CAKE +0.79% Although Down 10.43% Over the Past Week, Q3 Earnings Surpass Expectations and Sales Increase
- Cheesecake Factory (CAKE) reported Q3 2025 revenue of $907M, exceeding guidance, with 3.7% adjusted net margin surpassing expectations. - North Italia and Flower Child brands drove 16-31% sales growth, while restaurant-level margins improved by 70-140 basis points. - Despite 19 new units opened in 2025 and $556.5M liquidity, shares fell 5.3% post-earnings due to revenue shortfall and inflation concerns. - Loyalty program growth and $13.8M shareholder returns contrasted with 10.43% 7-day stock decline ami
As of October 30, 2025,
Cheesecake Factory Inc (NASDAQ:CAKE) reported third-quarter 2025 results that exceeded projections, with total revenue of $907 million, matching the midpoint of its guidance, and an adjusted net income margin of 3.7%, which surpassed the upper end of guidance. The flagship
Franchise and off-premise businesses experienced notable growth. North Italia, the upscale Italian dining brand, achieved $83.5 million in sales, a 16% year-over-year increase, while Flower Child, a casual dining concept, saw sales jump 31% to $48.1 million. External bakery sales also rose 20% to $18 million. Profit margins at the restaurant level improved for these brands as well: North Italia’s margin climbed 70 basis points to 15.7%, and Flower Child’s margin rose by 140 basis points to 17.4%. These outcomes highlight the company’s approach of expanding through less prominent brands.
The company continued to meet its expansion goals, opening 19 new restaurants so far this year, bringing the total for 2025 to 25. For 2026, the plan is to open as many as 26 new locations. Liquidity remains strong, with total available liquidity at $556.5 million, including $190 million in cash. In the third quarter, shareholders received $13.8 million through dividends and share buybacks.
Despite the strong quarterly results, the stock declined by 5.3% in the week after the earnings announcement, as mixed revenue figures and future guidance dampened investor enthusiasm. Although the company beat EPS expectations with a 13.33% positive surprise, revenue missed Zacks’ forecast by 0.63%. Management pointed to a weaker consumer environment and persistent inflation in commodities, especially beef, as ongoing challenges.
The Cheesecake Rewards loyalty program, on the other hand, continued to gain traction, with membership numbers and member satisfaction both on the rise, indicating progress in customer loyalty and retention.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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