Thank you, Grand Lux.
Cheesecake Factory (Nasdaq: CAKE ) bucked the trend of sad casual dining operators this past quarter, and a lot of that credit goes to its non-namesake concept.
Cheesecake Factory came through in a dicey second quarter. Revenue climbed 16% to hit $373.2 million. The pros were expecting a mere 15% top-line advance. Comps inched 1.1% higher, powered by a 5.7% increase at Grand Lux. That's as far as we'll get, since this is a preliminary quarterly report. You'll have to wait until July 24 if you want to see the income statement go all the way down to the bottom line.
OK, so its Cheesecake Factory eateries still managed a 0.8% advance in same-unit sales. That's a relative feast compared with slumping restaurant bellwethers like Applebee's (Nasdaq: APPB ) and Brinker (NYSE: EAT ) , which have been posting negative comps in recent months. Still, Grand Lux is the reason to really get excited about Cheesecake Factory right now.
The 5.7% unit-level gain comes after a 5.5% surge in comps during last year's second quarter. Stack it up, and you're talking about a whopping 11.5% rise in comps over the past two years.
Pretty good, huh? Well, you haven't even tried the bread pudding yet, my friend. Yes, I'm a Grand Lux addict. I have to pass by a pair of Cheesecake Factory units to drive all the way to my nearest Grand Lux, but it's worth it. Obviously, I'm not alone. Patrons may be staying away from the more ordinary casual-dining concepts, but they seem to have no problem hitting up the slightly ritzier Grand Lux.
The beauty of Grand Lux is that there is so much room for growth here. Just five of the 21 new restaurants that Cheesecake Factory will open this year are Grand Lux units. There are just nine eateries open right now. As long as the concept continues to have legs, Cheesecake Factory has the perfect sister eatery to take over once its namesake chain saturates the market.
That won't be for another few years, but I can wait. I have to digest between rounds of crispy caramel chicken and banana chocolate chip bread pudding.
For the skinny on the eateries mentioned, check out:
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Longtime contributor Rick Munarriz fancies the crusted chicken romano at Cheesecake Factory, though he has been known to try something different off the menu from time to time. He can't remember the last time he still had room for dessert, though. He owns shares in Cheesecake Factory. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.