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The Cheesecake Factory Incorporated CAKE has made strategic changes to its menu, introducing 22 new items while discontinuing 13. The additions include appetisers, main courses and mocktails.
Shares of this U.S.-based casual dining chain gained 5.1% during the trading session yesterday. Investors’ sentiments are likely to be boosted by the potential impact of the updated menu on customer demand and sales performance.
More on Cheesecake Factory’s Menu Update
The Cheesecake Factory has removed several items from its menu, including select pizzas, burgers, pasta and seafood dishes. Two "SkinnyLicious" options have also been discontinued.
New additions include Chicken Shawarma, Mortadella Panino, grilled seafood, steak dishes and lighter options. The "SkinnyLicious" menu now features a new seafood dish. Other updates include a new dessert for kids and a selection of beverages. This adjustment reflects the company's efforts to refine its offerings, cater to shifting consumer preferences and enhance dining experiences.
Focus on Menu Innovation Bodes Well for CAKE
Cheesecake Factory operates 352 restaurants in the United States and Canada, along with 34 international locations through licensing agreements. The company continues to expand its menu with new offerings across different cuisines and price ranges. CAKE updates its menu twice a year and adjusts prices to manage rising operating costs. This strategy helps maintain margins while supporting customer traffic.
On fourth-quarter fiscal 2024 earnings call, Cheesecake Factory announced the launch of more than 20 new menu items across different cuisines and price ranges. Going forward, the company remains focused on innovation to stay competitive while avoiding heavy discounting.
CAKE’s Price Performance
Image Source: Zacks Investment Research
Shares of Cheesecake Factory have gained 24.5% in the past six months against the Zacks Retail – Restaurants industry’s decline of 0.8%. The company is benefiting from strong consumer demand, improving comparable sales and restaurant openings. Also, the focus on FRC-related differentiated concepts and menu innovation bodes well.
Earnings estimates for 2025 have increased to $3.72 per share from $3.70 in the past 30 days. The estimated figure indicates 8.1% growth from 2024.
CAKE’s Zacks Rank & Key Picks
Cheesecake Factory currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
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Brinker International, Inc. EAT currently sports a Zacks Rank of 1. EAT delivered a trailing four-quarter earnings surprise of 24.7%, on average. The stock has surged 100.7% in the past six months.
The Zacks Consensus Estimate for EAT’s fiscal 2025 sales and EPS indicates a rise of 18.7% and 102.4%, respectively, from the year-ago period’s levels.
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The Zacks Consensus Estimate for SFM’s 2025 sales and EPS indicates a rise of 12% and 24.3%, respectively, from the year-ago period’s levels.