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Cheesecake Factory Profit Jumps 19% on Strong Sales

October 22, 2003|Karen Robinson-Jacobs | Times Staff Writer

New restaurants and better weather helped Cheesecake Factory Inc. post a 19% jump in its third-quarter profit on a 22% hike in revenue, the Calabasas-based chain said Tuesday.

Cheesecake Factory's net income in the period ended Sept. 30 was $14.4 million, or 28 cents a share, compared with $12.1 million, or 24 cents, a year earlier. Total revenue was $197.8 million, compared with $162 million a year earlier.

The company released its results after the stock market closed. Cheesecake shares lost $1.13 on Tuesday to $35.65 on Nasdaq.

Sales at Cheesecake Factory restaurants open at least 18 months, a key measure of financial health, rose 1.8% in the quarter. Also, average total weekly sales, which includes newer restaurants, climbed 1.5% compared with the third quarter a year earlier, returning to positive territory for the first time since 2002.

For the last three quarters, sales at the casual-dining chain known for its oversized portions and expansive menu had been hurt by storms and inclement weather. Patio seating accounts for about 17% of store capacity, the company said.

"Weather issues were plaguing their sales for the past three quarters," said Sharon Zackfia, an analyst with Chicago-based William Blair & Co. "We were optimistic that they would rebound to more normalized [sales] this quarter, and that is what in fact occurred."

Revenue also was helped by the opening of three new restaurants during the quarter. Five additional eateries are scheduled to open by year's end. Next year the company plans to open as many as 16 new units, including two of its higher-end Grand Lux Cafes.

The company had 70 restaurants in about two dozen states at the end of the quarter, compared with 58 a year earlier.

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