Cheesecake Factory Earnings Leave Sweet Taste, But Analyst Sees Tariff Trouble Brewing

Stephens analyst Jim Salera reiterated the Overweight rating on The Cheesecake Factory Incorporated (NASDAQ:CAKE), with a price forecast of $60.

On Wednesday, the company reported first-quarter revenues of $927.2 million, up from $891.2 million in the year-ago period.

Salera highlighted that the company's strong margin management drove outperformance across restaurant-level margins, adjusted EBITDA, and adjusted EPS.

However, despite stable underlying sales trends, its revised outlook signals caution. It anticipates a softer consumer environment amid rising economic concerns and tariff-related uncertainty.

Also Read: US Restaurants Face Growth Hurdles As Macro Headwinds Mount, Says Analyst

Salera says shares remain well positioned for continued momentum through fiscal 2025. Gradually improving same-store sales, year-over-year margin expansion at the restaurant level, and increased unit growth drive the outlook.

The analyst notes that these positive trends are built on a strong foundation of steady consumer demand at its Cheesecake Factory locations, driven by its broad, crowd-pleasing menu that appeals to a wide range of guests.

The analyst noted that for 2025, their EBITDA forecast was lowered from $323.5 million to $317.6 million, and adjusted EPS was revised from $3.72 to $3.68.

For 2026, the company reduced its EBITDA estimate from $348.8 million to $343.3 million. It also trimmed adjusted EPS from $4.14 to $4.09.

Salera noted that mix will likely remain a headwind through 2025, as customers continue favoring lower-priced items and non-alcoholic beverages.

Cheesecake Factor also plans a summer menu update, which should reinforce this value-focused trend, the analyst adds.

Price Action: CAKE shares are trading lower by 3.82% to $48.45 at last check Thursday.

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