CKE Restaurants Inc., parent company of Carl's Jr. and Hardee's, reported positive same-store sales for its fiscal year and fourth quarter 2012.
Blended same-store sales increased 3.6 percent in the fourth quarter. Hardee's same-store sales increased 6.1 percent, while Carl's Jr. same-store sales were up 1.7 percent.
Fiscal 2012 blended same-store sales increased 3.5 percent. Hardee's same-store sales increased 5.2 percent and Carl's Jr. same-store sales increased 1.9 percent.
"Both brands continued to generate positive same-store sales results during the fourth quarter. Hardee's has now had seven consecutive quarters of positive same-store sales. Carl's Jr. also performed well, posting its fourth consecutive quarter of positive same-store sales," said Andrew F. Puzder, CEO.
During this morning's earnings call, Puzder said the difference in sales for the two brands came mostly from geographical positioning. Carl's Jr.'s biggest footprint is in California, a state that continues to struggle economically, he said.
Both brands are up from fiscal year 2011, when Carl's Jr. had negative 4.8 percent in sales, and Hardee's was at 4.4 percent.
To date, the company's blended same-store sales for the first quarter of fiscal 2013 are positive in the low single digits.
"While the macro environment remains challenging, I believe our performance demonstrates that our brands are very well positioned in the marketplace," Puzder said.
Boosting the brands during the fiscal year was the introduction of the charbroiled turkey burgers, extended line of chicken products and steakhouse burger. Puzder said that by introducing these items simultaneously at both brands, CKE was able to purchase a more efficient media package that provided a marketing base in both undersaturated and new markets, and also established demand in future expansion markets.
Additionally, Carl's Jr. benefitted from the continued rollout of Hardee's made-from-scratch biscuits, which are now available in Los Angeles and Bakersfield, Calif., Spokane, Wash., Tucson, Ariz., and all of Utah, Oklahoma and Texas.
CKE also continued to expand its franchise base in 2012, with franchisees opening 113 new restaurants, 41 of which were in the U.S., and 72 international locations. Seven new countries were added to CKE's portfolio. The company's international system now accounts for 13 percent of its total footprint, up from 11 percent last year.
Total revenue, excluding the estimated impact of the additional week in the prior year quarter, increased by $12.1 million, or 4.4 percent. The company reported total revenue of $287.4 million for the fiscal 2012 fourth quarter, a decrease of $9.9 million, or 3.3 percent, compared to the fiscal 2011 fourth quarter, attributable to the impact of an additional week in the prior year quarter, which was partially offset by increases in same-store sales and system-wide restaurant counts.
The company estimates the additional week in the fiscal 2011 fourth quarter added approximately $22 million to revenue.
For the fiscal 2012 fourth quarter, company-operated restaurant-level adjusted EBITDA margin, excluding a $2.0 million out-of-period insurance reserve adjustment relating to periods prior to fiscal 2010, was 16.9 percent, a 30 basis point decrease compared to the prior year quarter. Food and packaging costs increased 110 basis points, primarily as a result of higher commodity costs for beef, pork and potatoes.
Fourth quarter adjusted EBITDA, excluding the estimated impact of the additional week in the prior year quarter, increased by $0.6 million over the prior year fourth quarter. Adjusted EBITDA was $35.7 million in the fourth quarter of fiscal 2012 compared to $37.1 million in the same quarter of the prior year.
Finally, capital expenditures for fiscal 2012 were $52.4 million, of which $25.4 million related to new store openings, dual-branding and remodeling projects. Capital expenditures for fiscal 2011 were $63.1 million. For fiscal 2013, the company expects capital expenditures to be between $60.0 million and $70.0 million.
Read more about operations management.