Cheesecake Factory Inc. (NASDAQ: CAKE) watched its shares crumble on Tuesday after it gave an update for its second-quarter outlook. As a result, the company is looking at its largest single-day loss since 2009.
According to the updated outlook, Cheesecake Factory expects comparable sales for the fiscal second quarter to be down roughly 1%. In turn, the restaurant chain now expects this to affect second-quarter margins and earnings per share.
Thomson Reuters has consensus estimates of $0.86 in earnings per share (EPS) and $586.62 million in revenue for the fiscal second quarter. The same period of last year reportedly had EPS of $0.78 and $558.86 million in revenue.
David Overton, board chair and chief executive, commented:
We have continued to outperform the casual dining industry quarter to date, with over half of our regions posting positive comparable sales for the period, including key markets of California, Texas and Florida. More broadly however, we have seen heightened volatility in week to week sales trends, indicative of uncertainty on the part of many consumers. Specifically, we have seen pockets of softness as we moved through the quarter, notably in the East and Midwest where we also faced unfavorable weather that reduced patio usage.
Excluding Tuesday’s move, the stock is actually down about 2.6% year to date. Over the past 52 weeks, the stock is up 16%.
Shares of Cheesecake Factory were last seen down about 9% at $53.20 on Tuesday, with a consensus analyst price target of $62.04 and a 52-week range of $46.93 to $67.14.