Cheesecake Factory Inc (NASDAQ:CAKE) stock was getting smashed on Tuesday following an update to its guidance for its fiscal second quarter of 2017.
Cheesecake Factory Inc says that it is expecting comparable sales for its fiscal second quarter of 2017 to be down by 1%. It says that it expects this to affect its margins and earnings per share for the quarter.
Cheesecake Factory Inc says that the decrease in comparable sales has to do with poor weather in certain parts of the United States. The company points to softer than expected sales in the East and Midwest as a result of this. It claims the bad weather didn’t allow it to use its patios as much as it expected.
Despite the decrease in comparable sales in these areas of the United States, Cheesecake Factory Inc is still assuring investors that the brand is still as strong as before. It points to increasing comparable sales in California, Texas and Florida as evidence of this.
“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,” David Overton, Chairman and CEO of Cheesecake Factory Inc, said in a statement. “More broadly however, we have seen heightened volatility in week to week sales trends, indicative of uncertainty on the part of many consumers.”
Wall Street is expecting Cheesecake Factory Inc to report earnings per share of 86 cents on revenue of $586.62 million for its fiscal second quarter of 2017.
CAKE stock was down 9% as of Tuesday morning and is down 12% year-to-date.