Cheesecake Factory Q2 Results Miss View; Hikes Dividend, Share Buyback

(RTTNews) - Shares of Cheesecake Factory Inc. (CAKE) declined more than 4 percent in extended trades Wednesday after the restaurant chain's results for the second quarter missed analysts' estimates. Cheesecake's net income for the second quarter was flat with last year, as higher revenues were offset by a one-time charge and weak growth in comparable restaurant sales.

In addition, the company's board of directors increased the quarterly dividend by 17 percent and also increased its share repurchase authorization by 18 percent to 48.5 million shares.

Cheesecake's second-quarter net income was $28.58 million or $0.52 per share, compared to $28.40 million or $0.52 per share in the year-ago period.

The latest quarter's results include a pre-tax of about $1.5 million related to the planned relocation of two Cheesecake Factory restaurants. The amount of the charge decreased net income per share by about $0.02.

Adjusted net income for the quarter was $29.49 million or $0.54 per share, compared to $27.98 million or $0.51 per share in the previous-year quarter. On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $0.57 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 3 percent to $470.12 million from $454.75 million in the same period last year. Analysts had a consensus revenue estimate of $473.36 million.

Comparable restaurant sales at Cheesecake Factory and Grand Lux Cafe increased 0.8 percent in the quarter. This compared to a 1.7 percent increase in the same period last year.

By concept, comparable restaurant sales grew 0.9 percent at Cheesecake Factory and edged up 0.1 percent at Grand Lux Café.

During the quarter, the company opened one new restaurant in Knoxville, Tennessee.

Looking ahead, Cheesecake continues to expect to open as many as eight to ten new restaurants in fiscal 2013. Internationally, the company now expects one new Cheesecake Factory restaurant to open in the Middle East under a licensing agreement.

The company's board of directors increased the quarterly dividend on its common stock by 17 percent to $0.14 per share. The dividend is payable on August 20 to shareholders as of August 7.

Cheesecake now expects to allocate as much as $125 million toward share repurchases in the second half of fiscal 2013. In addition, the company's board increased its share repurchase authorization by 7.5 million shares to 48.5 million shares.

CAKE closed Wednesday's trading at $41.90, down $0.64 or 1.50 percent on a volume of 1.55 million shares. In after-hours, the stock further declined $1.95 or 4.65 percent to $39.95.