Cheesecake Factory profit beats Street view, shares rise
April 24 (Reuters) - Cheesecake Factory Inc rang up a better-than-expected first-quarter profit as more diners visited its restaurants and the company held costs in check, sending its shares up 7 percent in after-hours trading.
The upbeat results from chain, known for its ample portions and wide array of cheesecakes, come at a time when eateries are fighting to attract frugal diners in a weak economy.
"Restaurant cost of sales was favorable, with the key drivers being lower seafood and fish costs as well as better food efficiencies," Chief Financial Officer Doug Benn said on a conference call with analysts on Wednesday.
Miller Tabak analyst Stephen Anderson said he expects the company to continue to benefit from moderating commodity costs, adding that food costs in the quarter were a bit lower than expected.
McDonald's Corp said last week it was still looking for the right recipe to boost sales, which are being pinched by the weak global economy and stronger competition.
Darden Restaurants Inc, owner of the Olive Garden and Red Lobster chains, said last month it would offer a better selection of lower-priced fare to counter a fall in traffic. . Quarterly sales at Brinker International Inc's Chili's restaurants were also soft.
Cheesecake Factory reiterated that it would open eight to 10 company-owned restaurants this year.
The company said it expected a full-year profit of $2.12 to $2.18 per share. Analysts on average expected earnings of $2.14 per share, according to Thomson Reuters I/B/E/S.
Current-quarter earnings would likely be between 55 and 57 cents per share, the company said. Analysts on average expect 59 cents.
Cheesecake Factory's net income rose to $25.3 million, or 47 cents per share, in the quarter ended April 2, from $20.7 million, or 37 cents per share, a year earlier. Revenue rose 6 percent to $463 million.
Analysts on average had expected earnings of 42 cents per share on revenue of $455.6 million.
Shares of Calabasas Hills, California-based Cheesecake Factory closed at $37.74 on the Nasdaq on Wednesday. They have risen about 25 percent in the past year.