April 23, 2009 / 8:47 PM / 11 years ago

UPDATE 2-Cheesecake Factory profit beats, shares up

* Q1 EPS 17 cents, tops Wall St view of 10 cents

* Overall same-restaurant sales fell 3.4 percent

* Shares jump 11 percent (Adds outlook, company comment; updates share activity)

LOS ANGELES, April 23 (Reuters) - The Cheesecake Factory Inc (CAKE.O) on Thursday posted first-quarter net income that fell 30 percent, but still topped analysts’ view with help from cost cutting, and shares jumped 11 percent.

Cheesecake Factory and other in middle-tier restaurant companies such as P.F. Chang’s China Bistro PFCB.O have been rewarded with big share gains after serving up better-than-expected results on tight expense management.

The company, known for its big portions and extensive menu, said net income fell 30 percent to $10.0 million, or 17 cents per share in the quarter, from $14.3 million, or 21 cents per share, a year earlier.

Analysts, on average, were looking for earnings of 10 cents per share, according to Reuters Estimates.

Total revenue slipped to $392.8 million from $393.8 million.

Overall sales at restaurants open at least 18 months fell 3.4 percent, which is derived from a 3.2 percent decline sales at Cheesecake Factory and a 5 percent drop at the company’s smaller Grand Lux chain.

Still, Chief Executive David Overton said in a conference call that first-quarter traffic to restaurants improved versus fourth-quarter levels. Results were weakest from states like California, Arizona and Florida, where foreclosure rates are among the nation’s highest.

While guests continued to order fewer alcoholic and nonalcoholic beverages, “dessert orders are up year-over-year, helping to boost our average check,” Overton said.

For the current second quarter, Cheesecake Factory forecast earnings of 19 cents to 21 cents per share, based on a 4 percent to 5 percent drop in same store sales. That sales assumption includes a price increase of 2.2 currently in our menu.

The company forecast 2009 earnings of between 67 cents and 75 cents per share, based on a 3 percent to 4.5 percent decline in sales at established restaurants.

Shares of Cheesecake Factory jumped to $16.55 in extended trading after closing at $14.92 on the Nasdaq. (Reporting by Lisa Baertlein)

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