The Cheesecake Factory might not be everyone’s model for how to decorate the White House. But on Wall Street, the faux-opulent chain has posted surprisingly strong returns for investors in a comparably tough time for the restaurant industry.
Analysts were predicting continued robust performance for a Tuesday evening earnings call, in a week when the restaurant chain has been dragged into a midterm-elections spat.
At a Saturday rally, former president Barack Obama joked that President Donald Trump’s gilded additions to the executive mansion looked like “Saddam Hussein opened a Cheesecake Factory.” Trump and allies have seized on the comment to defend the president’s renovations and paint Democrats as elitist and out of touch.
The company has yet to weigh in on the political discussion. But it promised prescheduled news on the earnings front.
Since January, the Cheesecake Factory’s stock, which trades under the ticker CAKE, has more than doubled to about $110 a share. In July, the company announced its first-ever financial quarter with more than $1 billion in earnings.
At a time when fewer and fewer Americans are choosing to eat out, Cheesecake Factory said it had seen a 5.8 percent growth in the second quarter year-over-year in comparable restaurant sales, a metric that tracks how well a restaurant performs relative to its peers in the industry. That was well ahead of expectations of about 2 percent, said analyst Jim Salera at financial services firm Stephens.
“Restaurant guests are being far more discerning about where they spend their dollars,” he said. “How you win in an environment where the overall pie is shrinking is deliver exceptionally high quality, both from a food quality standpoint but also from an experiential standpoint.”
The Cheesecake Factory Inc. actually owns 15 other chain restaurant brands — including North Italia and Flower Child — that factor into its stock price. But some of those brands have seen far slower growth than the main Cheesecake Factory brand, whose sales in the second quarter jumped 6.8 percent year-over-year.
The company has attributed its increased sales to a bump in customer traffic and an approximately 3 percent price increase. Despite the increase, customers appeared to continue opening their wallets, with the average check jumping 3.1 percent.
To analysts, Cheesecake Factory has managed to deliver on higher-end value while maintaining its encyclopedic menu to accommodate a wide range of customer preferences. Other tactics include a loyalty program as well as a viral TikTok trend featuring the restaurant’s Cajun salmon, said analyst Jim Sanderson at Northcoast Research.
“We think that was also a catalyst to traffic. It just got more consumers to reengage with the brand or to, let’s say, return after not having visited” for a while, Sanderson said.
The latest political dustup has also generated a minor uptick in Cheesecake Factory visits from the Trump administration. Treasury Secretary Scott Bessent dined at a location in the District on Monday and said he had the French dip cheeseburger.
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