Cheesecake Factory's menu has always been a topic of conversation… its extensive offerings feel almost like a novel. But whatever their strategy, it seems to be working. My wife's favorite spot just delivered earnings that are as rich as their signature cheesecake.

Fun fact: The Cheesecake Factory's revenue has risen 69 times (nice) in the last 32 years. But answer this question real quick… Have you ever walked into a Cheesecake Factory and been seated immediately? Yeah, me neither. But if that day ever comes, I’ll be as shocked as I was reading their latest Q4 earnings… because the numbers came in way above expectations. Revenue hit $921 million (up from $877M last year), net income ballooned to $41 million (from just $12.7M in 2022), and their 2024 revenue totaled $3.6 billion. Basically, they’re printing money at the same rate they print new menu pages.

David Overton has been running this show longer than most crypto investors have been alive. He started in his parents’ bakery 50 years ago and now leads a chain where people will gladly wait two hours for an oversized portion of chicken Madeira. He credits their success to "distinct, high-quality dining experiences."

While Cheesecake Factory owns some trendy concepts like Flower Child and North Italia, the original brand still pays the bills, bringing in 75% of total revenue. And Wall Street loves it… CAKE shares are up 45% in the last six months, trouncing the broader restaurant sector’s 24% gain.

The company has $340.7 million in liquidity, meaning they’ve got plenty of cash to keep expanding while still paying a dividend. They’re planning to open 15-25 new locations in 2025, undeterred by rising interest rates making real estate development more expensive.

If this all sounds familiar, it’s because Texas Roadhouse has pulled off a similar playbook. They started with a single location in 1993 and have since exploded to 600+ restaurants with $4 billion in annual revenue. Both brands have built a cult following by going all-in on oversized portions and die-hard customer loyalty (somewhere, a Roadhouse fan is shouting about the free bread).

Fast-casual chains may be struggling, but Cheesecake Factory and Texas Roadhouse are proving that full-service restaurants still have plenty of room to grow.

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Stocks.News has positions in Cheesecake Factory and Texas Roadhouse mentioned in article.