The Incorporated Cheesecake Factory CAKE released results for the fourth quarter of fiscal 2021, in which earnings and revenue missed Zacks’ consensus estimate for the second consecutive quarter. However, the top and bottom lines have improved year over year.
Despite reporting weaker-than-expected results, the company’s shares rose 4% in the Feb. 16 after-hours trading session. grew nearly 24.3% year-over-year. Comps benefited from strong off-site sales.
David Overton, President and CEO, said: “We delivered another quarter of strong sales performance across all of our brands, continuing to outperform the broader casual dining industry and delivering record revenues despite the surge. cases of COVID-19 of the Omicron variant towards the end. of the year.”
Profit and revenue discussion
In the quarter under review, adjusted earnings per share (EPS) was 49 cents, which missed Zacks’ consensus estimate of 59 cents. In the prior year quarter, the company posted an adjusted loss of 32 cents per share.
In the fiscal fourth quarter, total revenue of $776.7 million was below Zacks’ consensus estimate of $778 million. Revenue jumped 40.1% year-over-year. The increase can mainly be attributed to solid growth in off-premises sales.
In the quarter under review, compensation at Cheesecake Factory restaurants increased 33.8% year-over-year. In the prior year quarter, comps were down 19.5% year over year. However, the metric is up 7.7% from 2019 levels.
The Cheesecake Factory Incorporated price-consensus-eps-surprise-chart | Quote from The Cheesecake Factory Incorporated
Costs in detail
Cost of sales, as a percentage of revenue, increased 10 basis points (bps) year over year to 23% in the fiscal fourth quarter. Labor spending as a percentage of total revenue was 37.1%, down 210 basis points from year-ago quarter levels. Other operating expenses (as a percentage of total revenue) were 27%, down 320 basis points from the year-ago quarter level.
General and administrative (G&A) expenses accounted for 6.1% of revenue, compared to 7.3% in the prior year quarter. In the fourth fiscal quarter, pre-opening expenses were 0.5% of revenue, a flat year-over-year rate.
As of December 28, 2021, Cheesecake Factory’s cash and cash equivalents totaled $189.6 million, compared to $154.1 million as of December 29, 2020. During the fourth quarter of the fiscal year, long-term debt (net of issue costs) was $466 million, down from $280 million. to December 29, 2020.
During the fourth fiscal quarter, the company opened four new restaurants, including The Cheesecake Factory in Huntsville, AL, North Italia in Orlando, and a Blanco and Culinary Dropout in Denver. During the quarter, the Company achieved its development goal of opening 14 new restaurants (across all of its concepts) in fiscal 2021.
Zacks ranking and key picks
Cheesecake Factory carries a Zacks rank #4 (sale).
Some top-ranked stocks in the Zacks wholesale retail sector includes MarineMax, Inc. HZO, Arcos Dorados Holdings Inc. ARCO and Tapestry, Inc. TRP.
MarineMax sports a Zacks Rank #1 (Strong Buy). You can see the full list of today’s Zacks #1 Rank stocks here. HZO has a last four quarter earnings surprise of 55.8% on average. Shares of the company have risen 6.8% over the past year.
The Zacks consensus estimate for MarineMax sales and EPS in 2022 suggests growth of 13.9% and 16.2%, respectively, from prior year period levels.
Arcos Dorados wears a Zacks Rank #2 (Buy). ARCO has long-term earnings growth of 42.9%. Shares of the company have jumped 32.8% over the past year.
Zacks consensus estimate for Arcos Dorados sales and EPS in 2022 suggests growth of 10.4% and 255.6%, respectively, from prior year period levels.
Tapestry carries a Zacks rank of No. 2. The company has a trailing four-quarter earnings surprise of 29%, on average. Shares of the company have risen 9.1% over the past year.
Zacks’ consensus estimate for Tapestry sales and EPS in 2022 suggests growth of 15% and 18.5%, respectively, from prior year period levels.
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