Yahoo Finance Cheesecake Factory Q1 Comps to Decline Due to Coronavirus
The Cheesecake Factory Incorporated CAKE recently provided first-quarter fiscal 2020 preliminary sales update. Considering the panoptic impact of coronavirus (COVID-19) pandemic on its business and the industry, the company’s performance is likely to be hurt in 2020.
Preliminary Sales
The company expects first-quarter fiscal 2020 comparable restaurant sales to be down nearly 13%. The company’s results reflect quarter to date through February comparable sales growth of roughly 3%, above the broader casual dining industry trend during that period. Due to coronavirus pandemic, comparable sales declined nearly 46% in March.
The Zacks Rank #3 (Hold) company announced that its off-premise model is in operation at the moment. Since fiscal fourth-quarter 2019, the company’s off-premise sales have increased 85%.
Year to date, shares of the company have fallen 61.1%, compared with the industry’s decline of 27.4%.
Coronavirus Hurts Restaurant Industry’s Traffic
The restaurant industry has been facing declining traffic for quite some time now. We believe the coronavirus outbreak will further hurt traffic and sales in the coming quarters.
Many companies have hinted about business disruptions in the United States, China and across Asia due to the deadly virus spread. The companies have also warned of soft sales trends on account of increased restaurant closures.
Stocks to Consider
Some better-ranked stocks worth considering in the same space include BJ's Restaurants, Inc. BJRI, Denny's Corporation DENN and Potbelly Corporation PBPB. All these stocks carry a Zacks rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BJ's Restaurants, Denny's and Potbelly have an impressive long-term earnings growth rate of 15%, 9% and 17.5%, respectively.
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The Cheesecake Factory Incorporated (CAKE) : Free Stock Analysis Report
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Denny's Corporation (DENN) : Free Stock Analysis Report
Potbelly Corporation (PBPB) : Free Stock Analysis Report
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