Be careful about Cheesecake

Red flags should be posted at Calabasas Hills-based Cheesecake Factory - at least according to Jeremy Perler of the Center for Financial Research and Analysis. Perler isn't focused on questions about stock options or the recent departure of the company's president and COO. He's looking at the way Cheesecake measures its sales. As with almost all retailers, it's based on stores that have been open for more than 12-18 months - or same-store sales. New stores are almost always factored out because they usually take some time to get up and running. But Perler feels that could be a misleading approach, so he's published a study in which sales trends at new stores are compared with sales trends at existing stores. Using this yardstick, all-store sales growth at Cheesecake Factory has been slowing faster than same-store sales in the past two quarters. Meanwhile, there continue to be rumors about Cheesecake Factory going private, though there hasn't been much to support the rumbles (the stock has been trading in the $26-$28 range for a couple of months). Perler's analysis was described by Michael Brush in RealMoney.com.