Cheesecake Factory lifts comparable sales 15.2% as customer traffic grows

Key Facts

Cheesecake Factory reported results on October 27 for the third quarter of fiscal 2026, ended September 29, with comparable sales at its restaurants up 15.2% year over year, after a 0.3% increase in the year-earlier quarter. Revenue was $1,033.4 million, compared with $907.2 million, and the chief executive said the company posted record quarterly revenue. He also said sales and customer traffic at the brand’s restaurants clearly outperformed the casual dining sector. The result reflected strength at the flagship brand during the quarter, while management remained cautious about how long the sales turnaround would last. The announcement came as investors watched the company’s momentum and the risks to its sustainability through 2027.

Net income under generally accepted accounting principles was $61.3 million, or $1.19 per diluted share, while adjusted net income was $52.3 million, with adjusted diluted earnings per share of $1.02. Management attributed sales growth to continued menu innovation, its rewards program and strong engagement across social media. The company said these factors "contributed to notable sales growth." It added that improved labor productivity and food efficiency supported profitability. The quarter’s performance therefore combined sales growth with operational factors that management said supported results, without settling the trajectory for coming quarters.

Results at the other brands showed a mixed picture across the portfolio. North Italia revenue was $93 million, while its comparable sales fell 3% in the third quarter. Its adjusted mature restaurant margin also declined to 13.2% from 15.7% a year earlier, with the drop attributed to weaker sales leverage. By contrast, Flower Child comparable sales rose 11%, and its two-year growth was 18%. Its adjusted mature restaurant margin reached 20.2%, up 280 basis points from the prior year, highlighting the differing performance trends among the brands in the same quarter.

Ahead of the results, UBS raised its price target on the stock to $80 from $60 but maintained a "Sell" rating, citing risks to the sustainability of momentum through 2027. The bank had expected comparable sales growth in the low double digits, compared with a consensus estimate of 9.1% for the third quarter. The company’s actual result was 15.2% for Cheesecake Factory restaurants. The stock closed at $108.47 on the day results were announced and was up 6.95% over three months and 99.65% over 12 months through that date. These are published closing-price and performance figures and do not include a later market close.

For coming periods, the company expects revenue of between $1.04 billion and $1.05 billion in the fourth quarter of 2026, and an adjusted net income margin of about 5.8% at the midpoint of the sales range. For fiscal 2027, it targets revenue of about $4.425 billion and a net income margin of between 6.0% and 6.1%. Management said the margin range is consistent with its long-term target of annual increases of 25 to 35 basis points. It also said the sales turnaround is recent and that it would remain cautious in its outlook for 2027 until trends become clearer. The guidance provides the company’s framework for the next quarter and following year, while management keeps its estimates tied to how trends develop.

On expansion, the company opened six restaurants in the third quarter: two Cheesecake Factory locations, one North Italia, one Flower Child and two FRC Group brands. Available liquidity on September 29 was $585.3 million, including $249.3 million in cash and $336.0 million available under its revolving credit facility, with no balance drawn. The company declared a quarterly cash dividend of $0.30 per share, payable on November 24 to shareholders of record on November 10. These items bring together its investment and expansion plans, available liquidity and announced cash return to shareholders. Fourth-quarter and fiscal 2027 guidance remain the key upcoming financial milestones cited in the company’s announcement.