Better-Than-Expected Quarter for Cheesecake

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Cheesecake Factory Inc. turned to a profit in the fourth quarter, helped by cutting costs and a small increase in sales.

After the markets closed Thursday, the Los Angeles casual dining chain reported net income of $21.8 million (36 cents per share), compared with a loss of $13,000 (0 cents) a year earlier. The 2009 quarter included a $26.5 million charge for impairment of assets.

Revenue rose 4 percent to nearly $417 million. Comparable restaurant sales rose 1 percent at Cheesecake Factory locations and fell 0.4 percent at Grand Lux Cafés, with the company saying bad weather and the timing of holidays hurt sales.

Chief Executive David Overton noted that the most recent quarter was the eighth consecutive of improving comparable sales as more guests visited the chain.

“We made significant progress toward our goal of returning operating margins to peak levels,” Overton said in a statement. “By leveraging our comparable sales growth, as well as realizing and retaining savings from our cost management initiatives, we delivered our best operating margins in three years.”

Analysts surveyed by Thomson Reuters expected the company to report per-share profit of 35 cents on revenue of $418 million.

The company opened one Cheesecake Factory restaurant in Houston in the current quarter and expects to open six to nine restaurants this year. It currently operates 164 full-service restaurants, including 150 Cheesecakes.

Shares were down $1.34, or 4.4 percent, to $29.03 in midday trading on the Nasdaq.

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