Is The Cheesecake Factory (NASDAQ:CAKE) stronger than a batch of pesky hurricanes? Like most restaurant companies with a strong Florida presence, The Cheesecake Factory is claiming that it lost some sales during the storm.
However, The Cheesecake Factory's popularity is so eternal that it still closed out its September quarter with a 2.6% uptick in comps. Then again, perhaps that shouldn't come as much of a surprise. The company has been able to grow its sales at the unit level during all but one of its quarters over the past 13 years.
Then again, keeping folks coming has never been The Cheesecake Factory's problem. It's the money trickling to the bottom line that hasn't been as loyal. Dairy price hiccups and a difficult bakery opening have forced the company to stumble in the past, providing an appetizing entry point to buy into a company that always seems to bounce back.
Yet this quarter also has a hurdle. While revenue grew by 25% to hit $247.7 million, earnings actually fell during the period. The company posted profits of just $0.24 a share, short of last year's $0.28 showing. And while the company took a charge to help it cope with litigation stemming from accusations that the company was not giving its employees appropriate breaks during their shifts, even if you add back that $0.06 a share charge, you are left with earnings growth coming in at just a third of its top-line spurt.
Yet investors buying into The Cheesecake Factory may come to value the company's temporary margin fluctuations. Successful larger chains like Applebee's (NASDAQ:APPB), Darden (NYSE:DRI), and Brinker (NYSE:EAT) would love to have Cheesecake's problem if it came with that stellar track record in keeping folks waiting and tables turning for quality grub.
The Cheesecake Factory menu is wide, but can the entrees and desserts make you wider? How can you watch what you eat at restaurants? All this and more in the Fools Fighting Fat discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz ate at a Cheesecake Factory in Florida just last week. He can't remember the last time that he still had room for dessert, though. He owns shares in Cheesecake Factory.
