Cheesecake Factory shares jump as coronavirus measures take shape
The newly reopened stores have recaptured 75% of sales
Shares of restaurant chain Cheesecake Factory jumped nearly 20 percent Wednesday as the company implements new measures to bounce back from the coronavirus shutdown.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CAKE | CHEESECAKE FACTORY INC. | 49.74 | +0.89 | +1.82% |
The chain began to slowly reopen a portion of its dining rooms in early May, and it announced in a statement this week that about a quarter of its restaurants across its concepts, including 34 Cheesecake Factory restaurants, have restarted dining-in eating with strict safety measures.
It plans to reopen 65 percent of its dining rooms across its concepts by mid-June.
“Our flexible seating layouts will uniquely enable us to ensure ample levels of social distancing while maintaining sufficient seating capacity to generate what we believe could be meaningful sales volumes,” the company during its quarterly conference call Tuesday.
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The newly reopened stores, so far, have recaptured about 75 percent of prior-year sales levels on average, according to preliminary results for the first quarter of fiscal 2020.
As of May 31, Cheesecake Factory restaurants’ comparable sales were down approximately 63 percent for the second quarter, which was in part due to the full or partial closures of 87 restaurants nationwide after protests unsettled the country and several businesses.
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The Cheesecake Factory’s uptick in traffic comes as the COVID-19 pandemic hurts the restaurant industry as a whole. Total major restaurant chain transactions declined by 18 percent in the week compared to the same week year ago, NPD Group data show.
Major full-service chain restaurant transactions dipped 42 percent versus a year ago, and transactions at quick-service restaurant chains were down 17 percent in the week ending May 24.
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“Among the most interesting behaviors we’re seeing is the rapid escalation of using technology to engage with restaurants,” David Portalatin, NPD food industry adviser and author of Eating Patterns in America, said in a report. “Going forward, we might expect a digital divide that sets apart restaurants with well-executed digital offerings and requires those without to turn to the newfound prowess of third-party platforms.”
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