The Cheesecake Factory

The Cheesecake Factory posted second-quarter results that beat expectations, with revenue up 7.7% year over year to $1.03 billion and adjusted earnings of $1.44 per share versus the $1.17 consensus. Following the report, 10 analysts raised current-year estimates over the last 60 days, lifting the Zacks Consensus Estimate from $4.01 to $4.47 per share, and 10 analysts also raised next-year estimates with no downward revisions. The company now carries a Zacks Rank #1 (Strong Buy), with current-year earnings growth forecast at 18.5% and next-year consensus around $4.96 per share. Revenue is expected to grow about 6.8% this year and another 6.77% next year.

Investors are rotating out of fast-food chains and into sit-down restaurants, according to Yahoo Finance Markets & Data Editor Jared Blikre. Cheesecake Factory, Bloomin' Brands, and BJ's Restaurants have outperformed, while Shake Shack is down 34% and Wingstop is down 67% over the past year. The spread between sit-down and high-growth fast-food names has widened to 66 points, surpassing the previous peak of 50 points set on November 18, 2019. Blikre says investors now want to see current traffic rather than expansion ambitions.

Zacks Investment Research featured Lam Research, The Cheesecake Factory, Vertiv, and Fortinet as promising growth-at-a-reasonable-price stocks. Lam Research guided for September 2026 quarter revenues of $8.1 billion with a non-GAAP operating margin of 39.5%, while its fiscal 2027 earnings consensus estimate rose 17.6% to $9.24 per share over the past 30 days. The Cheesecake Factory reiterated plans to open up to 26 new restaurants in fiscal 2026 and saw its 2026 earnings estimate increase 10.5% to $4.43 per share. Vertiv raised full-year 2026 guidance to approximately $14 billion in net sales and adjusted earnings of $6.65 to $6.75 per share, with its 2026 earnings estimate moving 3.6% higher to $6.64 per share. Fortinet lifted its full-year 2026 revenue growth target to 19%, implying $8.02 to $8.18 billion, and its 2026 earnings estimate advanced 8.3% to $3.40 per share.

A growing number of companies are raising their profit outlooks despite macroeconomic uncertainty. More S&P 500 firms are lifting guidance than cutting it, and Wall Street analysts have raised third-quarter earnings estimates for the index for the second consecutive quarter. Argus research analyst Christine Dooley views consistent guidance raises as a catalyst for market-beating returns. Among the companies that have raised guidance in the second quarter so far are Cheesecake Factory, Ford, General Motors, Hasbro, Starbucks, Coca-Cola, Charles Schwab, PayPal, US Bancorp, ASML, Seagate Technology, Supermicro Computer, Bristol Myers Squibb, Johnson & Johnson, UnitedHealth Group, 3M, Lockheed Martin, Northrop Grumman, United Airlines, and United Parcel Service.

Zacks Investment Research added five stocks to its Zacks Rank Number 1 Strong Buy list on July 31st. ASML Holding saw its current-year earnings consensus estimate rise 17.5% over the last 60 days. Invesco's estimate increased 8.5%, Citigroup's rose 5.1%, KLA's climbed 4.6%, and The Cheesecake Factory's estimate went up 2.5%.

The Cheesecake Factory reported quarterly revenues surpassing $1 billion for the first time in company history, driven by 2.7% traffic growth. Total revenues reached just over $1 billion for the second quarter ended June 30, compared with $955.8 million a year earlier, while net income rose to $68.4 million or $1.41 per share from $54.8 million or $1.18 per share. Same-store sales grew 5.8% year over year, led by the flagship Cheesecake Factory brand, and the company cited operational excellence, menu innovation, and its rewards program as key factors. Among its subsidiaries, Flower Child posted a 13% increase in same-store sales, while North Italia saw a 3% decline. The company opened four new restaurants during the quarter, ending with 375 locations across its portfolio.

The Cheesecake Factory declared a quarterly dividend of $0.30 per share. The dividend carries a forward yield of 1.35% and is payable on August 25 to shareholders of record as of August 11, with the ex-dividend date also set for August 11.

Zacks Equity Research identifies The Cheesecake Factory, BJ's Restaurants, and Chipotle Mexican Grill as restaurant stocks likely to surpass second-quarter 2026 earnings expectations. Cheesecake Factory reports on July 28 with an Earnings ESP of plus 2.76 percent and a Zacks Rank of 3, while BJ's Restaurants reports on July 30 with an Earnings ESP of plus 7.51 percent and a Zacks Rank of 2. Chipotle Mexican Grill reports on July 29 with an Earnings ESP of plus 0.84 percent and a Zacks Rank of 3. The Zacks Retail-Wholesale sector's second-quarter earnings are expected to increase 9.1 percent year over year, with revenues projected to rise 6.6 percent. The analysis notes that restaurant spending remained resilient, with eating and drinking place sales reaching a seasonally adjusted 102.5 billion dollars in June, though elevated operating expenses and limited pricing flexibility likely constrained margins across the industry.

Shares of The Cheesecake Factory reached a record high after Citi Research raised its price target to $90, citing positive traffic growth. Analyst Jon Tower noted that the company's new mobile app, expanding rewards program, and free slice promotion may return the chain to positive traffic, while a more engaging social media strategy, growing relevance with younger customers, and the re-emergence of malls as entertainment destinations support a stronger same-store sales trajectory. Industry data showed foot traffic inflected positively in the second quarter, improving to a 2.9% gain from a 1.4% decline in the first quarter, and transactions improved to negative 0.6% from negative 2.1%. Tower raised 2026 earnings per share estimates to $4.18 from $4.09 and 2027 estimates to $4.74 from $4.55. The company is expected to report second-quarter earnings of $1.16 per share on $994.7 million in sales after the market closes on July 28.

Cheesecake Factory's stock has risen more than 50% year-to-date, driven by strong first-quarter 2026 earnings and growth from its Fox Restaurant Concepts portfolio. The company reported a top- and bottom-line beat on April 29, with year-over-year revenue growth of 5.6%, while the flagship brand posted comparable sales of 1.6% and industry-leading annualized unit volume of $12.8 million. Flower Child, a health-themed concept within the Fox Restaurant Concepts portfolio, led high-margin growth with first-quarter sales up 21%, comparable sales of 10%, and the portfolio's best restaurant margins at 19.6%. North Italia remains a key risk, with comparable sales down 2% and foot traffic off 6%, making a successful turnaround critical to sustaining the stock's outperformance. Following the rally, CAKE shares now trade at 19 times forward earnings and 1.02 times sales, a premium valuation on par with industry leaders like Darden Restaurants and Texas Roadhouse, and the stock received two analyst downgrades on June 15 from Citigroup and Northcoast Research.