10-Q · August 3, 2026
Cheesecake Factory's Q2 results improved meaningfully, with revenue up 7.7% to $1.0296 billion, GAAP EPS up 23.7% to $1.41 and operating margin expanding 80 basis points to 7.6%. Growth was led by 5.8% core-brand…
Earnings analysis · 10-Q
CAKE earnings analysis
Filed November 2, 2026 · Our reading of the company's report
The latest report
The third quarter showed strong year-over-year improvement, with revenue of $1,033.4 million, adjusted diluted EPS of $1.02 and operating margin of 7.2%, all supported by 15.2% comparable-sales growth at the core…
Read full summary
The third quarter showed strong year-over-year improvement, with revenue of $1,033.4 million, adjusted diluted EPS of $1.02 and operating margin of 7.2%, all supported by 15.2% comparable-sales growth at the core Cheesecake Factory brand. Sequentially, however, EPS declined from $1.41 and operating margin declined from 7.6%, while North Italia comparable sales remained negative. The company maintained its plan for as many as 26 fiscal-2026 openings, but the newly updated convertible-note risk creates a potentially significant cash requirement because the 2030 Notes may be converted during the quarter ending December 29, 2026.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.02
- Operating margin
- 7.2%
- Segment
- Cheesecake Factory: 15.2% comparable-sales growth; segment revenue was not disclosed in the supplied filing text.
- Segment
- North Italia: comparable sales declined; segment revenue was not disclosed in the supplied filing text.
- Segment
- Development guidance: up to 5 Cheesecake Factory, 8 North Italia, 7 Flower Child and 6 FRC openings in fiscal 2026.
What stood out
-
Revenue beat estimates and rose year over year
Third-quarter revenue was $1,033.4 million, up from $907 million in Q3 2025 but broadly flat versus $1.03 billion in Q2 2026. Revenue exceeded the $1,002.9 million consensus estimate by approximately $30.5 million.
-
EPS beat estimates, up year over year
Adjusted diluted EPS was $1.02 versus $0.66 in Q3 2025, a $0.36 increase, but declined from $1.41 in Q2 2026. EPS exceeded the $0.95 consensus estimate by $0.07.
-
Operating margin expanded year over year
Operating margin expanded to 7.2% from 4.1% in Q3 2025, a 310-basis-point improvement, although it declined 40 basis points from 7.6% in Q2 2026.
-
Core brand drove comparable-sales growth
The core Cheesecake Factory brand posted 15.2% comparable-sales growth, supporting the quarterly revenue performance.
-
No borrowings under revolving loan agreement
The company had no outstanding borrowings under its Loan Agreement as of September 29, 2026, compared with no outstanding borrowings as of December 30, 2025.
-
Restaurant development outlook maintained
The company maintained a development plan of as many as 26 fiscal-2026 openings, including 5 Cheesecake Factory, 8 North Italia, 7 Flower Child and 6 FRC locations.
What to watch
-
Cash settlement risk on convertible notes
The updated risk factor states that the 2030 Notes may become convertible during the quarter ending December 29, 2026 because the stock price exceeded 130% of the conversion price for at least 20 of 30 trading days. Conversions must be settled partially or entirely in cash, creating potential liquidity needs.
-
Debt covenants may limit note repurchases
The Loan Agreement restricts repurchases of the 2030 Notes following a fundamental change unless pro forma net adjusted leverage is no more than 4.25 to 1.00 and EBITDAR to interest and rental expense is at least 1.90 to 1.00.
-
Food-cost and commodity volatility
A hypothetical 1% increase in food costs would have reduced third-quarter cost of sales by an additional $2.2 million in 2026, versus $2.0 million in 2025. The company had no commodity hedging contracts in place as of September 29, 2026.
-
North Italia comps remained negative
North Italia comparable sales remained negative, contrasting with 15.2% comparable-sales growth at the core Cheesecake Factory brand and creating uneven performance across concepts.
-
Deferred-compensation market exposure
A hypothetical 10% decline in deferred-compensation asset values would have reduced net income by $3.6 million as of September 29, 2026, up from $3.2 million as of December 30, 2025.
Management's outlook
The company maintained fiscal-2026 development guidance of as many as 26 new restaurants: up to 5 Cheesecake Factory, 8 North Italia, 7 Flower Child and 6 FRC locations. No quantitative revenue or EPS guidance was provided.
Earlier filings 4
10-Q · May 4, 2026
The Cheesecake Factory reported a solid Q1 2026 with revenues of $978.8 million, surpassing estimates and reflecting a 5.6% year-over-year growth. Earnings per share (EPS) also beat expectations at $1.05 compared to the…
10-K · February 23, 2026
The Cheesecake Factory (CAKE) presents a large, multi-brand casual dining platform with 368 restaurants (216 The Cheesecake Factory, 48 North Italia, 43 Flower Child, 55 Other FRC) and 35 international licensed units.…
10-Q · November 4, 2024
The Cheesecake Factory reported Q3 revenues of $865,471,000 (13 weeks ended October 1, 2024), up $35,261,000 (+4.2%) versus the year‑ago quarter, with operating income of $33,700,000 and diluted EPS of $0.61. Gross…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.