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Garmin and Cheesecake Factory shares surge after earnings beats
Cheesecake Factory’s July 28 quarter marked its first ever $1 billion sales quarter and management lifted full-year and Q3 revenue guidance.
Garmin Ltd. and The Cheesecake Factory both delivered earnings beats that sent their shares sharply higher, with each company also raising guidance after the results, according to MarketBeat Ratings. Cheesecake Factory’s latest quarter, released July 28, showed year-over-year revenue growth of 7.7% and earnings per share growth of 19.5%, and it was the company’s first-ever $1 billion sales quarter. Management also raised both full-year and Q3 revenue guidance targets, following a stock run that includes gains of more than 100% year-to-date and more than 25% over the last month. Even so, MarketBeat Ratings notes that the details from Cheesecake Factory’s results suggest investors may need to look past the headline beat. Second quarter comparable sales grew 5.8% after a 1.6% increase in Q1, with the mix driven by 3.0% from pricing and 2.8% from traffic, and management highlighted traffic tied to the revamped Cheesecake Rewards app that offered a free piece of cheesecake to new users. MarketBeat Ratings adds that a promo-driven traffic spike may not hold once rewards are redeemed, and it flags margin pressures and limited upside room from analyst targets, noting that only Argus Research has a price target above the current market price while the consensus target implies more than 20% downside.