The Cheesecake Factory’s second quarter results were well received by the market, reflecting a combination of menu innovation and disciplined operational execution. Management pointed to a 1.2% increase in comparable restaurant sales, with record average weekly sales and elevated unit volumes. CEO David Overton credited new menu introductions and consistently high guest satisfaction scores as central drivers of performance. Additionally, operational improvements, including enhanced labor productivity and wage management, contributed to the highest four-wall restaurant margin in eight years. Management emphasized that these gains were achieved without relying on discounting, reinforcing the company’s differentiated positioning within the casual dining sector.
Is now the time to buy CAKE? Find out in our full research report (it’s free).
The Cheesecake Factory (CAKE) Q2 CY2025 Highlights:
- Revenue: $955.8 million vs analyst estimates of $948.3 million (5.7% year-on-year growth, 0.8% beat)
- Adjusted EPS: $1.16 vs analyst estimates of $1.06 (9.2% beat)
- Adjusted EBITDA: $92.92 million vs analyst estimates of $86.19 million (9.7% margin, 7.8% beat)
- Operating Margin: 6.8%, in line with the same quarter last year
- Locations: 395 at quarter end, up from 374 in the same quarter last year
- Same-Store Sales rose 1.1% year on year, in line with the same quarter last year
- Market Capitalization: $3.07 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From The Cheesecake Factory’s Q2 Earnings Call
- Brian John Bittner (Oppenheimer): asked if improved net income margin was operationally driven. CFO Matthew Clark confirmed stronger four-wall margins, attributing improvement to operational excellence and stable sales trends.
- Andrew D. North (Baird): inquired about staff retention and its effects. President David Gordon shared that both staff and management retention are at historic highs, translating to productivity gains and lower turnover costs.
- Jeffrey Daniel Farmer (Gordon Haskett): questioned the impact of recent menu innovation on customer response. Gordon said new menu items, highlighted on separate cards, are driving incremental orders without reducing demand for established offerings.
- Sara Senatore (Bank of America): asked about Flower Child’s profitability and its potential to shift the company’s returns profile. Clark noted unit economics are strong, with margins above 20% and returns in the mid-30% range, positioning it for a growing role.
- Jon Michael Tower (Citigroup): questioned the scalability of Flower Child’s growth rate. Gordon responded that 20%+ annual unit growth is achievable, with management development as a key factor for sustaining expansion without compromising the guest experience.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be focused on (1) the success of new menu categories and their contribution to traffic trends, (2) the pace and profitability of new unit openings for both existing and emerging concepts, and (3) further improvements in labor retention and operational efficiency. Progress in targeted marketing and evolving rewards program engagement will also be key indicators of sustained growth.
The Cheesecake Factory currently trades at $61.60, down from $63.13 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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