CAKE Could Minimum-Wage Increases Hurt More than Usual in 2021
By Mark Kalinowski
Published on July 15, 2020 at 12:00 AM
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 the minimum-wage factor remains The Cheesecake Factory, which owns and operates all 200+ of its namesake restaurants in the U.S.