What Happened?
Shares of restaurant company Cheesecake Factory (NASDAQ: CAKE) fell 3.4% in the afternoon session after investment firm William Blair lowered its full-year earnings forecast. The investment firm William Blair revised its earnings per share (EPS) estimate down to $3.68 for fiscal year 2025, a slight reduction from its previous forecast of $3.69. This new projection also fell just below the consensus analyst expectation of $3.71 per share. The downward revision, though minor, signaled potential concerns about the restaurant operator's future profitability. Compounding the negative sentiment were jitters ahead of the company's second-quarter earnings announcement, scheduled for late July. Analysts had already indicated expectations for a year-over-year decline in earnings for the quarter, which likely contributed to investor caution.
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What Is The Market Telling Us
The Cheesecake Factory’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 14.5% on the news that the company reported third-quarter results that blew past analysts' EBITDA expectations. Management highlighted market share gains as the business continued to expand its footprint. Its EPS also outperformed Wall Street's estimates, showing that some of the improvements are reflected in the bottom line. Overall, we think this was a strong quarter.
The Cheesecake Factory is up 36.4% since the beginning of the year, and at $66.14 per share, it is trading close to its 52-week high of $68.51 from July 2025. Investors who bought $1,000 worth of The Cheesecake Factory’s shares 5 years ago would now be looking at an investment worth $2,666.
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