The Cheesecake Factory Incorporated (CAKE)

The Cheesecake Factory is an upscale casual dining operator that generated $3.8 billion in revenue in 2025. The firm’s sales are mainly derived from its namesake banner (71.6% of revenue), known for its sprawling made-from-scratch menu, including cheesecakes. The firm also operates a bundle of Fox Restaurant Concepts (9.5%), including The Henry and Culinary Dropout, North Italia restaurants (9.2%), and its other segment (9.7%), which encompasses fast-casual, better-for-you Flower Child restaurants, cheesecake sales from its factories, and royalties from 35 international licensed restaurants.

Treasury yields have trended higher and lower for decades. If we ignore the rate plunge during the pandemic, one could make the argument that yields have been in an uptrend since the start of 2020. There was a peak of 15.8% in 1981 and a bottom of 1.3%-1.4% in 2012, 2016, and early 2020. So that bull market lasted 30 to 40 years. The prior bear market ran from the early 1940s until 1981. The 10-year yield has completed a bullish flag on the monthly chart. A move over 5% would open multiple potential scenarios. When it comes to equities, yields rule and take on more significance because of the massive and growing fiscal deficit and the huge borrowing for AI.

The 2Q reporting season is in full swing. Many companies have knocked it out of the park, delivering earnings and revenue numbers that were well over expectations. Meanwhile, we have been looking at the early trends and, as usual, there are companies increasing guidance. Raising guidance is one of our Investing Themes for the second half of 2026. We view management's ability to raise guidance consistently as a catalyst for possible market-beating returns in the quarters ahead. It's even harder for companies to lift guidance during uncertain economic times, as vision is murky. This is especially true now, as the war in the Middle East drags on. Wall Street is also pondering a new Federal Reserve chairman, one with a different view about forward-looking guidance (or in this case, a lack thereof). A good number of companies already have increased guidance in this earnings cycle, so we are putting out a first round of companies that are in Argus' Fundamental Universe of Coverage and that made the grade.

Based in Calabasas Hills, California, The Cheesecake Factory operates a chain of casual dining restaurants under The Cheesecake Factory, North Italia, and Flower Child, and a collection of FRC brands for a total of about 360 restaurants. It also has 36 The Cheesecake Factory restaurants that operate internationally under licensing agreements. In addition to restaurants, CAKE operates two bakeries that produce cheesecakes and other baked products for the company's restaurants and other foodservice operators, retailers, and distributors. The company has 48,000 employees.