The Cheesecake Factory dims sales outlook as economy stalls

Same-store sales rose 1% in the first quarter. | Photo: Shutterstock

The Cheesecake Factory dimmed its sales expectations for the year amid sluggish economic growth and uncertainty around tariffs.

The casual-dining chain on Wednesday said it now expects to generate $3.76 billion in fiscal 2025, which was at the midpoint of its previous estimates. That implies same-store sales growth of flat to 1% for the year, down from 1% to 2%.

The change came in response to recent forecasts of GDP and disposable income, which were revised downward by about 1%, executives said.

“The business remains very stable, very predictable,” Cheesecake CFO Matt Clark said during an earnings call Wednesday. “But the environment doesn’t feel as robust as maybe three months ago.”

That echoed reports from other chains such as McDonald’s and Chipotle that noted consumer weakness due to inflation and uncertainty around the Trump administration’s tariff policy.

In addition to spooking consumers, tariffs on China, Mexico and Canada also stand to impact restaurants that get supplies from those countries. For The Cheesecake Factory, the biggest impact will be on things like utensils and to-go packaging, Clark said. Most of Cheesecake’s food comes from the U.S.

And the chain feels it has options to manage the cost increases. It could raise prices slightly (50 to 75 basis points), negotiate with vendors or explore different supplier options, Clark said. It’s continuing to monitor the situation but is not changing its profit outlook for now. 

“We’re not going to change our margin outlook, regardless of [tariffs] or the sales piece,” he said. He noted that Cheescake’s labor and other costs have been favorable, which could also help offset some of the increase.

In the first quarter, same-store sales at the 215-unit chain rose 1% year over year. Customers have responded well to its recently revamped menu and a new loyalty program, Cheesecake Rewards.

Same-store sales at Cheesecake-owned North Italia, meanwhile, declined 1% in the period. The 45-unit chain was more acutely affected by the Los Angeles wildfires in January.

The Calabasas, California-based Cheesecake Factory expects to open up to 25 new restaurants this year, including as many as three to four The Cheesecake Factory restaurants, six to seven North Italia locations, six to seven Flower Child locations, and as many as eight to nine other restaurants from the Fox Restaurant Concepts family. 

It will also close a Cheesecake Factory restaurant in Seattle this month. 

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