Let Cheesecake Factory cool off before you take a bite,' Jim Cramer says

• CNBC's Jim Cramer reviewed the case for buying stock in Cheesecake Factory.
• While he praised the restaurant chain's business, he advised waiting until after the upcoming quarterly report to buy shares.
• “There's a lot to like about this story, but let's see how they did…last quarter,” he said. “As much as I want to say let them eat cake, maybe let this one cool off before you take a bite.”

CNBC's Jim Cramer on Wednesday reviewed the case for buying stock in Cheesecake Factory. While he praised the restaurant chain's business, he advised waiting until after the upcoming quarterly report to purchase shares.

“There's a lot to like about this story, but let's see how they did…last quarter,” he said. “As much as I want to say let them eat cake, maybe let this one cool off before you take a bite.”

Cheesecake Factory offers a great value proposition, Cramer said, a characteristic shared by current winners in the restaurant space. Its expansive menu — upwards of 200 items —offers a variety of price points, Cramer continued. He said the sheer number of dishes “covers all the bases” and caters to most consumers' tastes. The chain also regularly changes its menu to stay on top of trends, Cramer said, adding that some new dishes are “very vegetable heavy,” a positive for more health-conscious customers.

Cramer was impressed with the company's annualized unit volume of more than $12.5 million, which it shared during its most recent quarter in April. He suggested that figure is quite large compared Cheesecake Factory's peers. Cramer was encouraged that management indicated its employee retention rate is improving. He also pointed out that the company said it plans to open as many as 25 new restaurants this year, including its flagship as well as other brands North Italia and Flower Child.

Shares of Cheesecake Factory are currently up more than 31% year-to-date, and Cramer dubbed the stock “red hot.” Although the company beat the estimates last quarter, the stock slipped just after earnings. Cramer attributed that decline to management's commentary that the economic environment “doesn't feel as robust as maybe three months ago.”

The company is expected to post earnings later in July, and Cramer said Cheesecake Factory could see losses even if the results are positive.

“Even though management's been pretty conservative in their outlook throughout this rally, I don't know if it would be prudent for me to tell you to buy Cheesecake Factory ahead of the quarter, given that the stock's rallied 30% since those comments about a deteriorating environment, and it's done so on very little news,” Cramer said.

Cheesecake Factory did not immediately respond to request for comment.

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