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CKE reports Q1 results decline
June 24, 2009
CARPINTERIA, Calif.—CKE Restaurants Inc. has announced financial results for its first quarter ended May 18.
Blended same-store sales for the quarter were down 1.8 percent compared to an increase of 1.8 percent in the same period last year.Revenue for the quarter was down 4.2 percent at $446.8 million compared to $466.2 million in the same period last year.
Net income was down 13.3 percent at $14.4 million compared to $16.6 million in the same period last year.
"It has never been my goal to get excited over reporting flat earnings or margins," said Andrew F. Puzder, chief executive officer. "However, holding operating income and company-operated restaurant-level margin steady in this economy, and doing so while facing the heavy discounting taking place in the fast food and casual dining sectors, as well as increased depreciation expense due to our remodeling programs at both brands, is a testament to our management team and the strength of our brands."
The company's initiatives include an increased focus on the value of the chains' premium products relative to casual dining, a focus on the chain's value items and a test of Hardee's breakfast menu at Carl's Jr. The company also is looking to more affordable menu options, including a snack menu and a reduced combo up-charge for its value items. Carl's Jr. also is focusing efforts on diversifying growth outside of California.
"The most important take-away is to understand we are managing our company for long-term growth and strength while making every effort to grow both short- and long-term sales in ways that complement or improve our brand positioning," Puzder said. "While we may continue to face difficult same-store sales comparisons — especially in the second quarter where we have very strong prior year same-store sales results — we are designing strategies that aim to deliver long-term shareholder value, while keeping the enterprise value of our brands intact."
Period five revenue trends
For period five, consolidated revenue from company-operated restaurants were reported at $85.2 million as compared to $88.6 million for the same period last year, driven by the refranchising of Hardee's restaurants during the prior fiscal year as well as the same-store sales decline.
The company will report period six same-store sales results on or about July 22. As of the end of its fiscal first quarter on May 18, CKE Restaurants Inc., through its subsidiaries, had a total of 3,133 franchised or company-operated restaurants in 42 states and in 14 countries, including 1,205 Carl's Jr. restaurants and 1,915 Hardee's restaurants.
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