Restaurant company Cheesecake Factory (NASDAQ: CAKE) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 4.4% year on year to $961.6 million. Its non-GAAP profit of $1 per share was 1.5% above analysts’ consensus estimates.
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The Cheesecake Factory (CAKE) Q4 CY2025 Highlights:
- Revenue: $961.6 million vs analyst estimates of $948.4 million (4.4% year-on-year growth, 1.4% beat)
- Adjusted EPS: $1 vs analyst estimates of $0.99 (1.5% beat)
- Adjusted EBITDA: $61.91 million vs analyst estimates of $85.44 million (6.4% margin, 27.5% miss)
- Operating Margin: 3.5%, down from 5.1% in the same quarter last year
- Locations: 371 at quarter end, down from 382 in the same quarter last year
- Same-Store Sales fell 2.2% year on year (1.8% in the same quarter last year)
- Market Capitalization: $3.12 billion
“We delivered solid fourth quarter and full-year results in 2025, generating record annual revenue supported by 25 new restaurant openings for the year,” said David Overton, Chairman and Chief Executive Officer.
Company Overview
Celebrated for its delicious (and free) brown bread, gigantic portions, and delectable desserts, Cheesecake Factory (NASDAQ: CAKE) is an iconic American restaurant chain that also owns and operates a portfolio of separate restaurant brands.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $3.75 billion in revenue over the past 12 months, The Cheesecake Factory is one of the larger restaurant chains in the industry and benefits from a well-known brand that influences consumer purchasing decisions.
As you can see below, The Cheesecake Factory’s 7.1% annualized revenue growth over the last six years was decent as it opened new restaurants and expanded its reach.
This quarter, The Cheesecake Factory reported modest year-on-year revenue growth of 4.4% but beat Wall Street’s estimates by 1.4%.
Looking ahead, sell-side analysts expect revenue to grow 4.3% over the next 12 months, a slight deceleration versus the last six years. This projection is underwhelming and indicates its menu offerings will see some demand headwinds.
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Restaurant Performance
Number of Restaurants
A restaurant chain’s total number of dining locations often determines how much revenue it can generate.
The Cheesecake Factory operated 371 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 4.8% annual growth, much faster than the broader restaurant sector.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Same-Store Sales
A company's restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales is an industry measure of whether revenue is growing at those existing restaurants and is driven by customer visits (often called traffic) and the average spending per customer (ticket).
The Cheesecake Factory’s demand within its existing dining locations has barely increased over the last two years as its same-store sales were flat. The Cheesecake Factory should consider improving its foot traffic and efficiency before expanding its restaurant base.
In the latest quarter, The Cheesecake Factory’s same-store sales fell by 2.2% year on year. This decline was a reversal from its historical levels.
Key Takeaways from The Cheesecake Factory’s Q4 Results
It was good to see The Cheesecake Factory narrowly top analysts’ revenue expectations this quarter. On the other hand, its EBITDA missed and its same-store sales fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 6.2% to $60.00 immediately following the results.
The Cheesecake Factory didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
