Recent Posts

CAKE: Two Growing Opportunities for The Cheesecake Factory

There appear to be at least two growing opportunities for The Cheesecake Factory. First, ghost kitchens seem to be well-aligned with the goals of the company’s bakery business. Second, Europe represents an opportunity. We are likely getting closer than ever to the company’s opening (most probably via a licensed partner) of the first Cheesecake Factory restaurant in Europe. And even if this latter opportunity doesn’t happen any time soon, perhaps there have been some hints […]

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4:56 PM

CAKE (Post-Call): Margins Coming Back as Guests Come Back

After Tuesday’s market close, The Cheesecake Factory reported adjustedQ2 EPS of $0.80, ahead of our $0.63 forecast and sell-side consensus (according to Consensus Metrix) of $0.77. Factors contributing to the Q2 EPS outperformance relative to our forecasts include: (1) Cost of Sales/Revenues 22.0% actual vs. 22.5% projected, (2) Labor Expenses/Revenues 35.7% actual vs. 36.1% projected, and (3) D&A/Revenues 2.9% actual vs. 3.3% projected. Second-quarter same-store sales for brand Cheesecake Factory rose by +150.0%, slightly exceeding […]

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8:15 PM

CAKE: Updating Our Same-Store Sales and EPS Estimates

With this note, we raise our full-Q2E same-store sales forecast for brand Cheesecake Factory to +149.0% (from +142.5%). Our updated +149.0% projection implies a two-year sales figure of about +7.3% for full-Q2E. As of this writing, sell-side consensus is at +145.3% for the one-year number. On June 2nd, The Cheesecake Factory provided a business update in which it commented that for “Fiscal 2021 second quarter-to-date through May 31st comparable sales for The Cheesecake Factory restaurants […]

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5:00 PM

CAKE (Post-Call): Off-Premise Holding In as Guests Re-Enter Dining Rooms

After Wednesday’s market close, The Cheesecake Factory reported adjusted Q1 EPS of +$0.20. This surpassed our +$0.05 forecast and sell-side consensus (according to Consensus Metrix) of -$0.07. Factors behind the outperformance relative to our forecast include: (1) Cost of Sales/Revenues (21.7% actual vs. 22.7% forecasted), (2) Labor Expenses/Revenues (36.6% actual vs. 37.7% projected, and (3) D&A/Revenues (3.5% actual vs. 3.8% estimated), partially offset by (1) Other Operating Expenses/ Revenues (28.2% actual vs. 27.7% forecasted), and […]

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1:03 PM

CAKE: How Does Cheesecake Factory Trade Heading Into, and After, Earnings?

The Cheesecake Factory likely will release its Q1 2021 earnings in late April or early May. How do CAKE shares tend to trade heading into earnings, and the day after an earnings release? To answer those questions, we compiled data for the 24 prior earnings releases from The Cheesecake Factory, examining the stock’s absolute performance, and performance relative to the S&P 500, for two time periods: (1) the week ahead of the scheduled earnings release, […]

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4:44 PM

CAKE (Post-Call): Q4 Disappoints, But Q1 Showing Sequential Improvement

After today’s (Wednesday’s) market close, The Cheesecake Factory reported adjusted Q4 EPS of -$0.32, below our +$0.06 forecast and sell-side consensus (according to Consensus Metrix) of -$0.02. Fourth-quarter same-store sales for brand Cheesecake Factory declined by -19.5%. This was worse than our -13.5% projection and consensus of -12.5%. The -19.5% fullQ4 figure includes a -8% decline for October, and a -32% number for December. While the same-store sales shortfall contributed to the earnings miss, we […]

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4:53 PM

Casual Dining Market Share Opportunities for Large Concepts

About six months ago, we published a report examining market-share opportunities within the casual dining sector. In this report, we update our numbers. One of the important changes is that we now look for 8%-20% of the casual dining restaurants in the U.S. that were in operation as of the start of 2020 to be closed permanently by the end of March 2021. (Previously, we were looking for 3%-15% of casual dining restaurants to be […]

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12:00 AM

Updating our Q4E Kalinowski Casual Dining Same-Store Sales Index

With this report, we update our data-driven Kalinowski Casual Dining Index for Q4E to -18.4%. This figure is based on our latest proprietary checks/data as regards samestore sales performance for this segment during October and November. Our implied numbers for these October, November, and December are approximately -14%, -19%, and -22%, respectively. Optimists (including us) will point out that at some point in 2021, perhaps even in early 2021, trends should start to improve again […]

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12:00 AM

CAKE (Post-Call) Bakes Up More Sequential Same-Store Sales Improvement

After Thursday’s market close, The Cheesecake Factory (CAKE; Neutral, $29.94) reported adjusted Q3 EPS of -$0.33, better than our forecast of -$0.45, and also better than sell-side consensus (according to Consensus Metrix) of -$0.37. Same-store sales for brand Cheesecake Factory declined by -23.3% in Q3, as compared to our -26.5% forecast and consensus of -27.1%. Q4-to-date (through October 27th) same-store sales are down by about -7%. This is meaningfully better than our full-Q4E estimate entering […]

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12:00 AM

Updating our Q3E Kalinowski Casual Dining Same-Store Sales Index

With this report, we update our data-driven Kalinowski Casual Dining Index for Q3E to -19.6%. This figure is based on our latest proprietary checks/data as regards same-store sales performance for this segment during July, August, and September. Our implied numbers for these three months are about -24%, -19%, and -16%, respectively. At present, sell-side consensus is less optimistic than us as regards the casual dining segment’s same-store sales for the third quarter. When we weight […]

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12:00 AM

CAKE Introducing EPS Estimates (& Updating Our Q3E Same-Store Sales Forecast

With this report, we introduce our quarterly EPS estimates for The Cheesecake Factory (CAKE; Neutral, $29.32) for 2021E as follows: Q1E: $0.14, Q2E: $0.32, Q3E: $0.26, Q4E: $0.33 These quarterlies sum to our (unchanged) full-year 2021E EPS forecast of $1.05. With this report, we also introduce our full-year 2022E EPS projection of $1.70. Please be aware that 2022 is a 53-week fiscal year for The Cheesecake Factory. For the most recent 53- week fiscal year, […]

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12:00 AM

CAKE (Post-Call) Brand CAKE Same-Store Sales for July 1-26 about -32%

After today’s market close, The Cheesecake Factory (CAKE; Neutral, $26.57) reported adjusted Q2 EPS of -$0.87, better than our -$1.00 forecast and sell-side consensus (according to Consensus Metrix) of -$1.09. The diluted share count used in the calculation is about 52.8 million, quite different from our 46.4 million estimate and consensus of 46.5 million. The reason for the higher actual “Represents the impact of assuming the conversion of preferred stock into common stock (8,996,851 shares).” […]

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12:00 AM

CAKE Could Minimum-Wage Increases Hurt More than Usual in 2021

Given risks to The Cheesecake Factory’s (CAKE; Neutral, $20.57) labor costs — as little-to-no states and local municipalities appear willing to budge on planned minimum-wage hikes, despite extraordinary economic challenges facing the U.S. restaurant industry (and especially full-service restaurants) — we lower our 2020E and 2021E EPS estimates for the company by -20 cents and -35 cents, respectively, to -$1.40 and +$1.05. In our coverage list the company most likely to be affected due to […]

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12:00 AM

Casual Dining Market Share Opportunities for Large Concepts 6.25

Is it possible the Street is underestimating sales and market-share opportunities in 2021 for many of the larger publicly-traded casual dining concepts? We believe that the top ten casual dining concepts in the U.S. generated aggregate 2019 U.S. sales of about $29.3 billion, giving these concepts in aggregate about 14.4% market share of the $203.6 billion casual dining sector. Market-share opportunities for these ten concepts could come about as smaller chains and mom-and-pops independents encounter […]

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12:00 AM

CAKE Cheesecake Factory Desserts Available from Multiple Ghost Kitchens

A company called Ghost Kitchens is offering desserts from The Cheesecake Factory (CAKE; Neutral, $19.97) Bakery from at least five different locations in Canada, Kalinowski Equity Research LLC has learned. For example, the following is listed on DoorDash’s website in Calgary, Alberta, Canada: GHOST KITCHENS PRESENTS CHEESECAKE FACTORY BAKERY Read the Full Report

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12:00 AM

CAKE (Post-Call) Preparing to Re-Open Some Dining Rooms as Soon as Next Week

After today’s market close, The Cheesecake Factory (CAKE; Neutral, $19.52) reported adjusted Q1 EPS of +$0.04, one cent above our +$0.03 forecast, and well above sellside consensus (according to Consensus Metrix) of -$0.39. Nevertheless, reflecting reductions in our same-store sales projections for Q2E-Q4E, our EPS estimate for full-2020E goes down by -58 cents, to -$1.20. Also, given this lower anticipated base of earnings coming off of this year, we reduce our 2021E EPS forecast by […]

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12:00 AM

CAKE Updating our Same-Store Sales and EPS Estimates for 2020E & 2021E

We lower our U.S. same-store sales estimates for The Cheesecake Factory (CAKE; Neutral) as follows: Q1E 2020: down by -23 percentage points to -21.0% Q2E 2020: down by -51.5 percentage points to -50% Q3E 2020: down by -26.5 percentage points to -25% Q4E 2020: down by -16.5 percentage points to -15% Full-year 2020E: down by -29.4 percentage points to -27.8% Full-year 2021E: up by +8.5 percentage points to +10.0% (Please note that the forecasts above […]

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12:00 AM

CAKE Highlights from Our Conference Call Featuring The Cheesecake Factory

This past Thursday afternoon, we hosted the latest in our “Ask the Experts” series of conference calls, this time around with featured speakers from The Cheesecake Factory: Executive Vice President and Chief Financial Officer (CFO) Matt Clark, and Senior Director, Investor Relations Stacy Feit. Here are some brief highlights from this call: * In terms of food trends, management points out that health and wellness continues to be a very broad umbrella. International flavors as […]

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12:00 AM

CAKE Ask the Experts Call Series The Cheesecake Factory

Kalinowski Equity Research invites you to participate in our latest “Ask the Experts” conference call, to take place on Thursday, March 5th starting at 2:00 PM Eastern time. The featured speakers will be The Cheesecake Factory’s Executive Vice President and Chief Financial Officer (CFO) Matt Clark, and Senior Director, Investor Relations Stacy Feit. We encourage you to participate in this call by dialing (800) 346-7359 just prior to the March 5th call’s 2:00 PM Eastern […]

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12:00 AM

CAKE (Post-Call) Lots of Moving Pieces, But the Overall Cake Looks A-OK

Kalinowski Equity Research invites you to participate in our latest “Ask the Experts” conference call, to take place on Thursday, March 5th starting at 2:00 PM Eastern time. The featured speakers will be The Cheesecake Factory’s Executive Vice President and Chief Financial Officer (CFO) Matt Clark, and Senior Director, Investor Relations Stacy Feit. We encourage you to participate in this call by dialing (800) 346-7359 just prior to the March 5th call’s 2:00 PM Eastern […]

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12:00 AM

CAKE “Ask the Experts” Call Series The Cheesecake Factory

Kalinowski Equity Research invites you to participate in our latest “Ask the Experts” conference call, to take place on Thursday, March 5th starting at 2:00 PM Eastern time. The featured speakers will be The Cheesecake Factory’s Executive Vice President and Chief Financial Officer (CFO) Matt Clark, and Senior Director, Investor Relations Stacy Feit. We encourage you to participate in this call by dialing (800) 346-7359 just prior to the March 5th call’s 2:00 PM Eastern […]

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12:00 AM

CAKE (Post-Call) Baking Up an Evolving Company

After today’s (Tuesday’s) market close, The Cheesecake Factory (CAKE; Neutral) reported adjusted Q3 EPS of $0.59, coming in ahead of our $0.55 forecast and sellside consensus (according to Consensus Metrix) of $0.55. We attribute the betterthan-expected earnings to favorable Cost of Sales/Revenues (22.7% actual vs. 23.4% forecasted). Third-quarter same-store sales for brand Cheesecake Factory rose by +0.4% during Q3, close to our +0.2% projection and sell-side consensus of +0.5%. Management indicated that weather and “other […]

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12:00 AM

CAKE Updating Introducing EPS Estimates Macau and New Menu Items

With this report, we reduce our Q3E same-store sales forecast for brand Cheesecake Factory (CAKE; Neutral) by -30 basis points, to +0.2%, placing us as the low forecast on the sell-side according to Consensus Metrix data. Our adjustment reflects weak casual-dining sector same-store sales trends for July and August, partially offset by The Cheesecake Factory’s relatively healthier brand (destination status) within casual dining. Our Q3E EPS estimate goes down by $0.01 to $0.55, placing us […]

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12:00 AM

CAKE What Does the Fox Say “Thank You to The Cheesecake Factory

After today’s market close, The Cheesecake Factory (CAKE; Neutral) reported adjusted Q2 EPS of $0.82, matching our $0.82 projection, and coming in one cent above sell-side consensus (according to Consensus Metrix) of $0.81. Second-quarter same-store sales at brand Cheesecake Factory rose by +1.0%, coming in a little short of our +1.8% estimate and sell-side consensus of +2.0%. For Q3 2019, The Cheesecake Factory targets adjusted EPS of $0.52-0.57. We lower our Q3E EPS estimate by […]

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12:00 AM

Updating our Q2E19 Kalinowski Casual Dining Same-Store Sales Index

With this report, we lower our data-driven Kalinowski Casual Dining Index for Q2E by 40 basis points, to +1.9%. This figure is based on our latest proprietary checks/data as regards same-store sales performance for this segment during April 2019 and the first half of May 2019. At present, sell-side consensus is a little more optimistic than us as regards Q2E. When we weight the segment components identically as they’re weighted in the Kalinowski Casual Dining […]

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12:00 AM

Are Protein Costs Poised to Accelerate Over 2019-21

African Swine Fever (ASF) is spreading rapidly not only in China — where it seems as many hogs have been culled from herds in that country as there are born in the entire United States in any given year — but also in other parts of Asia, not to mention parts of Europe. Based on our conversations with suppliers to the restaurant industry, and also with privately-held restaurant companies, we believe that commodity-cost risks over […]

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12:00 AM

CAKE Cites Potential of 200 North Italia Units for the U.S. Over Time

After today’s market close, The Cheesecake Factory (CAKE; Neutral) reported Q1 2019 adjusted EPS of $0.62, ahead our $0.61 forecast and sell-side consensus (according to Consensus Metrix) of $0.60. First-quarter same-store sales at brand Cheesecake Factory rose by +1.3%, as compared to our projection of +1.2% and consensus of +1.0%. In the first quarter, menu pricing was +3.0 percentage points, mix shift contributed another +1.8 percentage points, and same-store traffic was down by -2.5 percentage […]

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12:00 AM

Tidbits re U.S. Burger-Sector Market Share Trends, Burger King, and CAKE

We briefly note the following tidbits regarding burger-sector market-share trends in the U.S., Burger King (owned by Restaurant Brands International [QSR; Not Rated]), and The Cheesecake Factory (CAKE; Neutral): * U.S. BURGER-SECTOR MARKET-SHARE TRENDS. In the U.S., the quick-service burger segment generated $84.74 billion in sales during 2018, according to data from Technomic. This represents year-over-year growth of +2.7%. Putting these numbers in context, the overall U.S. restaurant industry totaled about $556.36 billion in 2018 […]

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12:00 AM

Introducing our Q1E19 Kalinowski Casual Dining Index

With this report, we introduce our data-driven Kalinowski Casual Dining Index for Q1E at +1.9%. This figure is based on our latest proprietary checks/data as regards samestore sales performance for this segment during January 2019 and most of February 2019. At present, sell-side consensus is a little more optimistic than us as regards Q1E. When we weight the segment components identically as they’re weighted in the Kalinowski Casual Dining Index, and apply the current sell-side […]

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12:00 AM

CAKE (Post-Call) The Compass at the Factory Points Toward North Italia

After today’s (Wednesday’s) market close, The Cheesecake Factory (CAKE; Neutral) reported Q4 2018 adjusted EPS of $0.60, a bit short of our $0.63 forecast and sellside consensus (according to Consensus Metrix) of $0.62. We attribute the shortfall to about $2.1 million in the “Loss on investment in unconsolidated affiliates” line, which on an EPS basis hampered Q4 EPS by about -$0.04. Fourth-quarter same-store sales rose by +1.9% at brand Cheesecake Factory, 30 basis points better […]

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12:00 AM

Tidbits re DNKN, Taco Bell (owned by YUM), and CAKE

We briefly note the following tidbits regarding Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]), Taco Bell (owned by Yum Brands [YUM; Buy]), and The Cheesecake Factory (CAKE; Neutral): * DUNKIN’. We look for Dunkin’ to introduce an Irish Creme Swirl and a Mint Brownie Donut as part of the promotional approach for March 2019. In addition, a $2 medium iced coffee for the hours of 2-6 PM could be part of the promotional calendar […]

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12:00 AM

Restaurants The Set-Up into the Print re CAKE, WEN, DIN, DPZ, and PZZA

A number of restaurant companies are scheduled to report quarterly earnings over the February 20-26 time frame, including The Cheesecake Factory (CAKE; Neutral), Wendy’s (WEN; Neutral), Dine Brands (DIN; Buy), Domino’s (DPZ; Buy), and Papa John’s (PZZA; Neutral). In this report, we look at the set-up into the print for each of these five companies: * THE CHEESECAKE FACTORY. The Cheesecake Factory is scheduled to report its Q4 2018 earnings after the market close on […]

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12:00 AM

Updating our Q4E19 Kalinowski Casual Dining Same-Store Sales Index (Again)

With this report, we (again) raise our data-driven Kalinowski Casual Dining Index for Q4E, this time around from +2.1% to +3.1%. This 100 basis-point increase is based on our latest proprietary checks/data as regards same-store sales performance for this segment during the second half of November and all of December. (We had previously increased our Kalinowski Casual Dining Index for Q4E from +1.6% to +2.1% back on December 4th.) Sell-side consensus is definitely more pessimistic […]

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12:00 AM

CAKE Updating Our Q4E Forecasts Ahead of 2.20 Earnings Release

Ahead of The Cheesecake Factory’s (CAKE; Neutral) fourth-quarter earnings release scheduled for after the market close on Wednesday, February 20th, we bump up our Q4 2018 same-store sales forecast for brand Cheesecake Factory by +60 basis points to a new sell-side high projection (according to Consensus Metrix data) of +1.6%. Sell-side consensus as of this writing is at +1.0%. Although our updated same-store sales forecast does not change our already aboveconsensus Q4E EPS estimate of […]

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12:00 AM

Tidbits re MCD, Luckin Coffee, CAKE, and DNKN

We briefly note the following tidbits regarding McDonald’s (MCD; Buy), privatelyheld Luckin Coffee, The Cheesecake Factory (CAKE; Neutral), and Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]): * McDONALD’S. Business Insider reports that “McDonald’s is taking a page out of Dunkin’s playbook to drum up excitement about breakfast. In February the chain plans to launch ‘Donut Sticks’ as a limited-time offering, according to internal documents viewed by Business Insider. The strips of deep-fried dough, sprinkled […]

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12:00 AM

Tidbits re DNKN, Burger King (owned by QSR), PZZA, & Inspire Brands CAKE

We briefly note the following tidbits regarding Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]), Burger King (owned by Restaurant Brands International [QSR; Not Rated]), Papa John’s (PZZA; Buy), and privately-held Inspire Brands as it relates to The Cheesecake Factory (CAKE; Neutral): * DUNKIN’. Breaking news! Dunkin’ is testing Bagel Minis in at least one market, according to an Instagram post we’ve seen, and info from our industry contacts. Read the Full Report

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12:00 AM

Updating our Q4E18 Kalinowski Casual Dining Same-Store Sales Index

With this report, we update our data-driven Kalinowski Casual Dining Index for Q4E from +1.6% to +2.1%. This 50 basis-point increase is based on our latest proprietary checks/data as regards same-store sales performance so far for this segment during October and the first half of November. Sell-side consensus is a little more pessimistic than us regarding the outlook for Q4E same-store sales for the casual dining sector. When we weight the segment components identically as […]

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12:00 AM

CAKE Our Meeting with Management in Calabasas

We recently met with The Cheesecake Factory (CAKE; Neutral) — including CFO Matthew Clark; Senior Director, Investor Relations Stacy Feit; and Senior Financial Analyst, Investor Relations Heather Livingston — in Calabasas, California. We thank them for their time! Topics of interest that we asked about include North Italia (an acquisition of which could transform the company quite meaningfully) and wage inflation (particularly important for a company which owns and operates 100% of its U.S. restaurants). […]

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12:00 AM

CAKE (Post-Call) Q3 Same-Store Sales a Little Less Fluffy Than Expected

After Tuesday’s market close, The Cheesecake Factory (CAKE; Neutral) reported Q3 adjusted EPS of $0.62, ahead of our $0.57 forecast and the sell-side consensus of $0.58, as measured by Consensus Metrix. By our math, a lower-than-expected tax rate (5.9% actual vs. 12.9% forecasted) helped Q3 EPS by about $0.04-$0.05. Third-quarter same-store sales for The Cheesecake Factory-brand restaurants rose by +1.5%, a little off of our recently-reduced +1.8% estimate, and below the +2.2% sell-side consensus. For […]

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12:00 AM

Tidbits re WEN, KFC (owned by YUM), CAKE, Acquisition Activity, & Focus Brands

We briefly note the following tidbits regarding Wendy’s (WEN; Neutral), KFC (owned by Yum Brands [YUM; Buy]), The Cheesecake Factory (CAKE; Neutral), possible acquisition activity by privately-held Inspire Brands (owned by privately-held Roark Capital), and privately-held Focus Brands (also owned by Roark Capital): * WENDY’S. Breaking news! We look for Wendy’s to nationally launch a Bacon Maple Chicken Sandwich on (or about) November 20th. * KALINOWSKI’S TAKE. Wendy’s actually tested a Bacon Maple Chicken Sandwich […]

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12:00 AM
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