheesecake Factory" the specialize in decadence and fatty foods. It would be like going to a state fair and then complaining that the deep fried butter was too greasy.
It's always packed because they don't take reservations for whatever reason, I don't always enjoy it but I respect it and appreciate the fact that if I have to wait so does everybody else. And no I have never been to one where they had open tables and refused to seat people at them, A lot of the time I go have a drink at the bar and get a table there. I’ve maybe waited a half hour to receive my food from the time I ordered it, but I’ve definitely never waited an hour and a half.
No they do not have a dollar menu, but it is a little bit of a nicer restaurant than Mickey D’s. I think they are competitively priced, especially for the portion size. Complaining that it’s too expensive and then complaining that the portion sizes are too large seems ridiculous to me. Bring a friend ask for another plate and eat it family style if you want to save money.
I don't think they have a racist agenda either, I don't think the company is sending out memo's on how to keep the black man down. I've had waiters of all races and been there with people of all races and the service has always been the same.
If you don’t like the food that’s fair enough, you are allowed to like what you like (or not like it), but I don’t think that they are comparable to a Chili’s or Applebee’s. Ambiance alone they aren’t even comparable, let alone when you factor in the food and menu variety. Why do people think that Chili’s, Applebee’s, Red Lobster, and Olive Garden are fine dining? I don’t really consider Cheesecake Factory fine dining either but I would say that it is better and closer to it than any of those aforementioned restaurants. I wouldn’t consider those on the same level as McDonald’s or Burger King, but they are like a notch above Denny’s and Cheesecake Factory is like a notch above them.
mediocre and overpriced. loaded with fat grams and calories. crowded.
The times I've gone, the food is always excellent, but long wait is a downer. They should consider groupon type deals to get new or existing customers to patronize more...their prices are too high!
There's nothing special about The Cheesecake Factory. Their food average at best, yet overpriced. Their cheesecake slices are not only expensive, but one slice (depending on the variety) can contain over 2000 calories in itself. Who needs it?
And, I wouldn't wait in line for an hour for any restaurant, ever. No meal or restaurant is ever worth waiting that long for.
Great food, great atmosphere...just need to make it more affordable!
I think the Cheesecake Factory sucks, and I'll tell you why. When I ate there, I asked if they had sugar free cheesecake because I'm diabetic. The waitor said yes, and I was very happy until he added but it's two bucks more than the regular. I said is it a bigger piece? And he said no......smaller if anything. I asked for the manager to come and explain the price difference to me. Basically he said other people can eat what they want and they want them to eat their cheesecake so they make the price affordable. But diabetics, he said HAVE to have the sugar free, so they charge more just because they can. I said I don't think I'll be eating here anymore with that kind of attitude. He just shrugged. He could not have cared less. I hope they whole place goes down the toilet.
Thanks for your time.
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Consumers are very status conscious in Asia, Africa and other emerging-market areas. This is especially true in China.
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