CPKI California Pizza Kitchen, Inc. (MM)

California Pizza Kitchen Inc. (CPKI) recently opened its first restaurant in Metepec, Mexico in collaboration with Grupo Calpik, S.A.P.I. de C.V. This was the company’s twelfth opening in that country.

The new restaurant is located in Galerias Metepec, the main shopping mall for Toluca and Metepec residents that houses more than 130 retail stores. The newly opened restaurant covers approximately 4,650 square feet and is capable of accommodating around 224 guests. It is located on the first floor of the shopping centre and is expected to benefit immensely from its strategic positioning.

The menu will feature everything from the Original BBQ Chicken Pizza and Waldorf Chicken Salad to the Kung Pao Spaghetti and Avocado Egg Rolls. The new restaurant will also offer an extensive beverage menu including Margarita and other signature favorites such as Original Recipe Mojitos.

The other eleven restaurants of the company in Mexico are located in Guadalajara, Cancun, Lomas Verdes, Bosques de Las Lomas, Polanco District, Santa Fe, Coyoacan and Satelite.

Los Angeles-based California Pizza Kitchen, one of the leading casual dining restaurant chains operating 207 company-owned and 60 franchised units, expects to open two international full-service franchised restaurants in second-quarter 2011.  This year the company plans to open ten international franchise restaurants of which three were opened in the first quarter.

We believe new restaurant openings are indicative of the company’s efforts to gain market share in the gradually recovering restaurant industry.

Most of the company’s peers such as BJ’s Restaurants Inc. (BJRI), Red Robin Gourmet Burgers Inc. (RRGB) and Buffalo Wild Wings Inc. (BWLD) have been in a modest expansion mode in fiscal 2011. We believe, going forward, this will intensify competition for California Pizza Kitchen.

California Pizza Kitchen currently retains a Zacks #3 Rank, implying a short-term Hold rating. We also reiterate our long-term Neutral recommendation.

 
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