Cheesecake Factory (Nasdaq:CAKE) is about to serve a slice of earnings. Ponder this Bear Case Scenario as you listen to management comments.
Very difficult to build sustainable long-term earnings. Idea’s are copied quickly. New ideas come up just as quickly. It’s a very difficult category. Almost insane.
The fast casual category is expanding and taking share away from traditional casual and upscale casual diners such as Cheesecake Factory.
Persistent unemployment or economic worries creates strong headwinds. Restaurants have taken to discounting which kills margins.
Food is a difficult commodity to handle. Prices move against you just when it starts to get good.
George Gutowski writes from a caveat emptor perspective.