Earnings Preview: The Cheesecake Factory

The Cheesecake Factory (CAKE) is expected to report Q2 earnings after market close Thursday, July 24, with a conference call scheduled for 5:00 p.m. ET.

Guidance

Analysts are looking for a profit of 29c on revenue of $412.21M. The consensus range is 27c to 34c for EPS, and revenue of $406.1M to $417.44M, according to First Call. In a June note to clients,

Analyst Views

Wedbush upgraded the company to Buy from Hold after checks indicated Q2 comps should be better-than-expected; the firm believes that the company will report a same-store sales decline of -1% in Q2. Wedbush also noted that home foreclosure rates in The Cheesecake Factory's markets have been stable and thinks that the company still has menu pricing power, as it has increased prices less than its peers in recent years. Wedbush also speculates that The Cheesecake Factory could launch a partnership with Starbucks (SBUX), which is beginning to sell Cheesecake products in several of its cafes.

Due to higher costs and mall traffic exposure, Credit Suisse downgraded shares to Neutral from Outperform on June 19. The Cheesecake Factory appointed Mark Mears to the newly-created position of Chief Marketing Officer on July 16. After missing analyst estimates for two consecutive quarters, the casual restaurant operator reported Q1 results in-line with estimates.