The Cheesecake Factory (CAKE)

Pretax margin

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before tax but after interest (EBT) (ttm)	US$ in thousands	100,014	77,098	56,575	38,078	32,892	49,627	82,730	92,330	71,620	31,754	-35,622	-158,310	-356,036	-259,066	-204,648	-79,942	140,334	99,281	117,881	117,276
Revenue (ttm)	US$ in thousands	2,573,389	2,589,182	2,542,973	2,509,446	3,303,156	3,187,047	3,157,520	3,093,833	2,927,540	2,705,399	2,468,641	1,995,536	1,983,225	2,122,703	2,191,523	2,498,317	2,482,692	2,373,817	2,362,441	2,347,115
Pretax margin		3.89%	2.98%	2.22%	1.52%	1.00%	1.56%	2.62%	2.98%	2.45%	1.17%	-1.44%	-7.93%	-17.95%	-12.20%	-9.34%	-3.20%	5.65%	4.18%	4.99%	5.00%

December 31, 2023 calculation

Pretax margin = EBT (ttm) ÷ Revenue (ttm)
= $100,014K ÷ $2,573,389K
= 3.89%

The pretax margin of The Cheesecake Factory has shown variability over the past few quarters. The pretax margin is the ratio of pretax income to total revenue, indicating the company's efficiency in generating profits before taxes.

From Dec 2019 to Mar 2020, the pretax margin ranged from 5.65% to -3.20%, showing some inconsistency in profitability. However, the company experienced a significant decline in profitability in the following quarters, with pretax margins dropping to as low as -17.95% in Dec 2020 and -12.20% in Mar 2021. These negative figures suggest that the company was facing challenges in managing costs and generating profits.

There was a notable improvement in pretax margin in the later quarters of 2021 and into 2022, reaching a peak of 3.89% in Dec 2023. This upward trend indicates that The Cheesecake Factory may have implemented strategies to enhance profitability and control expenses effectively.

Overall, the fluctuating pretax margin of The Cheesecake Factory reflects the company's efforts to navigate through operational challenges and strive for sustainable profitability in a competitive industry. Monitoring this metric going forward will be crucial to assess the company's financial performance and management effectiveness.