Cheesecake Factory adjusting in bid to reheat shares.

CHEESECAKE Factory Inc. might pile its plates high, but its stock has been falling down.

Last week, the perennial Wall Street darling experienced a 52-week low, with its shares hitting $25.21 on Wednesday. The basement price capped a three-month period that saw Cheesecake Factory shares dive 30 percent.

Investors reacted to an announcement by the Calabasas Hills-based restaurant company projecting that second-quarter same-store sales would be flat to slightly negative. For the first quarter, same-store sales dipped 1.3 percent, marking only the second time in around 13 years that Cheesecake Factory notched negative comps.

What's ailing the company that for so long has been the envy of the restaurant sector for serving up impressive results quarter after quarter? Perhaps it is sector itself. In its same-store sales announcement, the Cheesecake Factory mentioned "macro trends impacting the restaurant industry" contributed to its subpar outlook.

The feeling is that, with energy costs mounting, consumers are holding onto their wallets, hesitant to shell out for unnecessary pleasures, including outings to their favorite eating destinations. In this trying economic environment, investors jittery about restaurant companies have slammed their stock. Shares of Darden Restaurants Inc., Brinker International Inc. and Ruby Tuesday Inc. all slipped early last week.

But Eric Wold, an analyst with Merriman Curhan Ford & Co., cautioned that Cheesecake Factory's problems might be deeper than lofty prices at the gas pump. Tired of long waits at Cheesecake restaurants, he said it's conceivable that patrons are simply starting to dine elsewhere.

"You are getting a situation where a little bit of the luster of this concept is wearing off," said Wold, who has a "neutral" rating on the stock. "A bunch of other restaurant choices that are coming up are just as good Cheesecake."

Analysts have also been disappointed by Cheesecake Factory's expansion strategy. That expansion has been driven by its namesake Cheesecake restaurants, which now total 107. The company has slowly built up a second concept, Grand Lux, to seven units as of the end of April, and has ruminated about adding Asian eateries, but has yet to break ground on a single unit.

"My concern is that the growth rate in the number of restaurants you open every Year is going to continue to slow," said Wold. And he added that Grand Lux, which has mostly gone into markets where Cheesecake has a strong presence, could be drawing customers who are already frequenting Cheesecake as much as it is attracting new clientele.

The Cheesecake Factory has opened about 20 restaurants per year and has said it can operate as many as 200 Cheesecake and 150 Grand Lux units in the U.S. Beyond that, what's going to push Cheesecake's expansion? Wold said Cheesecake could realize growth from another concept, maybe one with a smaller footprint, which could be placed in secondary markets that can't typically support the behemoth Cheesecake Factory eateries.

Staff reporter Rachel Brown can be reached at [e-mail] or at [phone], ext. 224.