Restaurant company Cheesecake Factory (NASDAQ: CAKE) announced better-than-expected revenue in Q1 CY2026, with sales up 5.6% year on year to $978.8 million. Its non-GAAP profit of $1.05 per share was 3.5% above analysts’ consensus estimates.
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The Cheesecake Factory (CAKE) Q1 CY2026 Highlights:
- Revenue: $978.8 million vs analyst estimates of $964.4 million (5.6% year-on-year growth, 1.5% beat)
- Adjusted EPS: $1.05 vs analyst estimates of $1.01 (3.5% beat)
- Adjusted EBITDA: $83.03 million vs analyst estimates of $83.09 million (8.5% margin, in line)
- Operating Margin: 5.6%, in line with the same quarter last year
- Locations: 370 at quarter end, down from 389 in the same quarter last year
- Same-Store Sales rose 1.6% year on year, in line with the same quarter last year
- Market Capitalization: $3.12 billion
“We delivered strong first quarter results, with revenue, margins and earnings finishing above our expectations,” 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 sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $3.80 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 seven years was decent as it opened new restaurants and expanded its reach.
This quarter, The Cheesecake Factory reported year-on-year revenue growth of 5.6%, and its $978.8 million of revenue exceeded Wall Street’s estimates by 1.5%.
Looking ahead, sell-side analysts expect revenue to grow 4.3% over the next 12 months, a slight deceleration versus the last seven 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 370 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 4.6% 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
The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. 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 rose 1.6% year on year. This performance was more or less in line with its historical levels.
Key Takeaways from The Cheesecake Factory’s Q1 Results
We enjoyed seeing The Cheesecake Factory beat analysts’ same-store sales expectations this quarter. We were also happy its revenue and EPS both narrowly outperformed Wall Street’s estimates. Overall, we think this was still a solid quarter with some key areas of upside. The stock traded up 1.9% to $63.91 immediately after reporting.
The Cheesecake Factory may have had a good quarter, but does that mean you should invest 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).
