Cheesecake Factory Debuts in Latin America - Analyst Blog
March 28 2013 - 12:00PM
Zacks
California-based The Cheesecake Factory Inc.
(CAKE) is on the verge of launching new restaurants in Latin
America. In this regard, Cheesecake Factory has penned a licensing
agreement with Alsea, S.A.B. de C.V. Cheesecake Factory has chosen
the emerging markets of Latin America to tap its increasing growth
potential.
Under the terms of the agreement, Cheesecake Factory will
develop nearly 12 new restaurants across Mexico and Chile over the
next eight years. Cheesecake Factory will mark its first appearance
in Latin America with the opening of a new outlet in Mexico City in
2014.
In addition, the contract also includes expansion plans in other
Latin American countries including Argentina, Brazil, Colombia and
Peru. These openings are expected to give a boost to the company’s
earnings and revenue growth, going forward.
Cheesecake Factory is continuously trying to expand its presence
in the international market. Earlier, Cheesecake Factory made its
international debut with the opening of its first restaurant in
Dubai in August 2012 and it has also opened another restaurant in
The Avenues Mall in Kuwait. By 2016, the company is expected to
launch 22 new Cheesecake Factory outlets in five countries of the
Middle East.
During the fourth quarter of 2012, Cheesecake Factory reported
net earnings of 51 cents a share, down 3.8% year over year due to
sluggish sales. Cheesecake Factory’s revenues fell 2.7% year over
year to $464.7 million. Hurricane Sandy played foul with the
quarterly sales. The company currently operates 177 restaurants,
including the units opened during the fourth quarter.
Cheesecake Factory currently carries a Zacks Rank #3 (Hold).
Some restaurant companies that are also worth a look at present are
Red Robin Gourmet Burgers Inc. (RRGB) carrying a
Zacks Rank #1 (Strong Buy) as well as Burger King Worldwide
Inc. (BKW) and Cracker Barrel Old Country Store,
Inc. (CBRL), both carrying a Zacks Rank #2 (Buy).
BURGER KING WWD (BKW): Free Stock Analysis Report
CHEESECAKE FACT (CAKE): Free Stock Analysis Report
CRACKER BARREL (CBRL): Free Stock Analysis Report
RED ROBIN GOURM (RRGB): Free Stock Analysis Report
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