Q4 Preview: Analysts, Investors Wait Patiently for Cheesecake Factory (CAKE) Results

Shares of Cheesecake Factory (Nasdaq: CAKE) are swinging between positive and negative territory Tuesday afternoon ahead of the release of its fourth-quarter results after the closing bell.

The Wall Street quarterly consensus for Cheesecake Factory is $0.52 per share in earnings on $471.74 million in sales. During the fourth quarter of last year, the company reported earnings of $0.36 per share on $416.71 million in total sales. The company’s guidance calls earnings of $0.51-$0.53 per share on a 1.5-2.5 percent increase in comps.

For the full year 2011, analysts on the Street are currently estimating $1.64 per share in earnings on $1.75 billion in total sales.

The fourth quarter conference call is scheduled for 2:00 pm PT 5:00 pm CT on February 21, 2012.

According to data from Bloomberg, shares of Cheesecake Factory have 10 Buy ratings, 17 Hold ratings and two Sell ratings. The average price target on shares of CAKE is $33 with a range from $22 to $39.

Analyst Comments:

• Goldman Sachs thinks investors will be upset with the company’s quarterly performance as results come in below the Street’s consensus. For the quarter, the firm estimates earnings will total $0.50 per share on 17.9 percent restaurant margins, below the consensus of 18.8 percent.
  
  An analyst at Goldman commented, “Our 2.0% estimate is roughly in line with consensus for Q4. This said, we are below consensus for full year 2012 SSS as we believe CAKE is approaching domestic saturation, which should drive sub-par SSS and declining returns on capital in the mid-long term.”
  
  Goldman Sachs reaffirmed its Sell rating on the company ahead of the release.
  
  
• DA Davidson is slightly bullish on the quarter, estimating comps will be 1.8 percent, operating margin will total 9 percent and earnings will be $0.53 per share on $474.7 million in revenue. The firm said there maybe some upside to its current comp estimate.
  
  An analyst at DA Davidson said notable topics during the conference call will include the menu mix, menu innovation and traffic building initiatives, commodity cost outlook and pricing and ramping up new store openings.
  
  DA Davidson reiterated its Neutral rating and $30 price target.

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