Why Is Cheesecake Factory (CAKE) Down 8.4% Since Last Earnings Report?

A month has gone by since the last earnings report for Cheesecake Factory (CAKE). Shares have lost about 8.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Cheesecake Factory due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for The Cheesecake Factory Incorporated before we dive into how investors and analysts have reacted as of late.

Cheesecake Factory Q4 Earnings & Revenues Top Estimates

Cheesecake Factory reported fourth-quarter fiscal 2025 results, with earnings beating the Zacks Consensus Estimate and decreasing on a year-over-year basis. And total revenues surpassed the estimate and increased from the prior year's reported figure.

CAKE’s Q4 Earnings & Revenue Discussion

For the quarter under review, CAKE reported adjusted earnings per share (EPS) of $1.00, topping the Zacks Consensus Estimate of 98 cents by 2%. In the year-ago period, the company reported adjusted EPS of $1.04.

Quarterly revenues of $961.6 million surpassed the consensus estimate of $949 million by 1.3%. The top line increased 4.4% on a year-over-year basis.

CAKE’s Q4 Comps

In the reported quarter, comparable sales at Cheesecake Factory restaurants fell 2.2% year over year compared with a 1.7% increase reported in the prior-year quarter.

North Italia comps declined 4% year over year against 1% growth reported in the year-ago quarter.

CAKE’s Costs in Detail

The cost of food and beverage, as a percentage of revenues, contracted 70 basis points (bps) year over year to 21.6% in the fiscal third quarter.

Labor expenses, as a percentage of total revenues, declined 40 bps year over year to 33.8%.

Other operating costs, as a percentage of total revenues, decreased 20 bps year over year to 26.6%.

General and administrative expenses accounted for 7% of revenues, increased 70 bps year over year.

Balance Sheet of CAKE

As of Dec. 30, 2025, Cheesecake Factory’s cash and cash equivalents totaled $215.7 million, up from $84.2 million as of 2024-end. Long-term debt (net of issuance costs) stood at $630.1 million, compared with $452.1 million as of Dec. 31, 2024. The company reported total available liquidity of $582.2 million, including its undrawn revolving credit facility.

On Feb. 12, 2026, management approved a $0.03 increase in the quarterly dividend, raising it to $0.30 per share. The dividend is payable on March 17, 2026, to shareholders of record as of March 4. During the quarter, CAKE repurchased approximately 228,100 shares for $11.2 million.

CAKE’s Store Developments

In the fourth quarter of fiscal 2025, the company expanded its footprint with the opening of three FRC restaurants, two The Cheesecake Factory locations, and two North Italia restaurants.

Subsequent to quarter-end, it opened one Flower Child location and closed four restaurants, including two The Cheesecake Factory units, one Grand Lux Cafe and one FRC location.

For fiscal 2026, CAKE continues to anticipate up to 26 new restaurant openings across its portfolio, including up to six Cheesecake Factory units, six to seven North Italia locations, six to seven Flower Child restaurants and eight FRC concepts.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

Currently, Cheesecake Factory has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock has a grade of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cheesecake Factory has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Cheesecake Factory belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Restaurant Brands (QSR), has gained 8.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

Restaurant Brands reported revenues of $2.47 billion in the last reported quarter, representing a year-over-year change of +7.4%. EPS of $0.96 for the same period compares with $0.81 a year ago.

Restaurant Brands is expected to post earnings of $0.83 per share for the current quarter, representing a year-over-year change of +10.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.3%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Restaurant Brands. Also, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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