As previously reported, Northcoast analyst Jim Sanderson downgraded Cheesecake Factory to Neutral from Buy with no price target, citing valuation after shares reached the firm's prior price target. While the firm believes that the company is driving traffic momentum in the quarter that will elevate same-store sales beyond the 1%-2% management expects and argues that strong sales should unlock flow-through profits, it believes it will be harder to expand store margins as the year progresses given the modest menu price increases expected. This could limit store margin expansion through next year, the analyst tells investors.
