News
Carl's Jr. continues to be hit by high unemployment in Calif.
October 13, 2009
CKE Restaurants Inc. has announced that Carl's Jr. continues to be impacted by high unemployment in California, where most of the chain's company-owned stores are located, during period nine ended Oct. 5. Hardee's comps were also negative but showed improvement over the last several periods.
Blended comps at company-operated stores were down 3.3 percent for the period. Last year, blended comps were up 1.2 percent. Year to date, blended comps are down 3.1 percent, compared to positive 2.2 in the prior year.
At Carl's Jr., comps at company-owned stores were down 5.5 percent, compared to postive 1.6 percent in the same period last year. Year to date, comps were down 5.3 percent over last year's 3.2 percent increase.
Hardee's comps at company-owned stores were down only 0.6 percent, compared to an increase of 0.8 percent in the same period last year. Year to date, comps are down 0.1 percent, compared to an increase of 1 percent in the prior year.
Blended revenue trends for period nine were down 2.5 percent at $82.3 million, compared to $ $84.4 million in the same period last year. Year to date, revenues are down 3.6 percent at $766.6 million, compared to $795.3 million last year.
At Carl's Jr., revenues were down 2.4 percent at $45.3 million, compared to $46.4 million in the same period last year. Year to date, revenues were down 1.8 percent at $427.9 million, compared to $435.8 million last year.
At Hardee's, revenues were down 2.6 percent at $37, compared to $38 million in the same period last year. Year to date, revenues were down 5.8 percent at $338.7 million, compared to $359.5 million last year.
"While Hardee's continues to show improvement in company-owned same-store sales, the further weakening of California's economy continued to impact Carl's Jr.," said Andrew F. Puzder, CKE Restaurants CEO. "In particular, record levels of California's unemployment exceeding 12 percent and 18 percent for the broader unofficial statistic, have negatively influenced consumers' buying habits. No doubt, this situation is also driving the increase in aggressive 99-cent discount promotions by our competitors."
Puzder said sales of The Big Carl and The Big Hardee, promoted at each chain as a better-quality, lower-priced version of McDonald's Big Mac, have been strong. However, those sales are not enough "to offset the loss of ala carte side dishes, drinks and combo sales."
"We are still not happy with the results at Carl's Jr," he said. "The best way to position ourselves for an economic recovery is to maintain our brand image and integrity. To do that, we will remain focused on our big, premium burgers while limiting our discounting, both of which have the added benefit of protecting profit margins."
The company will report period 10 same-store sales results on or around Nov. 11.
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