What to expect from The Cheesecake Factory’s (CAKE) Q3 earnings

Restaurant company Cheesecake Factory (NASDAQ:CAKE) will be announcing earnings results this Tuesday after the bell. Here’s what investors should know.

The Cheesecake Factory beat analysts’ revenue expectations last quarter, reporting revenues of $1.03 billion, up 7.7% year on year. It was a stunning quarter for the company, with a solid beat of analysts’ same-store sales estimates and a beat of analysts’ EPS estimates.

Is The Cheesecake Factory a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, the market is expecting The Cheesecake Factory’s revenue to grow 10.7% year on year, improving from the 4.8% increase it recorded in the same quarter last year.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. The Cheesecake Factory has missed Wall Street’s revenue estimates multiple times over the last two years.

Looking at The Cheesecake Factory’s peers in the restaurants segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Darden delivered year-on-year revenue growth of 5.1%, meeting analysts’ expectations, and Domino's reported revenues up 3.4%, topping estimates by 0.9%. Darden traded down 6.5% following the results while Domino's was also down 4.8%.

Read our full analysis of Darden’s results here and Domino’s results here.

There has been positive sentiment among investors in the restaurants segment, with share prices up 4% on average over the last month. The Cheesecake Factory is up 2.1% during the same time and is heading into earnings with an average analyst price target of $105.73 (compared to the current share price of $107.36).

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